The World is (Sort of) Coming to an End for Attorneys

I have been a recruiter for nine years now and I think this is one of the craziest weeks I have ever seen in my opinion. The drama of layoffs, a leading attorney arrested for possible embezzlement and impersonation, holiday parties cancelled, bonuses cancelled–the news just keeps getting worse and worse. Law schools are also starting to report massively reduced hiring of their students–even the best law schools.

What is going on in the legal field?

I have a lot of opinions about that; however, the short answer is that a lot of stuff is going on and it is out of control. For more than a couple of decades the United States has benefited from a virtual monopoly in many fields. In finance, telecommunication, computers and other fields the United States has been a leader and this has created a great deal of wealth in the United States. What we are now facing, in my opinion, is a “perfect storm” of sorts.

The issues, as I see it, are two fold. Firstly, there are not a lot of new innovations in the pipeline that are driving investment and enthusiasm in the markets. Secondly, the ability of the financial markets to stimulate the economy has run its course, for the time being.

Innovation Has Largely Slowed Down
In 2000 and 2001 when there was a recession this was largely the result of the fact that a great deal of irrational investment had flowed into the Internet and cell phones. People saw the incredible value that these were bringing to the world, how they would change commerce, how we invested in commerce, and how we poured investment into them. When people realized much of this investment was misplaced and overly exuberant, a lot of the money that was flowing into the market was rapidly pulled back. Eventually, money started flowing back starting in 2002 and the economy recovered.

The issue we are facing now, however, is that all of this new technology has largely been adopted by most people so there are few opportunities around the United States for companies to rapidly expand this technology. Most people now use cell phones. Most people now have computers and computers are lasting longer. In addition, as computers spread around the United States this created many productivity enhancements inside companies. Documents could be processed faster and this created many opportunities.

The fact that innovation and productivity enhancements have slowed down so much is a huge problem. This is a very serious concern. The fact that there is nothing in the pipeline right now makes me very nervous indeed. While the prospect of new forms of energy is something that is in the pipeline, this is not necessarily something that is booming. It appears, however, to hold promise for propping up the economy the way the Internet and telecommunications and productivity enhancements from computers did.

As these new technologies fanned out across the world and America they created massive amounts of legal work here. Practice areas like intellectual property have thrived. Corporate transactional work thrived as companies grew and issued stock and often combined. All of what occurred with these companies generated by new technology, computers and the productivity enhancements served to create a massive amount of legal work.

The Ability of the Financial Markets to Stimulate the Economy Has Run its Course for Now.
After September 11, 2001, the Federal Reserve starting slashing interest rates like crazy. This started making housing more affordable for everyone because of the fact that people could afford more “house” for less payment. This also stimulated a great deal of lending to corporations, private equity activity and more.

On a more sophisticated financial side, another thing happened at the same time. It was the boom of the securities market. What was happening was that mortgages that were being issued were being packaged up and sold as groups of mortgages. Because interest rates were going down so fast, people could afford more “house” and prices of real estate appreciated rapidly. Very few of these mortgages were being foreclosed upon because if someone was not able to make their payments they were simply selling their house because it was most often worth much more than they had paid. Because so few mortgages were defaulting, the demand for these securities became overwhelming and even the riskiest securities instruments were very valuable.

I was involved in this to some extent because I also ran a student loan business at the time. The loans that this company was doing were also packaged and made into securities. I remember last year travelling to London to meet with investors in these securities. Most of the people purchasing these securities were from overseas. Places like Luxembourg, for example. They all lost a lot of money as well. Now all of these people who lost so much money are unlikely to buy stuff from American financial institutions like they did before for some time into the future.

As everyone knows, this whole “house of cards” started crashing down when interest rates started to rise. Once this occurred, banks were left with toxic securities that lost massive amount of value. The financial crisis as we know it had begun.

The issue with this, and what has confused politicians so much, is that they do not have a tool to do this again. There is no tool that I am aware of (or that politicians are aware of) that can be used to prop up the economy again.

Real estate was a booming practice area for attorneys for many years during this time. No more. In addition, the work created in securities was also plentiful. This work has also gone away. The field has been literally leveled.

None of this takes into account all of the money that was coming into the financial system from people refinancing buildings and homes. In addition, because borrowing costs were so low for a long time private equity companies were putting incredible amounts of money into companies as well. All of the money coming into the financial system was also generating a great deal of work for attorneys.

The legal world always does fine and there are always bright spots even when things are collapsing. But what we saw this week was more of an example of what is coming due to all of this. In addition, on Friday of this week the government released new payroll numbers showing that the job market has lost more jobs than any time in the past 35 years. Things are getting really, really bad and the problem is, there’s not much that can be done right now.

