The Marketability of Insurance Lawyers

We are frequently contacted by attorneys whose practices focus on insurance law. The relative marketability of these attorneys depends on the specific nature of their practice. Insurance coverage attorneys are highly marketable, and can take up challenging new positions with top law firms with relative ease. On the other hand, those who practice insurance defense find it more difficult to make an upwardly-mobile move, notwithstanding their often excellent litigation skills.

As a general rule, insurance coverage cases involve more sophisticated legal issues and are more likely to result in binding case law that will directly affect future claims.

The phrase “insurance defense” refers to situations where an insurer hires counsel to defend its insured against an action brought by a third party — typically, an action alleging that the insured has caused the third party to suffer bodily injury or property damage. The parties to the action typically are the insured and the third-party claimant. The legal issues revolve around whether the insured defendant is liable to the third party, and if so, for how much.

In contrast, the parties to insurance coverage actions generally are the insurer and the insured. The insured is seeking to recover under a policy of insurance, and the central legal question is whether the insured’s policy covers the loss or liability. Insurance coverage actions also may involve complex issues, including disputes between insurers-relating to matters such as primary/excess coverage, time-on-the-risk, or reinsurance. Such actions also may involve first-party claims for coverage (e.g., for a loss suffered by the insured, rather than by a third party, such as fire or earthquake damage to the insured’s home, or theft of the insured’s personal property) that are never at issue in insurance defense.

Automobile insurance provides a fairly straightforward example of the difference between insurance defense and insurance coverage. Imagine that an insured driver is involved in an automobile accident with another driver. As a result, both cars are damaged, and the other driver is injured. The other driver sues the insured for the injuries and damages allegedly suffered. The insured therefore seeks coverage for the other driver’s injuries and property damage, and asks the insurer to defend him in the lawsuit brought by the other driver.

If there are no coverage issues, the defendant’s insurer will appoint counsel to defend the insured in the action, and will attempt to resolve the claim for bodily injury and property damage, by settlement or otherwise. The legal issues will be fairly straightforward — how did the accident occur, what was the proximate cause of any resulting injuries and damage, and what is the monetary value of the injuries and damage suffered. If the insured is found liable, or agrees to a settlement within policy limits, the insurer will pay the tab.

But if there are coverage issues, the insurer may refuse to cover the damages suffered by the insured and the third party, and may refuse to defend the insured in the lawsuit brought by the other driver. In that event, coverage litigation may ensue — instigated by either the insured or the insurer — in which the operative question will be whether the insured’s policy covers-or potentially covers-the loss or liability resulting from the automobile accident, thereby entitling the insured to a defense and/or indemnity. The legal issues involved in such a suit will not focus on whether the insured is liable to the other driver. Rather, they will focus on matters such as whether the policy was in effect at the time of the accident, whether the driver of the vehicle was in fact insured under the policy, or whether the insured’s liability arises from an excluded risk (such as situations where the insured intentionally caused the accident).

Thus, insurance defense cases tend to focus on the facts of a particular incident or occurrence. Insurance coverage cases tend to focus on the language of the policy and the case law construing the policy language. Such cases can have a much more dramatic impact on the insurer’s bottom line, because they can establish precedent that will apply to future claims.

Insurance defense law firms are less likely to use legal recruiters than firms that handle insurance coverage work.

While insurance defense cases sometimes involve high-dollar claims, the practice generally tends to be high volume/low value. Because insurance defense work tends to be high volume, insurance carriers often assign a lot of cases to a particular firm, but pay a fairly low hourly rate. Insurance coverage cases, on the other hand, can be quite large scale, with multimillion dollar claims that take years to litigate (for example, claims for coverage of liability for environmental contamination that allegedly took place over decades, thereby implicating numerous policies). Carriers generally are willing to pay a much higher hourly rate for these types of cases, because as a general rule, the work is more sophisticated, and, as mentioned above, more likely to result in binding case law that will apply to future claims.

Firms that handle insurance defense work tend to pay their attorneys salaries that are below market. They are often unwilling to recruit lateral attorneys through recruiting firms, which can entail a substantial fee, preferring to hire candidates directly. On the other hand, many of the top law firms in the country handle insurance coverage work. Some handle such matters on behalf of insurers and some handle them on behalf of well-heeled corporate policyholders. In either event, such firms are able to command very respectable hourly rates for their work, and generate a healthy revenue stream in the practice area. Many such firms are our clients.

