1. Hang the Recession A Case Update Sharvon Benjamin Luciano Furuti Rose Pompey Anthony Puente Mari Saucedo Kelly Schoenherr
2. Agenda Introduction/Case Overview Struggles of Thacher Proffitt & Wood Employee Update Sonnenschein Nath & Rosenthal today Current unemployment political debate Job creation Conclusion Questions
3. Thacher Proffitt & Wood’s growth was mainly due to mortgage-backed securities. Thacher Proffitt & Wood loses 100 attorneys to a competitor. Thacher Proffitt & Wood pursues a merger with another firm to keep its doors open. Thacher Proffitt & Wood law firm goes out of business. During the collapse of the housing market Sonnenchein Nath & Rosenthal implemented a growth plan. Sonnenchein Nath & Rosenthal hired attorneys from a failed rival. Introduction
4. The Struggle Sub-prime crisis strikes More than half of Thacher Proffitt & Wood’s attorneys join a competitor’s firm Plans for a merger fall through Thacher Proffitt & Wood closes it doors Thacher Proffitt & Wood Dissolves: Sonnenschein Rescues
13. How does this create a competitive advantage for firms? Sonnenschein Nath & Rosenthal saw the downturn as a chance to gain market share. Hired 100 of rival Thacher’s top attorneys as Thacher dissolved due to the economy Thacher’s financial-services lawyers would pair with Sonnenschein’s regulatory and lobbying practices in Washington Sonnenschein would hire the Thatcher attorneys at lower salaries than what the market had typically been offering before the economic crunch.
16. Salary Reductions & Lay-offs Sonnenschein Nath & Rosenthal plans to cut associate salaries, beginning June 1st. Sonnenschein Nath & Rosenthal recently laid off an undisclosed amount of associates. Sonnenschein Nath & Rosenthal reduces the salaries of their associates.
17. Current Unemployment Unemployment rate is 9.7% Payroll employment rose 431,000 in May Obama Administration strongly encourages job creation in the private sector
18. Job Creation Senate passed a $15 million job-creation bill Policy makers predict unemployment rate below 9% by the end of 2011. Banks are stabilizing but not improving rapidly.
21. Agency Group. (n.d.). The Employment Situation in May. Retrieved June 07, 2010, from FDCH Regulatory Intelligence Database: Business Source Premier database American City Business Journal. (2009, September 2). Sonnenschein lays off lawyers. Retrieved June 07, 2010, from Business Journals: http://www.bizjournals.com/sanjose/stories/2009/08/31/daily54.html Bario, D., & Staff. (2009). Proffitt and Loss. Legal Week. Fortado, L. (2008, December 23). Thacher Proffitt, 160-Year-Old Law Firm, to close. Retrieved June 09, 2010, from Bloomberg.com: http://www.bloomberg.com/apps/news?pid=email_en&sid=a9Oe4mPmsSkg Matthews, S. (2010, June 04). Lockhart Says Job Creation Too Weak for Big Cut in Unemployment. Retrieved June 07, 2010, from Bloomberg.com: http://www.bloomberg.com/apps/news?pid=email_en&sid=ap9vBhX95PvA Noe, R. A., Hollenbeck, J. R., Gerhart, B., & Wright, P. M. (2010). Human Resource Management: Gaining A Competitive Advantage. New York: McGraw-Hill/Irwin. Sonnenschein Nath & Rosenthal Profits Drop 3%. (2010). JD Journal. Weiss, D. C. (2008). Thacher Proffitt Announces Expected Dissolution. ABA Journal . References
Notas do Editor
Laid-off Associates -- This comes on top of the companies decision back in May to reduce base salaries for associates and move toward a performance based compensation plan.The longer a lawyer has been with the firm, the more their pay will be reduced.First year salaries, previously a Biglaw standard $160,000, will be reduced to $145,000. If an associate started in 2004 or earlier, the pay cut is 15%. Those who started in 2005/6 take a 14% cut. And the 2008 class is taking a 10% cut.