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Making Time for Yourself

If your work has slowed down or if you are unfortunate enough to be in the job market already, it is easy to fall into a depressed stupor. But keeping a positive attitude is important as you look for work (or while you ride out a slowdown in your department). One way to keep up your spirits is to make sure to carve out time every day to do something you enjoy.

There are many ways to do this. What is most important is that you find ways to reinforce your own self worth by doing something and being successful at it. For some, this might be doing volunteer work (helping the homeless, providing pro bono legal services to an arts organization). For others, it might be playing music with friends, writing poetry, visiting museums, reading spy novels, running or playing tennis.

For me, it is spending time with my children (I really enjoy cheering them on when they play sports or perform in a play or concert) and playing squash. It is also writing this blog and my blog CounseltoCounsel.

Last week I learned that CounseltoCounsel had been named to the ABA Journal’s Blaw100 for the second year in a row. It was nice to get the positive feedback for something I enjoy doing and it was a nice to be successful at something at a time when it is difficult to be a successful recruiter.

So go do something that you enjoy and be successful at it. Your success may not necessarily put food on the table; but it will feed your ego and ensure that you keep a positive outlook when it is most important to project optimism.

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The Power of the Handshake

I was recently at a networking event and met someone with a handshake that was memorable- but not in a good way. Upon introducing himself, this person proceeded to crush my hand with a death grip and a brash smile. Immediately, this colored the way I perceived him and my impression of him. My thoughts went to “hmmm… this person seems to be overly aggressive and maybe a bit insecure.”

Now, don’t get me wrong- I am all for a firm handshake that exudes confidence and professionalism. The handshake I encountered however, led me to think that this person was a bit obnoxious and full of himself. After talking with him for a while, I struggled to keep an open mind about this person and his representation of himself. I consider myself to be a pretty non-judgmental person in general, but I must admit that this first impression did stay with me for the rest of the time I was in this person’s presence.

On the opposite end of the spectrum are those folks who have the limp handshake upon meeting someone new. I wince at these types of handshakes as well. When meeting someone new, you want to avoid the feeling that you are shaking hands with a lifeless being. I can’t be alone in this feeling.

Therefore, it is important to remember that eye contact and a firm (yet friendly) handshake can give many positive cues to the person on the opposite side of your handshake. Like most things in life, a good handshake is something that is best executed in the happy medium spectrum of things. An approachable smile and non-clammy hands don’t hurt either.

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Bye Bye Bell Boyd, Hello K&L Gates!

I just learned that K&L Gates distributed an internal memo announcing that the firm has entered into discussions with the Bell, Boyd & Lloyd LLP in Chicago “with a view to combining the two firms in the first quarter of 2009.” (Bell Boyd distributed a similar memo today). I must admit that my first reaction was one of sadness. After all, as a native of Chicago who practiced at two mid-sized law firms in the city, I have many friends and former colleagues who work or have worked there (okay, I also have a close family member who spent 40 years there as well). Bell Boyd has been a significant part of the Chicago legal market for countless years, and to see it dissolve into K&L Gates made my stomach queasy. Just a few short years ago, it was known as “the” place to work. Associates who secured jobs at the firm were considered some of the luckiest people around.
Thankfully, my first reaction only lasted a moment. My second reaction to this announcement was one of excitement. After all, there is always more than one way to view a major change, and I am making a conscious effort to see this as a good thing for the attorneys at Bell Boyd and the Chicago legal market. Sure, it’s sad to see a highly regarded player in the Chicago market disappear, but it is also exciting to see the entrance of another one. K&L Gates is a global firm with over 1600 attorneys and 25+ offices. In fact, it is one of the largest firms in the world. The addition of such a major player to the city of Chicago is exciting and will surely provide legal opportunities for many Chicago attorneys in the future. So, while I am sad to see one of my favorite Chicago firms say goodbye, I am watching with great excitement and anticipation to see how K&L Gates fits into the Chicago market.

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Broaden Your Scope to Improve Your Job Search

One mistake that many candidates make is to focus their job search too narrowly on a tiny geographic region or a small group of law firms. For many reasons, this narrow focus can result in fewer opportunities and — equally as important — lower quality positions, than the candidate might otherwise find by “thinking broader.”

There have been numerous recent articles discussing how mid-size firms and firms in smaller markets are better positioned to ride out our current economic storm. These firms tend not to over hire, typically keep their overhead low, and generally are more in tune with the ups and downs of the economy. Further, as clients look to cut costs, many are shifting work (and funneling new matters) to smaller firms in regional markets that have lower billing rates than BigLaw.

