Layoffs & Mergers Highlight A Bumpy Year Ahead

Episode Notes

Transcript

[Music]

Chris Williams: Hello.

Joe Patrice: We are back with another edition of Thinking Like a Lawyer.  I’m Joe Patrice from Above the Law.  You heard everyone else there to both Kathryn and Chris.  Hey everybody.

Kathryn Rubino: Hey, how are you?

Joe Patrice: Good. So we are once again the Above the Law weekly podcast where we kind of recap the big stories of the week that we are looking at over at ATL.  And with that, we — however, don’t jump right in as always.

Kathryn Rubino: We kind of slow play it for you all.

Joe Patrice: We don’t jump right into the stories because you know, you need to be eased in which is why we begin with a little small talk.

Kathryn Rubino: Small talk.

Joe Patrice: Okay. I feel like the small talk that you — the whisper needs to be an official sound too, but well, you do it every week.

Kathryn Rubino: I mean I just enjoy it. So it’s no hardship on my end.

Chris Williams: Is it me or is Joe giving little extra quiet storm today?

Joe Patrice: What?

Chris Williams: Quiet Storm? Never — It’s like —

Joe Patrice: I mean I know what — I don’t understand how it relates to what I’m doing. That’s —

Chris Williams: I feel like your voice is extra slowed and smoothed.

Joe Patrice: Oh, okay.

Chris Williams: Keep listening.

Kathryn Rubino: It’s almost like you should have a career in radio.

Joe Patrice: I feel like I’m doing kind of the same things. Anyway, whatever.

Chris Williams: Anyway, if you’ve been thinking about crevasse, we’ve got you covered. Is it crevasse or crevasse?

Kathryn Rubino: It’s definitely crevasse/

Joe Patrice: Crevasse, yeah.

Chris Williams: When you’re this smooth, you can call it what you want.

Joe Patrice: Well, you know, it’s okay.

Kathryn Rubino: Really can, but okay.

Joe Patrice: Yeah.  So anyway, I actually was on another radio show recently over the WGN, radio show about the legal world.  So that was exciting.  I channeled my —

Kathryn Rubino: We crew over there.

Joe Patrice: Yes. Yeah, I know, you’ve been on that show before. It was nice that — I felt very much like Harry Caray, I got to be on WGN which, you know, as somebody from who grew up with that being the channel you could get anywhere in the country.  It was kind of cool.

Chris Williams: Harry Caray.

Joe Patrice: Well, Harry Caray, who is no longer with us was obviously on WGN for years.

Kathryn Rubino: You say obviously, in a really weird time right there.

Joe Patrice: Well, yeah.

Chris Williams: Got you.  So the way my mind worked, I heard Harry Caray, which is a suicide method, and I was like, what?

Joe Patrice: Yeah.

Chris Williams: What were they doing when it’s a radio show.

Joe Patrice: This is once again we’re being remotely plugged into popular culture would help.

Kathryn Rubino: Okay, Joe. I mean, I’m usually on your side on this one, but I have to say this is also in your old moment.

Joe Patrice: I mean, this is a character who was the subject of (00:02:47) years after he died.

Kathryn Rubino: Still like the 70s, right?

Joe Patrice: No. Will Ferrell played him for God’s sake.

Chris Williams: You mean the guy from Elf?

Joe Patrice: Yes.

Kathryn Rubino: All I’m saying is Harry Caray jokes is the sort of thing my dad used to say.

Joe Patrice: Okay.

Kathryn Rubino: So how was your weekend everyone?

Joe Patrice: Good.

Chris Williams: It’s pretty good.

Kathryn Rubino: We’re in small talk mode, Joe.

Joe Patrice: We have been having small talk.  It does not —

Chris Williams: This was just you being old.

Joe Patrice: It does not — no — well, it was about another show that I had been on, the people could also check out.

Chris Williams: Hey, Kathryn in Joe’s defense this is the first time in a while he’s actually given life details during small talk.

Joe Patrice: Yeah.

Chris Williams: So, let’s cut him some slack here.

Joe Patrice: It does not have to always be once weekend.  It can be anything.  That’s where small talk comes in.

