Credit Crunch Hits Home for Lawyers
As the recent mass layoff at Cadwalader demonstrates, the credit crisis has taken its toll primarily on associates. (In this post mortem, Bruce MacEwen notes that only associates and of counsel were laid off). Still, partners are feeling the effects as well, as Bloomberg reports. Because firms remain uncertain about how much profit they will have to divide up at the end of the year, they've cut the payouts that partners can take home during the year. While monthly draws -- generally, around $25,000 a month for equity partners earning $1 million -- apparently haven't been affected, most firms have cut the extra payouts that partners receive beyond these minimums. Moreover, whereas in better times law firms would have advanced the money, partners are now taking out personal loans.
Still, it's tough to feel sorry for large-firm partners having to live on their draw alone. Compare that with their associates, who may be living on another, far more limited type of draw -- unemployment -- once their severance pay ends.
Posted by Carolyn Elefant on August 6, 2008 at 05:39 PM | Permalink
| Comments (1)