Insurance defense attorneys can maximize their marketability to top law firms by focusing on insurance coverage work to the greatest extent possible, and honing their litigation skills.

Many law firms that focus primarily on insurance defense work also do a fair amount of insurance coverage work. Attorneys who work at such firms can maximize their marketability to top law firms by handling as much insurance coverage work as they can get their hands on. Attorneys who have done so (including this author) have been able to leverage themselves into better-paying positions at more prestigious law firms, where they have handled more sophisticated and satisfying work. We have had success marketing such attorneys to top law firms by focusing on the strong, hands-on litigation experience that they have gained through their insurance defense work, and the exposure to sophisticated legal issues that they have gained through their insurance coverage work.

Such attorneys should approach a potential lateral move with considerable thought. Some individuals in hiring positions have a bias against insurance defense attorneys, perceiving them to be less careful in their work and to have less sophisticated experience than other candidates. To address any such bias, a candidate should ensure that his or her application is as well-presented and informative as possible. The application should highlight any insurance coverage experience-including a description of the specific nature of that experience (e.g., first-party or third-party, types of coverage/claims, etc.) as well as the extent of the candidate’s hands-on litigation experience. Many insurance defense attorneys have substantially more experience than their counterparts at more prestigious firms in handling depositions, oral arguments, arbitrations, and trial. This experience can be very attractive to firms when presented as part of a strong package.

A final thought to keep in mind is that conflicts can be a major concern in insurance coverage work. While some firms represent both insurers and policyholders, most focus on representing one side or the other. A firm that represents only policyholders may be unwilling to consider hiring an attorney who has represented insurers, simply as a matter of firm policy, or due to actual or perceived conflicts of interest. Your job search should be tailored accordingly.

Any of our BCG recruiters would be happy to discuss your insurance practice with you to determine how you can take your practice to the highest level.

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Does Contract Work Doom Your Career?

I have been unable to secure a permanent position since I passed the bar last year, and I have been considering taking temp opportunities until I can find something, but everyone has been telling me that taking on contract work can doom your career. Is this true?

We often hear from attorneys with whom we are working that they are contemplating doing contract work while they look for permanent employment. Generally, these are attorneys who have worked for a while at a law firm, but have been laid off or have relocated. They are thinking about doing contract work for one or more of the following reasons:

• They need the money that contract work will provide to support themselves during their job search;
• They believe that contract work will allow them to keep up their skills; and/or
• They believe that firms will view their contract work favorably, or at least neutrally, when evaluating their application for permanent employment.

Many of these attorneys are surprised to learn that we advise our candidates to avoid doing contract work if at all possible.

Why do we advise against contract work for our candidates? Because it makes them less marketable.

The attorneys with whom we work are not average; they are highly qualified, with strong academic credentials and excellent law firm experience. They are not seeking average positions with average firms; they are looking to take their careers to the highest level with a top law firm. The positions to which they aspire are highly competitive. The firms receive scores of resumes from stellar candidates, and are able to be very selective in deciding whom to interview and hire. Therefore, a candidate’s resume should be as “clean” and compelling as possible.

Unfortunately, top law firms tend to look down on contract work simply because it is contract work. This is true even if a firm hires contract attorneys; partners and hiring coordinators generally view the contract attorneys they hire as not up to par for permanent hiring. Moreover, firms know that, with rare exceptions, contract work does not provide the kind of stimulating work that will allow an attorney to maintain or upgrade his or her legal skills; the work often is rote and unchallenging.

Thus, if a hiring contact at a prestigious law firm to which you are applying sees that you are doing, or have done, contract work, they are less likely to be interested in you. This may not be fair, but it is the reality.

Another problem with contract work is that it increases the likelihood that you will have a conflict with the firm to which you have applied for a permanent position. Conflicts checks are a routine and a necessary part of any law firm hiring decision. While each firm’s conflicts check procedure varies somewhat, you generally should be prepared to provide a list of all clients for whom you have performed legal work in the past three to five years. This includes contract work. How unfortunate it would be if a firm was unable to make you an offer because you did some temporary contract work for a client that has a conflict with one of the firm’s clients! (Obviously, the chances of contract work causing a conflict increase exponentially if you work as a contract attorney for more than one firm.)