Chris Williams: True, but your version of small talk was, “Hmmm, okay.  Yeah. Well, let’s get to day’s stories.”

Kathryn Rubino: That’s often accurate. Chris, how was your weekend?

Chris Williams: It was good, it was good.  I got 98 Runecrafting for the nerds listening, and I did an attempt at (00:03:56) Nightmare, which is a good time.  Caught up on the show called My Hero Academia, which is — it’s animated show, and it made me realize that I don’t know what it is, but apparently I’m in touch with my emotions or some shit now.  Because there were like two times where it was like, kitschy and sentimental, and I was like, “Oh, this is kitschy and sentimental.  Who’s cutting onions in here?”  So that was refreshing to experience.

Joe Patrice: As everyone who reads my work knows My Hero Academia is Jonathan Turley.

Kathryn Rubino: Hero punching bag, whatever tomayto, tomahto.

Joe Patrice: Interesting.  All right.  Well, that certainly seems like we’ve had a lot of small talk and can move on with actual stories.  What do you want to talk about first?

Kathryn Rubino: I don’t even remember what the stories were.  So, I will let you take the lead.

Joe Patrice: I think the biggest story for us to talk about — well, let’s go by the biggest buy traffic from the last week, which is your story.  There’s — you know, it’s more about our favorite Supreme Court Justice spectacle challenge.

(00:05:07)

Kathryn Rubino: Yeah.  It’s a Ginni Thomas story quite obviously.  I think it was also one of my top stories of 2022, it was something about her as well.  As we talked about at the time is Ginni Thomas, because she was sort of the Forrest Gump of post-election denialism, got called in front of the January 6 committee, and it took some time before those transcripts were released.  It kind of happened in that period in between.  I think on the 30th, it was released between kind of Christmas and New Year’s.  So we wrote about her testimony, which had some very interesting tidbits in it.  We knew ahead of time, or right around the time that she had given the testimony, her opening statement was released, and in that she kind of made it very clear that she never discusses her political actions with her spouse that they’re sort of a — you know, a clear bright line in their home.  He never talks about his cases, she never talks about the work she does.  I think I said at the time, it’s like a dim view of marriage.  But when you actually got into the testimony, although she kept that line and kept on repeating those things, the reality seemed a little bit different.

Joe Patrice: Also, my take away when I looked at some of this transcript was that she takes the stance publicly, she does not discuss with her husband her political activities.  However, in the transcript, she makes reference to discussing with her friends —

Kathryn Rubino: Her best friend.

Joe Patrice: Discussing with her best friend what was going on, assuming, I guess, that trained prosecutors do not ask follow up questions.  They do, however, and asked who her best friend was, and who was that person?

Kathryn Rubino: It was Clarence, Clarence Thomas.  So her public stance that she does not discuss with her husband, what’s going on with her politically, is really just kind of a hat wearing issue.

Kathryn Rubino: Apparently.  I don’t know if it’s a hat wearing or if she’s trying to say — so this specific line from the text message, I believe it was that she was confronted with, was in a communication with Mark Meadows and she said that she needed the conversation with Mark this, plus a conversation with my best friend just now, I will try to keep holding on and asked who her best friend that you referred to there.  Who that was, was Clarence Thomas.  And it sounds like later in her testimony, she tried to say like, “Yes, he offers spousal support, but I don’t necessarily tell him all the details.  He doesn’t know who I’m emailing, who I’m texting, who I’m talking to, in a bit of a straining credulity kind of a way.”

Joe Patrice:  Yeah.

Chris Williams: I will say like, eminent decline of our civil society aside, isn’t that cute?  You know, it’s nice having your husband being your best friend.  Like, there are some — And also like — besides like, you know, death of democracy.  Can we — see this is the sentimentality coming in?  This is My Hero Academia’s fault.

