Monday, October 29, 2007

CMBS slowdown hitting law firms

As the conduit market ground to a halt in the last few months, some lawyers necessarily have much less work to do. Most people would be happy to slow down after so many years of go, go, go, but these days the law firm market is such that too long of a slowdown could mean...well...issues.

Above The Law has already reported that two firms known for their big structured finance practices are talking to their associates. Thacher Proffitt & Wood is allegedly telling its associates that there will be no layoffs and that partners will take a hit, if any, to avoid this. Although we've heard this before, I would actually not be surprised if this was really true here. I have done several deals with TPW, and they are good and stand-up folks. I think they also know they need a good team in place when everyone gets back on the CMBS bandwagon.

Another firm, McKee Nelson, appears to be asking associates to consider voluntary moves such as retraining in another department, secondment to a client, a sabbatical or even assistance with a career change. I do not know enough about McKee Nelson to make a comment, but again, the name partner is saying, "[N]o one is losing their job." Again, a good call for the future.

Today, Crain's reports that Sidley Austin's CMBS work has plunged by 70%. Once again, no layoffs are "expected...though some of its 250 capital markets-oriented lawyers could shift focus." We'll also see what happens here.

P.S. Let's not forget there is a lag in deal-making. The CMBS market is starting to pick up a little, though maybe not to crazy-busy levels, and that will bode better to firms who ride it out.