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Subprime Woes Hit New York Law Firms

For the first time since 2001, lawyers are being let go

By Jim O'Neill,  Newser User

Posted Nov 21, 2007 10:52 AM CST
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(Newser) – The continuing mortgage crisis and tightening credit markets are claiming a new batch of victims: Lawyers. Layoffs at Clifford Chance, the world's highest-grossing law firm, have started, Bloomberg reports, and up to 5% of salaried associated at New York law firms may get the ax as work on mergers, acquisitions and private equity deals slows down. Experts say they’re the first major cuts since the technology bubble burst in 2001.

“Law firms who rely on those major Wall Street banks are being hit the hardest,'' said one attorney. Associates, who start at $160,000, may find solace in average bonuses of $115,000 from a record first two quarters this year in which $492.8 billion in deals were made; 2006 bonuses ranged from $30,000 to $65,000.

New York law firms are letting go of associates as the collapse of the subprime mortgage and credit markets causes related work to slow.
New York law firms are letting go of associates as the collapse of the subprime mortgage and credit markets causes related work to slow.   (Shutterstock.com)
The Official Logo for Clifford Chance, the world's highest-grossing law firm, has dismissed six senior associates who'd worked previously on mortgage-backed securities.
The Official Logo for Clifford Chance, the world's highest-grossing law firm, has dismissed six senior associates who'd worked previously on mortgage-backed securities.   (Wikimedia Commons)
A foreclosure sign tops a sale sign outside an existing home on the market in northwest Denver in this Aug. 29, 2007 file photo. As the housing market crumbles, high-profile law firms are beginning to dismiss associates working in related fields. (AP Photo/David Zalubowski, file)
A foreclosure sign tops a sale sign outside an existing home on the market in northwest Denver in this Aug. 29, 2007 file photo. As the housing market crumbles, high-profile law firms are beginning to...   (Associated Press)
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