Kathryn Rubino: But it is kind of interesting given the sort of stance she’s been forced to take publicly that she doesn’t discuss these details with Clarence Thomas, that she’s — you know, kind of created this church and state dynamic that you know, never the two shell overlap when — because it is, in fact, her best friend seems wildly untrue.  She quoted doesn’t remember any of the specifics of this particular conversation, nut there was something that Clarence Thomas said that allowed her to “keep holding on” to her belief that Donald Trump was the correct president and won the election of 2020.  But she doesn’t even remember what that conversation was what he said earlier, she, that’s what she testified.  But something that he said was enough to convince her to keep fighting the good fight, to keep denying the results of the election and we’re supposed to be okay with that as a democracy.

Joe Patrice: Right.  Well, and this, of course, then plays into — I mean, she says she doesn’t talk to him about what she’s doing, but you know, she’s having this conversation about hanging on.  And then ultimately, when there’s an opportunity for the Supreme Court to quash any inquiry into these messages that are going to Mark Meadows, it’s an 8-1, with one notable to center who seems as though probably had a little bit of skin in the game to keep those under wraps.

Kathryn Rubino: Or at the very least, even if he didn’t know that specifics, were sort of like give her the benefit of the doubt here.  He didn’t know the specifics.  He knew enough to be skeptical and be worried that his wife’s name was going to come up in these things, which obviously turned out to be true.

Joe Patrice: To be true.  Yes.  Yeah, no.  It’s an ongoing ethics problem.  Obviously, there are no being a Supreme Court justice means never having to say you’re sorry, there’s no real ethics there.  They’re all advisory at best.

Kathryn Rubino: And the other part of it is that further makes this more infuriating, at least to me is that yes, a lot of people are paying attention now finally, because it is so wild what’s going on and the details that have been unearthed because of the January 6 committee we know a lot more.

(00:10:08)

But this is not the first time that Ginny’s political activities have directly conflicted with Clarence Thomas’ role on the Supreme Court.  She was out there against — in support of Trump’s travel ban, an issue that came up before the Supreme Court.  She was out there trying to get the Affordable Care Act overturned, a thing that absolutely came before the Supreme Court and Clarence Thomas had a vote that went along with his wife’s political aspirations as well.

Joe Patrice: Right.

Kathryn Rubino: She works for think tanks that frequently go before the Supreme Court.  This is not new.  This happens a lot with Ginni Thomas and we’re finally talking about it in as much detail and anger as we should be.

Joe Patrice: Yeah, I mean — yeah, I don’t necessarily think it’s all that problematic that she has political stances that are on big ticket issues that come before the court.  It’s more that she makes money off of those big ticket issues, the big income before the court.  Like I think it’s an absurd take to think that the spouse of somebody who’s politically active as these folks are, you know.  Sometimes justices come from the Ivory Tower, they are literally Heroes of Academia.  But putting aside your Kagan’s of the world, a lot of these folks come from political backgrounds, obviously.  Kavanaugh was basically a political fixer.  Clarence was in the Reagan administration.  So that I don’t think is necessarily crazy that folks have those stances that said, “There’s a difference between having those stances and making money off those stances.”  And when you have, judges whose household income is contingent upon making money off of stances that are before the court, that’s a real problem, and one that the Supreme Court has no mechanism to deal with, because there’s no ethics rules, and one that the chief justice in the annual report on the judiciary had no comment on because he doesn’t care.

Last year, the year before, I mean this most recent report doesn’t deal with this, nor did the one last year.  The last one last year even raised the issue of how there’s an ethics problem and he openly said, that he found it offensive basically that anyone would think that they need a tighter ethics.  Clearly, that has not worked out.  But he has absolute contempt for us so.

Kathryn Rubino: And it’s even worse than what you just said, which paints a pretty dim view, right?  Because in disclosure documents, Clarence Thomas has “oopsie” forgotten to report almost $700,000 worth of income that Ginni has made as a result of that advocacy work.

Joe Patrice: Yeah.

Kathryn Rubino: That is wild.

Joe Patrice: Well, yeah. Because if you if disclose it, it starts looking like there’s a real problem.  So don’t disclose it.  And then, yeah, it’s real bad and there does need to be some intervention on this front, and if it’s not coming from — Unfortunately, Robert seems to be taking the stance that even he has no interest internally to the Article III imposing ethical standards on the Supreme Court and he’s taking the stance that if Congress and the — you know, through the normal lawmaking means tried to impose restrictions on the court that they would rule those as unconstitutional.  That’s a problem.  And probably one that a future legislature would need to start playing real hardball over, you know, jurisdiction stripping and stuff like that to get an answer.

