LAYING OFF THE LAYOFFS - What a difference just one year makes. At this point last year, law firms were in a hiring frenzy, gobbling up groups of associates because of a deluge of transactional work, including for SPACs, M&A matters, IPOs and real estate deals. Five or even six-figure bonuses were being offered to associates to get them to move—or stay in place without getting recruited. The current environment is… well, not that. With the slowdown in most types of deals in 2022, law firms have less work on their hands while also trying to navigate the economic fallout from increasingly unpredictable geopolitical events. Still, despite the Cooley layoffs announced Wednesday, some legal industry observers say the lessons from the Great Recession have led other law firm leaders to reject layoffs—at least for the time being—mindful that dramatic cuts now can cause even larger problems later. As Law.com’s Christine Simmons writes in this week’s Barometer newsletter, many law firms will likely stick to relying on natural attrition to cut ranks, as well as a cautious hiring approach to build certain practices, lest they risk more challenges in the months and years to come. To receive the Law.com Barometer directly to your inbox each week, click here.
COSTLY CRYPTO CRISIS - Am Law 50 firms appear to have found the secret to profiting from cryptocurrency. As Law.com’s Justin Henry reports, Kirkland & Ellis, White & Case and Quinn Emanuel Urquhart & Sullivan are charging multimillion-dollar legal fees for representing parties in the Chapter 11 bankruptcies of cryptocurrency trading platforms Voyager and Celsius, with some partner hourly rates ranging as high as $2,130. As law firms gather around the recently filed bankruptcy of FTX and BlockFi, fee statements in the Voyager and Celsius bankruptcies provide an insight into how much the wealthiest law firms in the world stand to gain in the restructuring of troubled crypto businesses. Both trading platforms filed for bankruptcy in July.
ON THE RADAR - Generac, a manufacturer of backup power generators, and its top officers were hit with a securities class action Thursday in Wisconsin Eastern District Court. The suit accuses the defendants of misleading investors about a defective component in Generac’s solar power products. According to the complaint, Generac’s largest sales partner, Power Home Solar LLC d/b/a Pink Energy, was forced to declare bankruptcy in October because the product defect exposed Pink Energy to millions of dollars in liability. The suit was brought by Gass Turek, Bernstein Litowitz Berger & Grossman and VanOverbeke Michaud & Timmony. Counsel have not yet appeared for the defendants. The case is 2:22-cv-01436, Oakland County Voluntary Employees’ Beneficiary Association et al. v. Generac Holdings Inc. et al. Stay up on the latest deals and litigation with the new Law.com Radar.
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