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1
The horror was in the waiting—the unknown, the insomnia, the ulcers. Co-workers ignored each other and hid behind locked doors. Secretaries and paralegals passed along the rumors and refused eye contact. Everyone was on edge, wondering, "Who might be next?" The partners, the big boys, appeared shell-shocked and wanted no contact with their underlings. They might soon be ordered to slaughter them.
The gossip was brutal. Ten associates in Litigation terminated; partially true—only seven. The entire Estate division closed, partners and all; true. Eight partners in Antitrust jumping to another firm; false, for now.
The atmosphere was so toxic that Samantha left the building whenever possible and worked with her laptop in coffee shops around lower Manhattan. She sat on a park bench one pleasant day—day ten after the fall of Lehman Brothers—and gazed at the tall building down the street. It was called 110 Broad, and the top half was leased by Scully & Pershing, the biggest law firm the world had ever seen. Her firm, for now, though the future was anything but certain. Two thousand lawyers in twenty countries, half of them in New York City alone, a thousand right up there packed together on floors 30 through 65. How many wanted to jump? She couldn't guess, but she wasn't the only one. The world's largest firm was shrinking in chaos, as were its competitors. Big Law, as it was known, was just as panicked as the hedge funds, investment banks, real banks, insurance conglomerates, Washington, and on down the food chain to the merchants on Main Street.
Day ten passed without bloodshed, as did the next. On day twelve there was a flash of optimism as Ben, one of Samantha's colleagues, shared a rumor that credit markets in London were loosening a bit. Borrowers might find some cash after all. But late that afternoon the rumor had run out of gas; nothing to it. And so they waited.
Two partners ran Commercial Real Estate at Scully & Pershing. One was nearing retirement age and had already been shoved out. The other was Andy Grubman, a forty-year-old pencil pusher who'd never seen a courtroom. As a partner, he had a nice office with a distant view of the Hudson, water he hadn't noticed in years. On a shelf behind his desk, and squarely in the center of his Ego Wall, there was a collection of miniature skyscrapers. "My buildings" he liked to call them. Upon completion of one of his buildings, he commissioned a sculptor to replicate it on a smaller scale, and he generously gave an even smaller trophy to each member of "my team." In her three years at S&P, Samantha's collection had six buildings, and that was as large as it would get.
"Have a seat," he ordered as he closed the door. Samantha sat in a chair next to Ben, who was next to Izabelle. The three associates studied their feet, waiting. Samantha felt the urge to grab Ben's hand, like a terrified prisoner facing a firing squad. Andy fell into his chair, and, avoiding eye contact but desperate to get things over with, he recapped the mess they were in.
"As you know, Lehman Brothers folded fourteen days ago."
No kidding, Andy! The financial crisis and credit meltdown had the world on the brink of a catastrophe and everyone knew it. But then, Andy rarely had an original thought.
"We have five projects in the works, all funded by Lehman. I've talked at length with the owners, and all five are pulling the plug. We had three more in the distance, two with Lehman, one with Lloyd's, and, well, all credit is frozen. The bankers are in their bunkers, afraid to loan a dime."
Yes, Andy, we know this too. It's front-page. Just get it over with before we jump.
"The exec committee met yesterday and made some cuts. Thirty first-year associates are being let go; some terminated outright, others laid off. All new hires are deferred indefinitely. Probate is gone. And, well, there is no easy way to say this, but our entire division is on the block. Cut. Eliminated. Who knows when owners will start building again, if ever. The firm is unwilling to keep you on the payroll while the world waits for loose credit. Hell, we could be headed for a major depression. This is probably just the first round of cuts. Sorry, guys. I'm really sorry."
Ben spoke first. "So we're being terminated outright?"
"No. I fought for you guys, okay? At first they planned to do the pink slip thing. I don't have to remind you that CRE is the smallest division in the firm and probably the hardest hit right now. I talked them into something we're calling a furlough. You'll leave now, come back later, maybe."
"Maybe?" Samantha asked. Izabelle wiped a tear but kept her composure.
"Yes, a big fat maybe. Nothing is definite right now, Samantha, okay? We're all chasing our tails. In six months we could all be at the soup kitchen. You've seen the old photos from 1929."
Come on, Andy, a soup kitchen? As a partner, your take-home last year was $2.8 million, average at S&P, which, by the way, came in fourth in net-per-partner. And fourth was not good enough, at least it wasn't until Lehman croaked and Bear Stearns imploded and the sub-prime mortgage bubble burst. Suddenly, fourth place was looking pretty good, for some anyway.
"What's a furlough?" Ben asked.
"Here's the deal. The firm keeps you under contract for the next twelve months, but you don't get a paycheck."
"Sweet," Izabelle mumbled.
Ignoring her, Andy plowed ahead: "You keep your health benefits, but only if you intern with a qualified nonprofit. HR is putting together a list of suitable outfits. You go away, do your little do-gooder bit, save the world, hope like hell the economy bounces back, then in a year or so you're back with the firm and you don't lose any seniority. You won't be in CRE but the firm will find a place for you."
"Are our jobs guaranteed when the furlough is over?" Samantha asked.
"No, nothing is guaranteed. Frankly, no one is smart enough to predict where we'll be next year. We're in the middle of an election, Europe is going to hell, the Chinese are freaking out, banks are folding, markets are crashing, nobody's building or buying. The world's coming to an end."
They sat for a moment in the gloomy silence of Andy's office, all four crushed with the reality of the end of the world. Finally, Ben asked, "You, too, Andy?"
"No, they're transferring me to Tax. Can you believe it? I hate Tax, but it was either Tax or driving a cab. I got a master's in taxation, though, so they figured they could spare me."
"Congratulations," Ben said.
"I'm sorry, guys."
"No, I mean it. I'm happy for you."
"I could be gone in a month. Who knows?"
"When do we leave?" Izabelle asked.
"Right now. The procedure is to sign a furlough agreement, pack up your stuff, clean off your desk, and hit the street. HR will e-mail you a list of nonprofits and all the paperwork. Sorry, guys."
"Please stop saying that," Samantha said. "There's nothing you can say that helps matters here."
"True, but it could be worse. The majority of those in your boat are not being offered a furlough. They're being fired on the spot."
"I'm sorry, Andy," Samantha said. "There are a lot of emotions right now."
"It's okay. I understand. You have the right to be angry and upset. Look at you—all three have Ivy League law degrees and you're being escorted out of the building like thieves. Laid off like factory workers. It's awful, just awful. Some of the partners offered to cut their salaries in half to prevent this."
"I'll bet that was a small group," Ben said.
"It was, yes. Very small, I'm afraid. But the decision has been made."