Kathryn Rubino: And to kind of put a final bow before we move on.  Ginni did apologize, say she — Well, not apologize she says she regrets the tone and content of those text messages.  But, tellingly, she said, “I’m regretting that they became public.”  Not so much what she did as much as the fact that we all know about it.

Joe Patrice: You know, always the apology for being caught, a classic.

Kathryn Rubino: Classic.

Joe Patrice: All right, well, this is looking down, I see that we have a bunch of messages, but —

Kathryn Rubino: Oh, no, I’m busy right now, because I’m recording a podcast.  If only — if only —

Joe Patrice: Yes, if only when you were doing your legal work, you had someone else handling those and in taking those calls.

Kathryn Rubino: Right, so you can focus on the task that you’re trying to accomplish, not get distracted by telephone calls when you can have a Virtual receptionist take care of that mundane work.

Joe Patrice: So let’s hear from Posh about exactly that.

Female Speaker: As a lawyer, ever wish you could be in two places at once.  You could take a call when you’re in court, capture a lead during a meeting.  That’s where posh comes in.  We’re live virtual receptionists who answer and transfer your calls, so you never miss an opportunity.  And the Posh app lets you control when your receptionist steps in.  So if you can’t answer, Posh can.  And if you’ve got it posh is just a tap away.  With Posh, you can save as much as 40% off your current service providers rates.  Start your free trial today at posh.com

(00:15:04)

Joe Patrice: All right, so I guess —

Chris Williams: A quick question before we continue. Kathryn. do say Ginni Thomas is the Forrest Gump of election denial?

Kathryn Rubino: Ginni Thomas is the Forrest Gump.  You know how like in that movie.

Chris Williams: It’s fucking hilarious.

Joe Patrice: Yeah.

Kathryn Rubino: She’s everywhere, right?  She was emailing Arizona legislators, she was going back and forth with Mark Meadows, she was walking to John Eastman.  She was all over this shit.

Joe Patrice: Yeah.

Chris Williams: My immediate thought was her just down on the bed to saying like, “You know elections are like a box of chocolates.”

Kathryn Rubino: She knows exactly what we’re going to get.

Chris Williams: Yeah. Elections are like a box of chocolates, we read the label and we know what’s happening.

Joe Patrice: Oh, no elections are like a box of chocolates, you can’t put them in the mail.

Chris Williams: Smarter.

Joe Patrice: Yeah, you can’t put them in the mail and inevitably, the Italian Venezuelan actors are trying to ruin them for it, I don’t know.  The whole thing doesn’t really work out.  Hey!

Kathryn Rubino: Hey.

Joe Patrice: So while that story did the best traffic wise last week, arguably the biggest story of last week in the industry brings us to one of our favorite new sound effects.

Kathryn Rubino: Layoffs.  Don’t talk about layoffs.  Are you kidding me?  Layoffs?

Joe Patrice: That is the layoff bug has hit the Am Law 20 with number 17, Goodwin Proctor announcing a fairly significant reduction in force.  You know, it sounds like over 100 attorneys all in is going across offices.  It’s you know — we’ve seen some self-layoffs out there.  Obviously, Cooley was upfront about what they did.  Other folks had been more couching it as the associates fault.  You know, kudos to Goodwin, I guess.  You know, there’s never like a good way of saying, “Hey, good lay off,” but at least they seem to be taking the stance of being upfront about what happened, which is that they over hired over the last couple of years, have an excess of folks in some practice areas and needed to, in their minds, make cuts.  This is bad for all those folks who are losing their jobs, but at least when you handle your layoffs this way, the hope is that you’re signaling to the rest of the market who might hire these people in a lateral way that this is not a reflection on those attorneys.  They continue to be very good attorneys who know what they’re doing and would be an asset to other firms, just Goodwin couldn’t afford to keep them, which is much better than a stealth layoff where you pretend that the associate was behind on their billing, or not a good fit or something like that.  And so in some ways, this is at least being handled the best way possible.