Of course, we understand that in certain circumstances, highly qualified attorneys have no choice but to do contract work while they look for a permanent position; financial realities may dictate it. But if you have the means to avoid contract work, you will increase your chances of making a lateral move to a top firm. Moreover, if you must do contract work, try to limit the number of firms and projects with which you become involved. This will lessen the likelihood of conflicts with the firm that you hope to join on a permanent basis.

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How Legitimate Are Law Firm Flex-Time Arrangements?

The struggle to balance career and family is not a new problem, but one that many employers have recently started to address and implement policies about. These changes are no longer an administrative annoyance, but are being recognized as actually adding value to firms and giving them an edge in a competitive environment. Obviously, having two working parents in a household is not uncommon, nor is a single parent support of the family — it is becoming the norm. Individuals need to find time for responsibilities outside of work. Therefore, it is important that firms address their level of commitment to institutionalizing and publicizing support for alternative work schedules.

Increasingly, firm policy on alternative work arrangements has become a hot button issue. Even attorneys who do not necessarily have children, or even expect to have any, find it an important indicator of a firm’s culture. Today’s attorneys are looking to join a progressive firm that values the importance of family and community. As you research different firms during your job search, it is important to find out as much information as possible regarding their policies on alternative work arrangements and gauge how important their views on the issue are to you.

Many attorneys refuse to approach firm management about reducing their time in the office. Unfortunately, many feel it would be detrimental to their careers to even mention the possibility of cutting back. The impression of most law firms is that billing long, horrific numbers of hours is the only way to succeed. In fact, a study by the National Association of Law Placement found that although 96 percent of law firms surveyed offered part-time positions, only 4.1 percent of attorneys actually took advantage. Listed below are some common stigmas about going part-time, as well as information as to why they no longer hold true:

1. “I am afraid of receiving marginal work.”
   Firms are always looking for rainmakers and value attorneys who have excellent client relationships. If you prove that you are an expert in your area, enjoy the practice of law and simply want to balance your lifestyle, firms will continue to provide you with challenging work. There are plenty of unproductive associates spending longer hours in the office, but not producing quality work. Attorneys who know your value and ability to handle sophisticated work will continue to bring you interesting and complex projects.
2. “If I am part-time, I will blow my chances of one day becoming partner.”
   Part-time partners or part-time attorneys on a partner track may be a rarity, but it’s not necessarily because the firm won’t allow it, but that many choose not to pursue it. With today’s technology, firms realize attorneys don’t have to be sitting behind their desk to be working. It is important to seek out firms that will be flexible, as long as you are also willing to be accommodating. In addition, firms recognize that a fair majority of attorneys requesting part-time positions are women. Most are focused on increasing their number of female partners and will work with them in an effort to keep them on track.
3. “Part-timers don’t seem committed to the firm. I’d be the first to go if there were cutbacks.”
   More and more firms tout themselves as “lifestyle firms.” This catch phrase is often used as a response to the “What makes you different?” question. This all comes from the recognition of the fact that caring about life outside of work does not indicate a lack of dedication to the practice of law.
4. “Why should they keep me around if I’m not billing the hours? They’ll say I’m costing them money as opposed to making them profitable.”
   Of course, a firm’s main concern must be the bottom line, as it has to generate a profit in order to survive. Ultimately, you may not earn as much as some full-timers but that doesn’t mean you’re costing the firm money. All firms recognize the value of a long-term investment and how much money is spent training attorneys, only to have them leave and have another firm benefit. Again, client relationships, quality of work, and your mental health are more important than cutting back some hours during the week. Because longevity reaps many rewards, firms want to keep their attorneys happy and will bend to accommodate their needs.
5. “The clients won’t want to work with me, they’ll be afraid I won’t be around for them.”
   Clients increasingly have diversity requirements when it comes to selecting their counsel. As for the male/female ratio, clients recognize that flexibility equals higher morale which ultimately equals higher retention. Clients appreciate the “institutional knowledge” of their counsel and have no desire to continuously train new attorneys. In addition, many are supportive of reduced-hours or flex-time because, quite honestly, they notice little difference in the availability of their attorney. They realize attorneys are competent professionals who have no desire to ignore their client.
6. “The firm says they support alternative schedules, but they don’t even have a policy in place and I’ve never heard anyone in management mention the possibility.”
   Many firms will say they have alternative schedules, but do not have a written policy, which may reflect a lack of dedication on the part of the firm. Firms should have a specific written policy stating fair and steadfast guidelines that are available and more importantly, publicized, to all attorneys. If a policy is not addressed, attorneys will more than likely assume it is discouraged. It is important to ensure a policy is in place, rather than discovering options through informal networks, such as word-of-mouth.
7. “Other associates in the group will resent me, they’ll say I’m the reason they have to put more hours in and don’t have enough time for their own families.”
   Resentment and isolation by their colleagues is a legitimate concern for attorneys who decide to work an alternative schedule. Aside from proving that you are still making a valuable contribution to the practice, it is really up to the firm itself to publicize its support and make it known that it is a viable option for everyone, not just a chosen few. For this reason, it is important that you are aware of your firm’s commitment to this practice and ensure their support, from management on down.
8. “I am sure no male attorneys ever ask for part-time, they’ll laugh at me.”
   Most people are aware that flexible scheduling is no longer only an issue with women, particularly in the field of law. Women are the growing majority in law firms and they may place just as much of an emphasis, if not more, on their careers. This allows men the opportunity to spend more time with their families, while not sacrificing the overall level of income the household receives. Men can be just as conflicted about their time away from home; they just tend to be less vocal about it. Firms are changing policy daily to accommodate and attract new attorneys. They recognize that although people still have a loyalty and commitment to their firm, they have an equal dedication to quality of life outside of work. Of course, some or all of the concerns listed above still exist in some firm cultures. Therefore, it is essential to ask the questions and do your research before taking the next step in your career. If the issues above are important to you, you need to be sure that they are important to the firm as well. After all, a happy lawyer is a productive lawyer.

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How to Cope With a Change in Employment Status

We regularly read and hear that “jobs for life” are disappearing, to be replaced by a pattern of consecutive jobs and unpredictable career dislocations. When the time comes to face such a change on a personal level, these statistics take on a whole new meaning.

The emotions one experiences during a change of employment status are entirely normal. Although no two people react exactly the same way, most of us experience a range of emotions that includes shock, denial, anger, worry, depression, resistance, relief, acceptance, and the need to take action.

Fortunately, a change in employment status does not have to lead to a gloomy spiral of events. Your initial feelings of anger, frustration, and despair can and will be overcome and eventually replaced by feelings of acceptance and control.

By thinking positively, taking appropriate action and looking toward the future, this transition can become an opportunity to secure a more satisfying position. Throughout this process, your recruiter can help you take constructive and creative steps towards developing a positive job campaign, and moving to the next step of your career.

Facing the World during Your Job Search

Family, friends, neighbors, and colleagues may already be asking you “What happened with your job?” This is a question you will frequently hear as you begin your job search. It is important to handle this question capably, regardless of who asks it. Therefore, one of the first things you should do is develop a response that is truthful and acceptable to you and prospective employers. When creating your response, you should consider applying the following: (1) keeping it short and factual, (2) be as positive as possible, and (3) put your best foot forward, but remain truthful.

• Keeping it Short: Generally, the more you try to explain, the more difficult your explanation becomes. You should prepare a short, to the point statement, and be prepared to answer follow-up questions, but only if they are asked.
• Be as Positive as Possible: Negative statements about your former boss or employing organization will only hurt you. The last think you want to do is burn bridges, or give a prospective employer the impression that you are a disgruntled employee. By keeping your statement as positive as possible, you will only help to advance your candidacy.
• Put Your Best Foot Forward, But Remain Truthful: There are a number of factors that result in someone leaving. Explain them to your recruiter, he or she will help you determine reasons that are most positive and easiest to explain, while remaining truthful.

