“In the end, all of the decisions are going to come back to what does Morgan think,” Watanabe says. “Honestly, he deserves that respect, because it’s worked. It’s made everybody millions upon millions of dollars, and they all respect that. They may not all like it, but it’s hard not to respect a leader like that. He doesn’t drive that law firm with an iron fist. Not at all. He’s quiet, subdued, but in the end they know he needs to be OK with pulling the trigger.”
“If firms are doing cuts across the board and they are going to play around with distributions, it’s kind of hard to rope off the people who just came in and who they made a promise to,” said Larry Watanabe, a West Coast recruiter for Big Law firms. “Politically, that could be really ugly.”
An attorney who retires this year in a down market will, until the market recovers, have to live off of the reduced value of their pension plan. Some might find it more advantageous to keep working, West Coast legal recruiter Larry Watanabe says. This calculus brings on a new urgency when taking into account the handful of Big Law firms that still have mandatory retirement policies, he adds.
No law firm wants to be the first to cut staff or hold off on partner draws, but as is common in the industry, once a few major firms make a move, others will likely follow, Watanabe said.
Larry Watanabe, a California-based legal recruiting veteran and founder of Watanabe Schwartz, noted he has seen several transformational events in his 30 years in the industry. And his outlook is not sunny. “I’ve been through the Great Recession, 9/11 and the dot-com bust,” Watanabe said. “But nothing like this.”
“This week has been drastically different even than last week,” said Larry Watanabe, a West Coast recruiter for Big Law firms. “That is how rapidly things are moving. Unless it is a crucial, strategic hire that a firm really needs to make, they are tabling these deals.”