Kathryn Rubino: Absolutely. And you know, we’ve talked about this before, but I can’t say enough how nice it is to hear firms like Cooley, like Goodwin taking the hit, maybe takes a hit to their reputation, et cetera, but they are a large, large, very wealthy law firm despite the cuts.  They’re the ones that can best afford to handle any sort of reputational hit as a result of announcing layoffs, unlike individuals who are at various stages of their careers who don’t have nearly as much leverage as massive law firms do, so kudos to them for, you know, taking it on the chin.

Joe Patrice: Yeah, you know, it’s rough to be hearing about layoffs and we heard about more layoffs today.

Kathryn Rubino: Yes, struck.  A fewer attorneys — significantly fewer than the Goodwin ones, I believe it was nine attorneys that were laid off, but a bunch of staff was laid off as well.

Joe Patrice: Yeah, so we’re hearing about these layoffs, which is obviously problematic.  It goes to this prevailing sense that recessionary pressures are going to hit, which is a weird one, because we just had the most recent round of — the most recent jobs numbers, which showed that–

Kathryn Rubino: Like all signs point to like, “We’re in the middle of a great economy,” and everyone’s like, “Oh, it’s definitely recession.  We’re looking for an economic downturn any minute now.”

Joe Patrice: Yeah, not only were jobs numbers good, unemployment has now reached a 50-year low, which there’s some — there’s always like to get economics nerd.  There is something he said —

Kathryn Rubino: Okay, Joe, you are among friends, you can get as nerdy as you need.

Joe Patrice: Fair.  There’s always an argument that when unemployment is very low, it’s causing wages to go up and that would, you know, cause inflation which can have a negative impact on the road.  But inflation has been declining month after month.

Chris Williams: Pedantic question, is it inflation declining or the rate of inflation declining?

Joe Patrice: That is a fair point.  The rate is declining.  Inflation is always kind of going up.  We are not deflationary.

Chris Williams: See, you’re one of my nerd friends that care.

Joe Patrice: Yeah, that’s fair. No, that’s fair. And inflation is not bad.  One of the best analogies I’ve ever heard for it is that inflation is like the booze that you put in the punchbowl.

(00:20:01)

You want a little bit in there, because if there’s none in there, that’s a problem, but you don’t want it to get out of hand.  I believe Paul Krugman uses that analogy and it’s a good one.

Kathryn Rubino: Delightful.

Joe Patrice: But when inflation gets too high, it becomes a problem.  But you always want some because some of it is proof that the economy is growing.

Chris Williams: I will say that is a bad– that is a bad analogy only on the fact that I occasionally like a couple of shots, so.

Joe Patrice: Yeah.  well, sure. So right.  So you want some and anyway, we’re approaching where we kind of want to be even with unemployment at a 50-year low.  That all seems to be an economy that’s not in recession, and in fact trending upwards.  So the fact that these firms are making cuts, what does that mean?  Does this mean that they have a negative view of the market that is not realistic?  Is it that their clients have a view of the market that’s not realistic?  Is it that they just really did over hire, and they are in line, they just had more people than they thought.  Unlike where — what the decision making is within all these firms is going to be interesting to see to shake out.  We’ve seen other firms say affirmatively they aren’t entertaining layoffs at this point.  Is that because they have a different view of where things are going, or they’ve managed their headcount a little better?  It’s going to be an ongoing story over the next few months.

Kathryn Rubino: It certainly seems like it’s more a headcount related, at least from our perspective, kind of on the outside looking in, just because 2021 was so wild.  In the lateral market, it was fire, it was crazy times, it was lots of folks jumping lots of places and taking all bodies.  You know, we’re hearing wild stories of firms, taking people without even fully interviewing them, just getting their resume and be like, “Start on Monday.”

Joe Patrice: Yeah.

Kathryn Rubino: So I think that given that environment, which was obviously unsustainable, but also had ripple effects, I think as the years kind of trickle on.  I think that that’s really what we’re seeing is kind of correction to that market.  And I think that that one year of wildness had a bigger impact on some firms than it did on others.