For these reasons, to increase your chances of a successful job search, you need to think outside the box — and the major cities. For example, if you are conducting a job search in Los Angeles, expand your search to Orange County, Riverside and Santa Barbara. If you are looking at San Francisco, broaden your scope to Oakland, Palo Alto, and even Sacramento and other smaller regional markets.

In most cases, not only will your expanded search yield more interviews and offers, but you will be pleasantly surprised by the sophistication of the practices at these smaller firms, not to mention the relaxed atmosphere and improved lifestyle.

Remember, you never have to accept a job offer, and it doesn’t hurt to explore! Give it a try and I guarantee you will be pleased with the results.

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Choosing a Recruiter for Your Lateral Partner Search

BCG does quite a bit of work with partner candidates. The market continues to be strong for lateral partners nationwide.

Partner searches are different from associate searches, and it is important to find a recruiter who understands your objectives. I recently wrote an article on Choosing a Recruiter for Your Lateral Partner Search, highlighting important qualifications in a recruiter on partner searches. If you have a talented recruiter on your side, then your search will be much more pleasant and (hopefully) successful.

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Form Over Function

Technically, this is resume writing advice, but I hope that you take this advice as something much deeper in terms of how lawyers view their skills and value.

The questions I get so often are whether someone’s formatting is right, whether they are using the right terms of art, whether their language is similar to the language other candidate’s use to describe their practice. Those are valid questions, to be sure, but it occurs to me that the fact that these are the most frequently asked questions indicates that there is a lot more form than substance.

The most important thing about your resume is what it SAYS. I’m a stickler for resumes that have perfect form–no misspellings, no distracting formatting, no unnecessary information. Having an impeccable LOOKING resume is vital. But it’s not the point of your resume. I get the question “what do I say about myself?” but I can’t answer that question on anyone’s behalf.

That’s where you should start with your resume. Write down all of those things that only you know about the extent of your background.

Every attorney should be thinking critically about what they do and every single transaction, deal, negotiation and case that has made up their experience. Obviously, it is never appropriate to inflate your experience, but if you are content to just touch on the major points of your experience, you are doing yourself a disservice. I recommend to my candidates that the first step is to ignore page lengths, font, and format. Simply get on paper all of those things that you do–all of those things that would be relevant to a potential employers.

Have you taken the lead on a transaction or file?
Have you originated clients?
Are you published?
Have you handled a novel issue?
What industries are your clients in?

These are just a few places to start.

Your resume not only reflects what you can do — it reflects your enthusiasm for what you do. Think about that carefully. Does “write and research memorandum regarding various issues” sound like someone who loves what they do? Have you proven that you can articulate sophisticated issues of law or define complex transactions? If you can’t soundly answer those questions with a yes, start over again.

Sit down in a moment when you can think and review your experience carefully. Bring energy to the project, and be detailed. Let the formatting and tightening go, just focus on your individual experience and what drives you professionally. It will be worth it.

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Partner Growth Down By 50% At AmLaw 100

I read the most unbelievable article today on LawCrossing.com This article to me was one of the more significant articles I have read in a long, long time about the legal industry. In my opinion, what this article talked about has pretty significant implications for us all. Specifically referring to a West peer study and AmLaw 100 law firms the article notes:

The month of August saw the highest contractions in billable hours, about 5%. However, a slight surge in September brought the overall quarterly billable hours down only 2.5%. Also, the recent layoffs at large law firms resulted in a slowdown in attorney hiring practices, which came down 6% from last year. New partner growth at law firms was reported as half of that of the previous year.

Hiring down by 6% is a huge number in my opinion; however, even more striking is the fact that the partner growth was reported to be half the previous year. This is a huge number and a massive decline. If these numbers are down by an incredible 50% this means there is a lot less opportunity for people to be moving up.

One thing I think we will be seeing a lot more of in the near future is the growth of smaller firms which have less overhead and are more than happy to take on smaller clients. Many of the larger law firms simply cannot support partner growth.

The idea that the number of partners being made could decline so rapidly is a very serious warning. Firms simply no longer have the space for them in their ranks. The idea that upward mobility for attorneys is stalled will have serious long-term implications on attorneys choices in the future I believe.

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Be flexible, be smart, stay connected, don’t make assumptions!

Need a crystal ball?

It is probably safe to say that there is more than the usual amount of head scratching by those of us who try to predict the future and create strategic business plans.

It is a time of opportunity as well as challenge. In the legal field, a few key skills will keep you on track, in my opinion.

First, don’t resist change. The legal and business landscape is changing in a fundamental way and we all need to change with it if we want to stay professionally “healthy.” For those aiming at a law firm, consider reformulating your goals. Be open to change in practice area, size of firm, or geography. If you are an established senior attorney, you may need to consider a new platform to keep your careeron a firm foundation.

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