What It Takes to Succeed

First, it is important for you to believe that you will succeed in your job search. In order to do this, you should take some time and determine your strengths, and clarify your objectives. The following steps will help you put together an effective plan for your job search, and help you create a strategic plan with your recruiter:

• Take Stock: You should identify past successes, current strengths, overall work style, and personal preferences.
• Refine Your Career Objectives: You should be clear, focused, and realistic about your career objectives, based on your past work experience and academic credentials.
• Work with Your Recruiter to Make a Dynamic Presentation: Your recruiter will help you to draft an effective resume, and review interview skills, so that you may be at your highest level of effectiveness when approaching a potential employer.
• Work with Your Recruiter to Create a Marketing Strategy: Your recruiter will help create an effective marketing strategy on your behalf, in terms of firm selection, and the type of presentation to be made to these firms.
• Be Persistent: The job process can be a long and challenging one, but your commitment to the search and implementation of your recruiter’s plan will give you the best chances to ensure a successful outcome.

Job loss can be a very emotionally traumatic experience. In fact, it ranks among the highest of all stress-causing situations. However, rather than looking at a job loss as a horrible thing, you should focus on its positive aspects. Remember, this might be an opportunity for you to find a more rewarding position. Be open to opportunities. You never know what doors this turn of events may open for you.

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Lawyers Losing Interest in Partnership

Associates’ Views on Partnership Has Shifted

Today’s associates are not necessarily as interested in making partner as they once were. For some, it seems more unattainable and less desirable than it has been for associates in the past. This is especially true coming out of a recession, when firms are typically electing fewer partners. As a result, there appears to be a definite shift in the goals of some of today’s law firm associates.

Increasingly, lawyers are now more focused on using their time at law firms to gain work experience and earn money, without having to commit long-term. Associates often leave law firms before they can even be considered for partner, either by moving in-house or out of the profession entirely. In fact, we’ve met some associates who go to law firms without any intention of staying there long enough to be a partner. Law firms do not always discourage such attitudes since economically they can’t make everyone partner.

There are many reasons why associates quit, including poor performance reviews, the pressure of billable-hour requirements, and family obligations. Another very common reason why associates leave their firms is the lack of perceived opportunity for advancement. Especially in extremely large law firms, associates believe making partner is out of their grasp. And, for many, it is true. The bar is certainly higher to become an equity partner. The saying, “you work hard and pay your dues and you’ll make partner” no longer always applies. Partnership is not just about a well-developed skill set or technical expertise in a practice area, but also the associate’s potential to be a savvy business developer.

Road to Partnerships Is Getting Longer

The fast track at top law firms is slowing down. Major law firms are sometimes prolonging the period leading up to partnership because of the desire for more experienced associates, an active market for lateral partners, and greater pressure to improve profitability. At firms where an associate’s first shot at partnership once came around seven years after law school graduation, it can now come around 10 years after, or longer.

Partners want associates to have more experience. However, at the same time, clients are demanding leaner staffing on matters thereby resulting in fewer opportunities for associates to gain experience. And in a down economy, there are fewer deals where associates can build their skills. Also, lateral hiring of partners with business results in a large pool of homegrown senior associates who have to wait for partnership consideration. Further, there is another pool of lateral senior associate hires who usually have to face a prolonged wait for partnership as well, especially since firms often take their time to reach a high comfort level with associates who were trained elsewhere. Finally, because low partnership numbers drive up profits per partner, firms may be wary of making a large number of even well-qualified associates partners.

What Is Left for Those Who Do Not Make Equity Partner

Inevitably, there remains a plethora of senior level associates who start to feel alienated and, unless the firm gives them effective feedback on the prospects of partnership, will most likely opt to quit the firm.

One method firms have been using to deal with this situation has been the institution of non-equity partnership tiers. In fact, over the years, many changes have occurred in the traditional partner-associate structure. Permanent associates, temporary attorneys, staff or contract lawyers, of counsel and non-equity partners (NEPs) have all been added to the mix.

Non-equity partnerships have long been utilized by large law firms, but the use of this alternative is on the rise. In fact, most large law firms have created some form of NEPs. Even smaller firms are following the trend. The popularity of this structure continues to grow to the extent that the number of non-equity partners in many firms is increasing more rapidly than the number of equity partners.

