Twelve Years Down the Drain

This article originally appeared in The Wall Street Journal
April 9,2009
By Elizabeth Wurtzel

The credit crisis has cost us a dozen years’ wealth in a matter of months.

Anyone who toils in the legal-industrial complex — better known as Big Law — should be able to tell you how we got here. Corporate attorneys like me, even those with the eyesight and insight of Mr. Magoo, all should have been able to see this financial collapse coming.

The market has lost a dozen years worth of wealth in a matter of months. Millions of hours of manpower put in by investment bankers on Wall Street and the lawyers who enabled them — the kind that brought home those bright shiny bonuses that are now causing a populist uprising in the hinterlands — have been wasted away by what is kindly called the credit crisis. And whatever lessons the powers that be might learn from this adjustment — that salary structure should change, or that the billable hour is an anachronism — it seems no one has stated the obvious: The whole system is warped.

These days, deals are down. It’s so quiet that even at mergers-and-acquisitions hothouses like Cleary Gottlieb and Skadden Arps, junior associates have been known to sneak out of the office and head home by six o’clock. Exposed to the sunshine that exists outside of corporate skyscrapers for the first time, these people now know what we’ve all been telling them for years: The sky is actually blue.

But daylight savings time notwithstanding, the traditional life of a law lackey — even, or especially, a graduate of a fancy law school like Harvard or Yale — has meant virtual residence at the firm. Meals were delivered by Seamless Web and the roll-top desk was used for catnaps, because whatever it is that had to happen had to happen immediately, or yesterday. The emergency-room atmosphere that permeated the processing of derivatives deals, corporate takeovers, and whatever else has been going on at Goldman, Bear, Citi and Merrill for the past decade, could rival that of an operating room during open-heart surgery. Only, of course, it was a matter of money — not life or death.

Perhaps money and mortality are all the same to some. But as a way of making the former, this hysterical ER-approach has proved futile. All those lost nights of sleep are now lost 401(k)s. So what was the point? Corporate lawyers could have been sunning in St. Bart’s and ended up with the exact same result, plus a tan.

Money made the mad hours worth it. This is why the insanity of working as if the very fate of nations were at stake when it was actually just about whether or not to do a leveraged buyout of, say, a company in Decatur, Ill., went unnoticed by an entire industry.

Anyone in a position to criticize this inhuman work ethic — meaning, anyone who liked sleeping, or dating, or occasionally walking his own golden retriever — opted out instead. These are the people who are now attorneys in the public sector, who run nonprofit organizations, or who simply made what money they could and are now painting landscapes in Taos, or skiing full-time in Sun Valley.

The Wall Street atmosphere — in both law offices and investment banks — is not open to dissenting opinion. If you blow the whistle, it’s only to hail a taxi to take you away, because complaining is just not tolerated. So anyone sharp enough to say that these deals were a bad idea in the first place didn’t stay on long enough to make the point. And we all know that organizations that don’t retain thoughtful opposing views are doomed by hubris. Hello, Lehman Brothers!

Still, I don’t believe any of the major players are re-evaluating their ethos — only their decision to invest in subprime mortgages. And this is foolish, since the problem is not just that the financial instruments were bad bets, but that the corporate structure and the feverish rush of it all are fundamentally flawed.

I would love to call the system despicable or detestable or something evil-sounding, but that would be giving it too much credit. It’s really just the march of dunces.

A dozen years worth of sleepless nights down the drain like dirty bathwater. Pity these people.