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by Vault Law Editors | July 30, 2008

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Today, The Wall Street Journal broke the story of the “largest round of cuts hitting the legal community in this financial downturn”:  Cadwalader has axed 96 lawyers, mostly in the real estate finance and securitization groups.  (I’m guessing that “100” represented some psychological line that the firm just couldn’t bring itself to cross.)

 

Summer is re-run season, so here what we said about the firm’s (relatively small-scale) February purge. (Every word could have been written today, swapping the number "96" for "35.")

 

Sure, hindsight is 20/20, but this piece from The New York Law Journal, "Does the Future Belong to Cadwalader?"*  has not aged well.  (Then-managing partner Bob Link asks rhetorically, “'Are we going to have difficulty sustaining this?'  No, short of some cataclysmic event that hits everyone else too.”   Gulp.)

 

Cadwalader's new managing partner, Chris White, laid the blame for the firings on (what else?) the collapse of the mortgage-backed securities market: “So we grew right along with client demand. And now that market has contracted severely. That $314 billion from last year will go to roughly $60 billion in 2008—an 80% contraction.”

 

David Lat doesn't think that White can be said to have exactly  'manned up' with his remarks:

 

With his use of the passive -- "[t]here was a frothiness" -- and his "we grew right along with client demand" remark, White seems to be offering a "not our fault, everyone was doing it, nobody predicted this" sort of defense. But isn't it the job of firm management to make sure that a firm is well-diversified among practice areas and adequately protected against downside risk?**

 

                                                               -posted by brian

 *  no

** yes

 

UPDATE (8/5): According to The Lawyer, "Cadwalader partners next to face the chop"

                                                                                   

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