Joe Patrice: I think that’s probably true.  I mean I’ll just say to the extent like — you know, I’ve mentioned before that I consult with a recruiting organization.  At least from what I’m seeing on that front, there are still firms that are actively in the hiring phase.  There are job offers that are still out there.  Obviously, it’s not every practice area or anything like that.  There’s some cyclical effects going on.  But the fact that some people are still in the hiring mode when others are conducting layoffs does suggest that there’s a disjunct here.

Kathryn Rubino: Yeah.

Joe Patrice: How that plays out over the course of the next several months, it will be interesting.  So something to keep an eye on and allow us to keep playing our ode to Jim Mora.  Your clients are expecting you to know a lot of things about a lot of things.  Even topics like domain names.

Kathryn Rubino: Domains were definitely not covered in my law school classes.

Joe Patrice: Worse yet, your client might want a domain name to protect their brand or support a product launch that’s already taken.

Kathryn Rubino: Fortunately, GoDaddy’s domain broker service can help.  Expert brokers will help you securely and confidentially get that perfect domain.

Joe Patrice: To learn more visit godaddy.com/dbs.  All right, well finally today you know another angle on where the law firm world is going.  We did just see a fairly significant merger.

Kathryn Rubino: Yeah, yeah, it looks like big law firms are getting bigger.

Joe Patrice: Yeah.  So Holland & Knight has announced — We’ve known about this for a while, these talks have not been really secret for the last several months but they are closing the deal with Waller Lansden, which is a Nashville based firm.  They were the significant — I mean has multiple offices but a very significant southeast presence.  This brings Holland & Knight a lot more penetration into that area, probably makes them — I think probably the biggest employer in Nashville legally and we’ve —

Kathryn Rubino: Anticipate is to make them I think 26 on the Am Law 100.

Joe Patrice: Right.

Kathryn Rubino: Based on the previous earnings of both of those reps.

Joe Patrice: So that’ll pop them up a little bit. Yeah, I believe —

Chris Williams: So does it make them Hollander & Knighter.

Joe Patrice: No, I think the name will probably still be Holland & Knight.

Kathryn Rubino: It will definitely still be Holland & Knight.  Listen, they last year merged with Thompson & Knight, and if Holland & Knight and Thompson & Knight didn’t become Knight & Knight, they’re going to be Holland & Knight forever.

Chris Williams: Oh, no, not even that.  It should have been Knight, Knight.

Joe Patrice: Yeah, exactly.

Kathryn Rubino: There’s were so many possibilities.

Chris Williams: So many possibilities.

Kathryn Rubino: We’re like, “We’re still Holland & Knight.”

Chris Williams: They can go like, “Knight, Knight, we’re cut off of the rest of the competition, like to sleep on.

Joe Patrice: It would have probably been nice to have at least changed the Knight to the other Knight since the Knight that they actually are is you know, not exactly a figure with a great record.

(00:25:00)

You know, Holland & Knight both named after politicians from the segregation of south.  So you know, it would be nice if it was some other different Knight and they could have kept the same letterhead and at least acted like they were only half as bad, but whatever.

Chris Williams: That’s wild though.  I just imagined a bunch of people ready to do litigation in full chain metal.  I didn’t know that was a person’s actual —

Joe Patrice: Nice.  So anyway, — so yeah, so they’re going to still be Holland & Knight, this is happening.  We also had another merger and I apologized for not having all their names off the top my head, Maynard and Nexsen Pruitt are merging.  Also, this is two regional southeast firms merging together to make a more powerful southeast presence.  So I think the takeaway from both these stories is, Southeast is a hot market, but also —

Kathryn Rubino: Yeah, this new firm is expected to actually crack the Am Law 200 of this year.  So we’ll see.  It will definitely change the landscape for sure.

