Kasowitz Layoffs Tied to End of Credit Crisis Cases
Kasowitz, Benson, Torres & Friedman has laid off about 30 people, including associates, counsel, partners and non-attorney staff, according to a firm attorney close to the situation who said the layoffs were the result of a number of large cases nearing their resolution last year.
The job cuts affected mostly associates, the attorney said. There were also a few partners as well as some counsel and non-attorney staff involved. The New York office took the brunt of the layoffs.
The attorney spoke to the New York Law Journal on condition of anonymity, citing the sensitivity of the situation. Several sources outside the firm also confirmed layoffs.
The job cuts were a first for Kasowitz. "This was really the first time we've experienced anything remotely like this in our 21 years," the firm attorney said.
Led by managing partner Marc Kasowitz, the firm opened with 18 lawyers in 1993 as a spin-off of the firm now known as Mayer Brown.
In the wake of the financial crisis, several large firms laid off scores of attorneys. Meanwhile, Kasowitz' sweet spot was litigation involving the credit crisis, helping the firm open multiple offices and grow to about 365 attorneys in 2012.
The layoffs were an outcome of a number of large cases stemming from the credit crisis being resolved, but the attorney said the firm is still "extraordinarily busy."
"It's a matter of us managing the pipeline," the attorney said.
One Kasowitz client whose major litigation ended in 2013 was bond insurer MBIA Inc., whose legal battles with 18 banks lasted for several years.
In March 2013, Manhattan Supreme Court Justice Barbara Kapnick rejected a bid by Bank of America Corp. and Societe Generale SA to undo the 2009 restructuring of MBIA, which the banks claimed illegally transferred $5 billion in assets from MBIA's structured finance insurance business to its municipal bond insurance business (NYLJ, March 5, 2013).
Within a couple months of Kapnick's ruling, MBIA settled the litigation with Societe Generale and Bank of America, which wrapped up its four-year legal battle with multiple banks.
"That was a very large case. We had lots of people working on that," the firm attorney said.
Kasowitz Benson generated about $250 million in gross revenue in 2012, according to The American Lawyer. The attorney said the figure was "down a bit" in 2013, but declined to give specifics.
Although layoff announcements have stemmed since the financial crisis, large law firms are keeping a firm control of equity partner head count and overhead expenses.
Last year, Weil Gotshal & Manges trimmed associate head count by 7 percent, and laid off 110 nonlawyer employees. Several firms also have been laying off secretarial staff.
The Kasowitz attorney said the firm is expecting 2014 to be a good year. "We're very busy. Our litigators are very busy, and although things relating to the credit crisis are starting to wind down, a lot of those cases are still very active and we've seen a lot of new work," the attorney said. "We're very hopeful about 2014."