[Minor semantic note, anyone? If you’ve doubled down on efforts to stay in communication with colleagues and friends {and no, I don’t own stock in Zoom, more’s the pity}, you know that there’s little need to feel socially distant; it’s physical distancing. I find this perhaps pedantic distinction oddly comforting.]
Now an update to our last column on this topic.
As John Maynard Keynes said, “When the facts change, I change my mind; what do you do?” And as our own New York Governor Andrew Cuomo said just yesterday in his widely admired daily press briefing, when asked what “he thinks” is going to happen: “I don’t think; I rely on the experts and follow the data.”
To that end, things are already looking more dire on the two fronts of mortality and depth/duration/severity of the recession we’re now in, globally. Reinhart and Rogoff (see previous column) have already warned about widespread Emerging Markets national defaults, and the developed world’s corporate sector was massively leveraged a month ago.
Next up in this series:
- Some thoughts on what “type” of demand law firms are supplying; and
- What you should be doing.
Midrange Guy:
You are of course completely correct that in the Golden Era of single-tier partnerships (and zero lateral movement, which I think is both conceptually and structurally connected) partners were paid in profits and associates and staff in W-2’s. (Footnote: Partners might get an advance draw during the year against their year-end profit distribution but it was not “additional” comp, it was just to let them pay their monthly fixed expenses; it would be deducted from their profit share at year-end as an advance against same.)
Now that equity/non-equity/”income”/of counsel/&c. has blurred all these lines, I found in composing the article that it was convenient–and perhaps admittedly a bit lazy–to blur those lines in my composition as well.
The truly interesting behavior to keep one’s eye on now, I predict, will be whether equity partners start complaining that they never bargained for the downside of being an owner in crummy economic times. Wouldn’t that be rich?