Joe Patrice: Yeah, I mean, that new firm is going to be over 500 lawyers.  So very much going to be a player in what we can start calling big law once you start hitting those kind of headcounts.  So, one takeaway, Southeast is a big market.  Another takeaway, that applies more to the Holland & Knight merger, but you know, a little bit to both, which is while we’re seeing these layoffs, while we’re seeing fear and trepidation on the part of some firms.  The answer to that for a lot of firms is mergers.  There are some reasons to believe that we’re going to, that this isn’t the end.  We’re going to see a lot more of this kind of merging, probably less of the merger of equals and more of the big firm taking over small —

Kathryn Rubino: Swallowing up, yeah, midsize firms.

Joe Patrice: Smaller or regional firms in order to expand.  We’re still a little confused where the — we talked a bit about Hogan, Lovells and Sherman, not quite clear how that one plays.  That’s kind of a merger of two big firms.  But most of what we expect to start seeing is more big firms trying to swallow regional or boutique firms to add talent that way.  It’s a natural outgrowth of bad economic times, I think, to try to use building out the book a little bit as a way of saving —

Kathryn Rubino: Diversifying the book too.

Joe Patrice: Yeah, diversifying the book to get out of it.

Chris Williams: This might be a goofy question.  But how do mergers and ethical conflicts work?  Because I would imagine, if there were like two reasonably sized firms, they merged together become one entity that just increases the amount of business that neither of them can do.

Joe Patrice: Oh, yeah — no, absolutely.  And there are issues always.  And you know, we were all ready.

Kathryn Rubino: And that’s also a big part of the reason why when these mergers happen, oftentimes, you will see a non-contentious shedding of partners where, you know, they take on new set of business, and all of a sudden, you know maybe our smaller partner, but you have a distinct book decides to go to another firm where there are no conflicts.  And it’s not no acrimony necessarily on either part, but that, you know, this book of business doesn’t work anymore.

Joe Patrice: Yeah.  It absolutely happens.  You do see a lot of spin off firms when the sorts of big mergers happen.  And yeah, so will spin off firms or firms just be able to like practice groups being absorbed, going to a different big law firm, yeah.

Kathryn Rubino: Going to a different big law firm that doesn’t have the conflict.

Joe Patrice: Yeah.  That is that is definitely.

Kathryn Rubino: There certainly are also, you know, anticipated mergers that fall apart because of conflict issue.

Joe Patrice: Oh, absolutely.

Kathryn Rubino: That is real.

Joe Patrice: Which is why you see a lot more these big firm take boutique firm, or big firm move into new geographic area where there’s a regional firm, because that reduces the likelihood that there’s going to be a conflict.  When you see two national firms who have offices in exact same places try to merge.  That’s where you start wondering, “Is this going to work?”  This seems as though at least a lot of partner books are going to has some tangential problems.  You know, you see sometimes partners, fire a client in order to make the deal work.  And then they’re compensated on the back end by getting some cut of the client that was in favor.  They can work it out internally, but that is — That’s a great question.  When you ever you start seeing mergers of like firms, you start seeing a lot of conflicts.

Kathryn Rubino: Maybe this is portraying my age as well.  But the last truly giant, firm, giant firm that I can remember actually coming to fruition was Dewey & LeBoeuf, and that did not have a happy ending.

Joe Patrice: Oh, yeah, no.

Kathryn Rubino: They did not have a happy ending.

Joe Patrice: Yeah, that one didn’t — What was the firm several years ago?  Was it Bingham(ph)?  Somebody tried, was in the midst of a merger and I can’t believe I’m not remembering this, but I feel like Bingham was involved, but whoever it was, there was a merger that was on the table and ultimately, the firm with leverage went, “Wait a minute.  We don’t need to merge.  We can just hire 80% of the partners.

(00:30:06)

Kathryn Rubino: We can just lateral all the useful people.

Joe Patrice: And that’s what they did.  They hired most of almost all of the people that left conflicts on the side.

Kathryn Rubino: And you don’t have the liabilities, right?

Joe Patrice: Yeah.

Kathryn Rubino: And inheriting the liabilities, okay.

Joe Patrice: No, it was it crazy day and all of —

Chris Williams: That is a flex.  Like we don’t need you, we just need your employees.

Joe Patrice: Yeah, pretty much all of this happened within a span of like 24 hours too.

