Cadwalader, Wickersham & Taft announced today it is laying off 96 lawyers in a second round of job cuts as the Wall Street firm continues to cope with the ongoing effects of the credit crunch.
W. Christopher White, the firm’s chairman, says the cuts will be in its capital markets and global finance groups, which have been hit hard by the reduced appetite on Wall Street for commercial mortgage-backed securities. The cuts are on top of the 35 associates Cadwalader laid off in January, bringing the total to 131.
“If it had been, as we anticipated in the early part of the year, a less severe contraction and not as prolonged a contraction, we would have ridden this out,” White says. “But it seems clear from the advice clients are giving us that this will be more severe and longer than we anticipated.”
Of the 96 affected lawyers, White says 90 percent “are being laid off because of the downturn in the real estate finance and securitization market.” The job reductions principally affect Cadwalader’s New York, Charlotte, and London offices (the majority are in New York); one or two Washington, D.C., lawyers also face cuts, White says. Most are associates, though some special counsel are affected.
Cadwalader also is dismissing administrative staff, White says, though numbers were not immediately available. Cadwalader already had a hiring freeze in place since the fall, which remains in effect. To date, at least 21 staffers have left and not been replaced.
Cadwalader decided not to rescind any offers from its incoming class of associates, White says. A spokeswoman for the firm says Cadwalader expects 70 new associates.
Cadwalader expects its overall head count come Oct. 1 to be 580, White says. The firm had 630 lawyers at the end of June.
Cadwalader, considered a major player in commercial mortgage backed securities, has suffered from a work shortage in its capital markets and real estate finance groups since the crunch took hold in the second half of last year. The firm was already forecasting for a decline in revenue, but White says the firm’s original projections budgeted for a rebound in the second half of 2008. The firm no longer believes that will occur.