Wednesday, July 30, 2008

Cadwalader layoffs

Apparently another 96 lawyers are being let go at Cadwalader today, meaning the total loss count this year is, if I can count, in excess of 130 people.

CWT is well known as one the major, major players in the CMBS market. I've worked with all three of their US offices (NY, DC and Charlotte), usually on the same deal. For whatever reason, CWT had this thing about running deals from multiple offices when I was borrower's counsel.

While I found the CWT people professional and thorough almost to a fault, my clients were sometimes unhappy, especially when the lender's counsel's bill (which the borrower pays) came out. We used to try to predict the amount as a little game. At least one client, as I recall, was so irked that it resolved to ask their lenders in the future to find other, more cost-effective firms to run the deals. And in the climate that was a few years back the lenders usually complied, moving the legal work to other firms -- sometimes outside New York -- where the lawyering was still excellent but the overhead was much lower.

Now, that didn't hurt CWT at the time because they were so crazy busy that it hardly mattered. And they got more than their share of the very best deals, which is befitting a top firm of smart lawyers. But now that the capital markets practice is at a virtual standstill there's nothing for this army of lawyers to do. And CWT makes no bones about its desire to be aggressively profitable.

“It’s exactly the shark tank that everybody says it is,” said former partner Robert Vitale, “If you’re a shark, it’s great.”

Layoffs are painful, but, at a shop like this, probably inevitable. You know what you sign up for here. And almost 100 lawyers are about to be much less comfortable than they were yesterday.

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