Chris Williams: Oh shit.

Joe Patrice: So it was a big — it was a big story.  Yeah, that was — it’s been a while.

Chris Williams: Is there a documentary about that?  Definitely, that’d be a fire ass documentary.

Joe Patrice: Not that one, but there is a documentary about the Dewey & LeBoeuf, one that Catherine was mentioning, which was very good.

Kathryn Rubino: That was awful.

Joe Patrice: Our friend of the organization I’d like, that was made by Bloomberg, I believe.

Kathryn Rubino: I mean, the whole Dewey implosion was fodder for Above the Law for literal years, even before I worked here.  The firm went under and it was crazy.  It had massive repercussions on the industry.  And when we talk about the 09/2010 sort of mass layoffs that happened in the industry, a big part of it was the fact that a giant law firm went under.

Joe Patrice: Oh, yeah.

Kathryn Rubino: There were thousands of unemployed attorneys in New York City all at once.  It was a wild time.

Joe Patrice: Oh, God, yeah.

Chris Williams: See, I didn’t even know about that.

Joe Patrice: I mean, that was very before your time, yeah.

Chris Williams: But like, whenever I hear about lawyers talking about like, “Oh, layoffs happen, what have you round the 08 era, this is associated with the market crashing?  I don’t think about it as being a merger issue.

Kathryn Rubino: Well, it was both of those things.

Chris Williams: No, being both.  I didn’t know enough about the merger issue to think that that would be a factor.  I just thought it was marketing with the shoot and await.  I didn’t know why —

Kathryn Rubino: There were a lot of reasons I think why Dewey & LeBouef went under and certainly they were over leveraged.  They’re paying their top talent partners way too much.  There’s an entire documentary about all the reasons why they went under.  But going under many thousands of unemployed attorneys, plus there were massive layoffs at other firms that were also, you know, like hundreds off at x firm, hundreds — there were just thousands and thousands of unemployed attorneys in 2009 that —

Joe Patrice: You know, we never made the joke that that was Truman’s revenge.  You know, Dewey defeated by Truman.  It took a half century for him to get all the way back.  Anyway, so I think that’s what’s going on layoffs are still out there to be worried about but there’s also mergers happening.  So it’s an interesting time in the industry, which you can hear about on a weekly basis if you subscribe to the show, and then you get the new episodes when they come out and everything.  You should get reviews and write stuff and that helps.  You should be listening to other shows, Kathryn’s post the (00:32:44), I’m a guest on the Legal Tech Week Journalist Roundtable.  There’s other shows by the Legal Talk Network that we are not involved in, but that are also awesome.  You should be reading about the law every week so that you can — you know, every day, frankly, so you can see these stories and others.  Yeah.

Chris Williams: If we wanted to get like your thoughts on things that went on Above the Law, this website or the podcasts, are there any other places we can find you online?

Joe Patrice: You know it’s really interesting you mentioned that.  You can also follow all of us on various forms of social media.  I will just give the Twitter ones for now, but we — use your imagination, you’ll probably find us on other things too.  Although I haven’t really — I haven’t been able to really get into using these other ones yet.  But I feel like there needs to be a killer app like TweetDeck is to make these others work, but whatever.  Point is Twitter-wise, you can follow Above the Law at ATL vlog.  You can follow me at Joseph Patrice, Kathryn’s at Kathryn1, the numeral one.

Chris Williams: The numeral one.

Joe Patrice: Yeah, she raises her finger as she does that.  Chris is at Rights for Rent.  We have Facebook groups too for Above the Law.

Chris Williams: Facebook, isn’t popping on recently.  We should probably mention Facebook more often.

Joe Patrice: People should do that.

Chris Williams: We’re on Facebook.

Joe Patrice: Yeah.

Chris Williams: It was less censorship there.

Joe Patrice: Yeah, I think that’s probably fair, less.  Anyway, yeah, so with all of that said —

Kathryn Rubino: Peace.

Joe Patrice: I think that’s it, yeah.

Chris Williams: See you next week.

Joe Patrice: Bye.

[Music]

Continue Reading