The End of White Collar Job Security
For the past half century, one of the surest paths to well-heeled financial security was becoming a corporate lawyer. Your class background didn't matter all that much, as long as you were smart enough to get into a top law school and could then endure the brutal hours of an associate at a corporate firm.
True, many associates didn't actually make partner at the very top firms, but just logging a few years at a place like Cravath, Swain, and Moore set you up to make partner elsewhere later on. One thing was certain: You wouldn't get suddenly fired as an associate.
That was then. Earlier this week, one of America's top law firms -- Weil, Gotshal, and Manges -- announced that it was firing 7 percent of its associates. Sixty young lawyers lost their jobs in one fell swoop, an unprecedented event in the corporate law world for a firm that wasn't otherwise dissolving.
We're not talking about just any young lawyers. We're talking about the best of the best -- the super smart high school kids who got into the top colleges and then the top law schools and then had their pick of prominent firms. Whoops, guess they chose the wrong one. Now many will be lining up for unemployment. (At least, after they've blown through their six months of severance. Six months! That shows you the extent to which the firm knew that the layoffs would seem like an asteroid strike.)
Weil has revenues of over $1 billion a year, and each of its nearly 200 partners took home an average of over $2 million in 2011. Money like that is why associates endure 80-hour weeks for years on end, barely seeing their spouses or children (if they have time to acquire either while climbing upward.)
Now, though, no amount of brute suffering by yesterday's valedictorians is enough to guarantee that spacious Victorian in Scarsdale, along with two summer weeks on the Blackberry in Nantucket. Get ready for more layoffs to come at white shoe law firms.
Why the coming slaughter? Because corporations have become obsessed with the bottom line and have finally realized that they don't need to be writing a blank check to the Weils and Cravaths of the world. As the Times writes:
big corporations, facing pressures of their own, have clamped down on legal expenses. They have beefed up their in-house legal staffs and perform much of the work themselves. They are demanding that for routine assignments like document discovery, work be sent to outsourcing firms and contract lawyers rather than given to expensive associates. And they ask for discounts or capped fees at places like Weil, which charge more than $1,000 an hour for some partners’ work.
All that seems overdue, doesn't it? But such basic economizing spells doom for the armies of twentysomethings making $145,000 a year. Among other things, new software allows computers to do some aspects of document discovery work that used to have associates burning the midnight oil for weeks while the meter clicked upward.
The other thing happening is that big law firms increasingly behave like the corporations they represent -- with a sharper eye on the bottom line. If a firm can cut back on associates, and outsource more work to legal temps or get it done by computers, this means more money for the partners. That said, Weil also announced that it would be reducing pay for partners. So the good times may not last forever even for those at the top of the food chain.
The larger point here is that economic insecurity keeps seeping into new areas of work. Nobody is safe anymore. And just maybe, as that truth sinks in for the privileged class, they'll become more enthusiastic about steps to strength America's badly frayed safety net.