NEPs: Reasons for the Rise

There are at least five reasons more firms are creating an NEP tier:

1. to lengthen the equity partnership track in order to give younger lawyers more time to build their skills and their business;
2. to postpone on having to decide who deserves to make partner;
3. to avoid reducing profits per partner, particularly when profits are down;
4. to try to retain associates who may not, or will not, become equity partners and might otherwise leave the firm; and
5. to accommodate the many young lawyers today who don’t want to become equity partners because they don’t want to assume the responsibilities associated with partnership, and a non-equity partnership will provide this middle ground.

Types of NEPs

There are two types of NEPs: temporary and permanent.

Temporary status: In firms where NEP status is defined as “temporary,” or simply an additional step to full partnership, associates (or laterals) are elected NEPs for a designated period, usually not more than two to three years. The additional time before consideration for equity status enables them to gain more legal and client service experience, develop areas of expertise and develop more business. It also gives the firm more time to evaluate the lawyers.

Permanent status: In firms where the category is defined as “permanent,” NEPs will generally not then be considered for equity partnership — although there can be exceptions. In order to retain these lawyers, the firm designates them as “partners” to the public without defining their NEP status.

The Advantages of NEPs

NEP status has advantages for both lawyers and law firms. For one, while the lawyers are considered to be full partners to the public, they gain additional time to develop before facing the possibility of not being elected to full partnership. And lawyers who don’t wish to assume the financial obligations and time commitments required of equity partners can still become partners. From the firm’s perspective, the tier allows them to buy time and hold on to valuable lawyers without having to make them full equity partner.

Other Alternatives

Non-equity partnership is not the only alternative for a firm. Other options include creating a permanent category of “senior associate,” “senior lawyer,” or “special counsel”; or designating certain associates as “senior associates” and giving them substantial bonuses. This usually indicates the firm’s strong commitment to making these associates equity partners once they complete the normal partnership track. Of course, there is always the option to just let go of senior associates without allowing them to achieve partnership.

Conclusion

Just because the prospect of equity partnership is not as easy to come by or may take longer than in the past does not mean that you cannot have a long, stable career with a law firm. At the very least, you should know that there are other options available for lawyers at law firms besides straight equity partnership. Perhaps a non-equity partnership arrangement may even work out better for your career goals. If your current law firm is not in a position to offer you partnership, an attractive alternative to partnership or even go into discussions about your prospects for partnership, don’t be discouraged. There is no need to feel that there is no longer a place for you within the realm of a law firm. Perhaps it’s just time to go into discussions about joining another law firm.

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Making a Lateral Cross-Country Move to San Francisco

I’m a litigator living in Boston and work at a large firm. I’m unhappy with my current firm environment, and I want to relocate to San Francisco since the market is picking up a bit and I wanted to practice in S.F. as soon as the market got a bit better. I have strong credentials, but have not passed the California Bar. I do have ties to the area since I was born there, have family there, and my girlfriend is working there as well. What are my chances to successfully make the lateral move to San Francisco?

Dear Ryan:

Thanks for taking the time to write to me: the short answer to your question is “it depends.” Obviously the answer to this question answer is a case-by-case basis, and you really haven’t provided enough data to allow me to provide clear guidance, so I would encourage you to talk to me or one of my colleagues in our San Francisco office so that we can advise you more fully.

First, let me correct a misperception about the litigation market in San Francisco–it is one of the few areas of the law that has been throttling along nicely. There have been fewer jobs in this practice area though because firms have made use of their less-busy corporate associates to handle excess work.

As your letter implies, making a successful lateral move depends on a number of things, some of them easily quantifiable, while others are not. The primary factors used by a firm will be the trifecta of (a) quality of your work experience at your current firm, (b) your academic credentials, and (c) whether a firm considers you to be a good cultural fit. The fact that you have ties to the Bay Area will assist your search, as you will be able to demonstrate your long-term commitment to the Bay Area, a factor which firms do consider. And, in our experience, it is rarely a factor that will queer a deal. In our experience, firms frequently overlook a lack of California bar experience, provided that the candidate has excellent other credentials and is barred in another state. I hope this helps, and we look forward to talking with you soon.

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