Already, the financial crisis has led to significant layoffs; at least 50 lawyers in the UK, for example, have begun searching for work after being laid off from Lehman Brothers. More cuts are likely to come. In addition, there seems to be some doubt as to whether the remaining UK staffers will be paid this month. And to date, 100,000 layoffs have happened across the legal industry as a result of these and other firm dissolutions or restructurings.
However, because these institutions' demise may also mean a lot of work for lawyers simply because of the reorganization, possible litigation, and other matters that need to be addressed, it's also likely that there will be plenty of legal jobs to be had very soon.
That said, though, the collapse on Wall Street will likely mean new restrictions on leverage and risk, which will limit profitability as things go forward. That means that everyone is going to have to tighten his or her belt in the face of the changes to come.
Goodbye to employee loyalty and trust?
And there's another troubling trend following the Lehman Brothers' layoffs and the effects of the Wall Street crash in general on the legal industry: employee loyalty and trust are at an all-time low, with trust in one particular firm down 41%. What does this mean for the legal industry in general? It means that even those who don't get laid off from Lehman Brothers and other companies like them are still leaving in droves (or will be) to look elsewhere for work. In fact, one study inferred that fully 64% of people are considering leaving their employers, while 24% are actively looking for a new job. What does this mean for a company like Lehman Brothers? It means that precisely the people who have the experience to stay and rebuild the firm are exactly the ones who are leaving.
Is there a silver lining to all of this for ''layoff refugees''?
Nonetheless, ''layoff refugees'' from Lehman Brothers and other troubled companies who are looking for jobs in a depressed market are in fact lucky in some respects. Why? Because many recruiters are looking for top-notch legal staff, including lawyers. For example, after Bear Stearns' recent meltdown, many of the laid-off lawyers were recruited by top firms such as Simmons & Simmons, K & L Gates, Bingham McCutchen, and Brown Rudnick.
In addition, as Ricky Mui, banking specialist and legal director with recruitment firm Robert Walters, said, ''Competition for this pool of talent will undoubtedly be high across the financial services and commercial sectors.'' Mui added that because the financial sector is going to be so volatile, many lawyers in banking will be looking at new careers outside of the financial sector. In fact, many may very well be going back into private practice or even starting new careers overseas.
Layoffs create chaos, but they can also bring opportunities.
What this means for you if you've been affected by this crisis
As Mui's and others' statements have shown, even though lawyers previously employed in corporate banking may be in trouble in regard to a return to corporate banking or related work in the financial sector, many other sectors need their help — perhaps even especially because of the collapse. Therefore, even though profits and compensation may not be as high as they were prior to the collapse, this is simply because of a return to realistic financial practices and a reining in of out-of-control behavior.
As such, your own behavior, too, has to become more realistic and prudent. No, you may not get the type of compensation you were offered previously, but it will be compensation that's solid and lucrative nonetheless. So, update your resume and make sure that you're ready to go job-hunting if you've been laid off or if you think that a layoff is coming. And of course, if you don't feel secure in your present job, you're probably smart to feel that way, based upon the current environment.
Conclusion
The collapse of Lehman Brothers and other large financial institutions has certainly shaken up Wall Street and those who work on it, including lawyers. Many layoffs have already either happened or are purported to be in the works as Lehman Brothers' bankruptcy settles in and the full damage becomes known.
That said, though, if you have been laid off or fear you are going to be, take heart. Many other financial firms are looking for top-notch help in other sectors. Some are actively recruiting from Lehman Brothers and other troubled firms following this latest Wall Street crash, so if you're among those looking, make sure you're ready and willing to interview at a moment's notice.
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