The ‘Cravath Scale’ Sees De-Scaling in London Office
Cravath – the very pinnacle of law firm pay rates and the famed Cravath Scale – has seen layoffs while the London office undergoes a restructuring process.
The fact that even the most successful and wealthy firms are not immune to the need for staffing adjustments in today’s legal landscape is sobering for many lawyers.
We recently reported on the junior partners at Withersworldwide being called upon for a capital contribution towards the firm at a time of economic uncertainty.
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And we also reported on the ‘stealth’ and ‘non-stealth’ layoffs that are occurring with some biglaw firms in the UK and elsewhere.
The layoffs were announced from Cravath’s London office, where the firm has let go of an undisclosed number of associates as part of its efforts to reconfigure its staffing.
Big Law Salary
Since its opening in London in 1973, Cravath’s London office has primarily employed a U.S. finance team. However, earlier this year, the firm embarked on a strategic expansion plan by recruiting finance professionals qualified in England and Wales from Shearman & Sterling, a move aimed to enhance and diversify the firm’s practice areas.k
But it has been a leader on the big law salary scale.
According to law blog RollOnFriday the firm’s repositioning has had unintended consequences for its U.S. lawyers in London, as some have been made redundant to make room for lawyers qualified in England and Wales.
There have been conflicting reports about the extent of the layoffs, with some sources claiming that the entire class of 2021 and several other associates were terminated. However, another source close to Cravath’s U.S. management refuted this claim and stated that the redundancies affected associate levels across the board.
Cravath has chosen not to comment on the specific details of the layoffs. RollOnFriday also highlighted a statement from a management source, suggesting that the firm had made a “limited adjustment” to its associate ranks in London and eliminated a select number of positions.
The Cravath Scale
The “Cravath Scale” is a salary scale that sets the standard for elite law firms in the United States. The scale is based on the number of years an associate has worked at the firm which is known for its high salaries, which often exceed the market rate.
Cravath’s decision to conduct layoffs may have significant implications for its remaining associates, as well as for the wider legal industry.
Cravath’s recent layoffs serve as a reminder that even the most prestigious law firms must adapt to evolving market demands and make strategic decisions to remain competitive.