Thacher Proffitt & Wood on Tuesday informed about 50 associates that their futures at the firm were uncertain because of the collapse of the market for mortgage-backed securities, an area where the firm had had a leading practice.
The firm's warning, first reported Tuesday on legal gossip blog Above the Law, affected 24 non-first-year associates who were told they were almost certain to be laid off in January unless the credit market substantially improved.
Additionally, the firm offered 29 first-years the option of taking four months' severance and leaving the firm. The firm's chairman, Paul D. Tvetenstrand, had previously said the firm would not have associate layoffs, but he said Tuesday that the outlook on the market had grown worse in recent weeks. Whereas the 350-lawyer firm had earlier projected the market would bounce back in a quarter or so, he said the feeling was now that the mortgage-backed securities market in particular would remain moribund for at least six months, if not longer. He said the warning and buyout offers were to give associates time to prepare. "It would be unfair to these associates to have them sitting on their hands" during that time, he said.
Details here from the New York Law Journal via Law.com. (Above The Law's post on the subject is here.)