The High Price of Keeping Up Appearances

The not-entirely-surprising news that leaders of a certain bankrupt big-name law firm have been indicted (Matthew Goldstein, Former Top Leaders of Dewey & LeBoeuf Are Indicted, New York Times DealB%k, Mar. 6, 2014) is a cogent reminder that law firms in trouble don’t exactly confess to it. They may indeed go to unfathomable lengths to maintain an air of business-as-usual even as that very business is going down the drain. Really, who wouldn’t have doubts about a firm that couldn’t even manage itself?

Be aware that a troubled employer probably won’t disclose its real status. How many of us have heard about firms that still send recruiters to law schools even though they know no offers will be made? Is a firm having difficulty paying its legal research database bills? Have its copiers just been repossessed? Has the firm abruptly stopped providing certain benefits? Note the details. Talk to people.

Need to learn more about an enterprise?  Try chatting someone up in the restroom.

Prospective new hires need to remember to undertake as much due diligence as they can before signing on to any firm. What can be learned about a firm’s fortunes? Pay attention to appearances. How run down is the place? What do the back rooms look like? How current is equipment?

Try to chat up as many prospective colleagues as you can. To this day, some of my own best reconnaissance has occurred in the lavatory. It can be amazing whom you might strike up a conversation with while you’re applying more lip gloss in the ladies room. It can be even more amazing what a stranger in the bathroom might actually tell you.

See also Lori Tripoli, Don’t Be the One Laid Off: Check your Employer’s Background First, ContemporaryLawOfficeManagement, June 24, 2013.

—Lori Tripoli

Don’t Be the One Laid Off: Check your Employer’s Background First

The news that New York’s Weil, Gotshal, & Manges is dumping 60 associates and 110 staffers was bad enough, but what stood out in a recent writeup about the firm’s very bleak Monday is that the firm’s partnership agreement only allows termination of partners for cause. Peter Lattman, Big Law Firm to Cut Lawyers and Some Partner Pay, New York Times DealB%k, June 24, 2013, http://dealbook.nytimes.com/2013/06/24/big-law-firm-to-cut-lawyers-and-some-partner-pay/. While some partners are seeing a big cut in their compensation, they surely have some cause for celebration in knowing that, unlike their lower-ranked coworkers, they simply can’t just be “let go.” Or “right-sized.” Or whatever, lacking any malfeasance on their part.

That’s not such good news for those associates and staffers who’ve gotten their pink slips. The event does, however, serve as a reminder that no matter what your rank in a law firm, you’ve simply got to do your due diligence before accepting a position with one, even in those tumultuous (bleak!) times. Wouldn’t you want to know that partners can’t be let go? That means that when the firm needs to cut some big-time expenses, it’ll be looking elsewhere (i.e., associate and staffing ranks) to do the trimming.

Of course, it’s unlikely that a firm will just whip out its partnership agreement during an interview with a prospective paralegal. So do some digging! Has the firm been involved in any lawsuits where firm financials and its partnership agreement may have been disclosed? What’s the news coverage been? When considering accepting a job offer, ask to speak to someone who holds the same position you do at the firm. Talk to another associate, or to another paralegal, or to a legal secretary and ask them some pertinent questions about costs.

Even if a firm with weak financials is the only offer on your plate, you can at least be prepared (always!) if you know its background. A layoff should never come as a surprise. Have your resume ready at all times. And if you’re looking for a new job right now, remember to do your background research on prospective employers before saying yes to any offer.

—Lori Tripoli

Because Law Firms on the Precipice Keep Hiring

This follow-up piece on how Howrey’s lawyers are doing following the firm’s demise a year ago is reminder for all prospective hires, from partner to paralegal, to do their own due diligence on any prospective employer.  First-year associates along with everyone else at Howrey lost their jobs when the firm dissolved. Make sure you’re not jumping onto a sinking ship by gathering information about a firm’s performance.

 An interviewer probably won’t answer direct questions about firm finances, so be more circumspect: Is the firm staffing because of recent departures, or because of growth? Does the firm pay for lawyers’ bar dues or for their continuing legal education classes? What professional development activities are provided for paralegals and other staff? How does this contrast to five years ago? What facility upgrades are in the works? Prospective hires should also scour legal publications before their scheduled interview. Has the firm recently lost big-name partners or major clients? Ask about the fallout from these events.  Work in a discussion of the current economy and inquire how the firm is weathering bad times. And hope that if a firm is on the brink of dissolution, someone will be candid enough with you to tell you, at least on the sly, to look elsewhere.