Signs, signs, everywhere signs

It's beginning to look a lot like 2001 all over again. Law firms are shortening and scaling back their summer programs, pushing back start dates for incoming first year associates, laying associates off (though still usually couching it in terms of "performance issues"), and nobody has much work to do.

I have seen this horror movie before, and I can tell you what comes next.

Incoming first year associates will be forced to enter or split with practice groups they do not want to work in but that are busy, such as Bankruptcy. Firms will start offering incoming first year associates buyouts to either delay their start by a year or not come to the firm at all. Other firms will promise that if all associates forego bonuses this year, then they will avoid associate layoffs. Quietly, the criteria for receiving a good review and keeping your job will be ratcheted up to sky-high levels. A few handfuls of associates at each firm will be asked to leave during their reviews for not meeting their hours requirements, and then another few handfuls, and then at some point the firm will no longer be able to deny that it is laying off associates due to lack of work.

In 2001, it seemed as though every firm in Boston was cutting people left and right. Some of them had the cojones to call it a layoff. Some pretended they'd just managed to hire an inordinate number of bad apples and were weeding them out. My firm laid off over 20% of its associates in a span from October 2001 to October 2002. Other firms more dependent on tech clients and more affected by the NASDAQ collapse laid off as many as 40%. With hundreds of highly qualified laid off BigLaw associates on the streets fighting for the same handful of jobs, people stayed unemployed for months after their 3 month severance ran out. Salaries froze or went down.

I know I sound like a harbinger of gloom and doom, but the signs are popping up everywhere. Remember how I said the crazy BigLaw raises last year and the year before were a bad thing and a portent of approaching doom? Now, hopefully, you see why.

The sad reality in situations like this is that not one but two classes of associates become the most expendable: the young associates who are not profitable anyhow and are thus overpaid relative to the money they earn the firm, and the most senior associates who are paid the most. Last time, I was in the former category and now I have the misfortune of being in the latter. I do not have a good feeling about this at all.