Is Success Addictive?

Are you placing too much emphasis on professional achievement in order to derive your own self esteem. That’s a diagnosis offered in today’s WSJ (subscription req.)

While there is nothing wrong with striving for high levels of achievement (and as any parent knows, achievement is the cornerstone of self esteem), the problem arises when professional achievement becomes your principal source of self esteem. In the current economic climate, it is NOT easy to achieve professional success in the short run.  You are therefore not being fair to yourself if your self worth is being measured by the money you have in the bank right now.

If you haven’t been laid off, your workload may be slow. If you are responsible for generating work at your firm, you are probably finding it harder to generate billings (unless you happen to be involved in providing legal services that relate in some way to advising distressed companies or individuals).

In the long run, I think the current economic crisis will force more lawyers to reevaluate their priorities (e.g. why did I go to law school? what do I really want to do with my life? how can I use the added free time to improve my relationships with my friends, children, spouse and family?)

Personally, I’ve rediscovered cooking and my wife and I are eating better. I spend more time with our children, our dog gets more exercise, I’m following up with old friends more frequently and I’m taking care of little annoying car and house related projects that have been on the back burner for a long time.

It’s not that I’m not working hard (in many ways, I’m focusing more energy than ever on identifying business opportunities). But I’m trying to focus more on other parts of my life to derive self esteem.

So what are you doing to build self esteem during these challenging times? Hint: focus on areas of your life where you have more control! If you do focus on the professional, reward yourself for being successful at networking and don’t be too hard on yourself when clients are not ready to spend their legal dollars.

AmLaw100-A Work in Progress this Year

The American Lawyer generally releases the results of the AmLaw100 survey in late Spring.  This year, the publication has elected to place the data on-line as it becomes available.  Sounds like a sensible approach in an electronic world.  It is also a smart way for the editors to get firms to cough up the data more quickly (no one wants to be left off of a list).

Prepare for Change

Change is in the air.  While millions of Americans are looking with hope to the new President, Obama’s inauguration tomorrow is a great reminder that being able to adapt to change is a critical component of career success.

In the practice of law, this is particularly important because as a group, lawyers are not alway good at accepting change.  This may come in part from the fact that lawyers spend their days helping their clients to avoid risk.

But like it or not, change is coming to the legal profession and what was yesterday’s hot practice area can easily become today’s moribund practice group (think collateralized debt obligations).  What was once a highly profitable way to staff a case (e.g. placing a team of high priced associates on a large document review project) may no longer be viable in a world economy.

Adapting to change is easier said than done.  Humans are not well wired for change and as a group, lawyers are particularly bad at accepting new ways of doing things (though there are of course some exceptions).

On the other hand, if your practice group is particularly slow, it is certainly possible to change practice areas, particularly if you are looking to leave a slow practice group to join a busy practice group.  Just read the last post on this blog for more info on that subject.

Bah Humbug

Bah humbug

There is no denying it.  The legal profession is in a recession and it is unclear when the cycle of layoffs will end.    If you are like many lawyers, you are not as busy as you would like to be.  If you are one of the unlucky ones, you may have already been laid off.

In trying to provide support to those of you who are feeling the stress of this down turn, I have posted a number of items on my blog (including here and here) and my BCG colleagues have posted on this blog (including here and here).  While none of us are trying to deny the reality of the situation, we have pointed out that there are things you can do to soften the psychological blow.

I have taken my own advice to heart.  After all, a slow down in hiring is not exactly ideal for those of us in the recruiting business.  So I go to the gym, I think of how much better off I am than many other people, I reach out to friends, and I spend time with my family.

But yesterday it hit me.  Little is going to change in the next two weeks.  Although I have candidates in process, it is highly unlikely that anyone will be hired before the New Year.  In short, I had a hard time getting going yesterday.

I thought about my own advice (going to the gym, calling friends, etc.) but then I realized that there was an important piece of advice that we have all left out.  Simply put, while it is important not to dwell on the negative and while it is equally important to take action in order to avoid sinking into a depressed state, it is also important to acknowledge the negative feelings.  They are there and they won’t simply go away because we repress them.

So I thought about my predicament and lay in bed about an hour longer than usual.  Then I headed off to the gym to get my day started.  And now I am looking forward to some of the things I plan to do over the holidays that don’t involve work.  I’m sure I will have my moments in the next two weeks.  But I will not try to exorcise my feelings without acknowledging that they exist.  Keeping it all bottled up will only have negative consequences in the future.

Why Wall Street Always Blows It

A cautionary tale for anyone who lives to see the next financial bubble:
Why financial bubbles form; why they will always form; why everyone is to blame for the housing bubble (real estate brokers who encouraged individuals to buy at high prices, mortgage brokers who sold adjustable rate mortgages that would eventually reset, Alan Greenspan who kept interest rates low for too long, home buyers who bought homes they could not afford, the regulators who were asleep at the switch and Wall Street types who sold securities which were backed by risky mortgages) and how all parties acted rationally.

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.

Boutique Firms Better Positioned?

Are firms with lower overhead, cheaper billing rates and less associate leverage better equipped to weather the current downturn? That is the premise of an article in today’s NLJ. The article quotes Jose Astigarraga, chairman of a litigation boutique in Miami who says that the difference between boutiques and big law firms is basically the difference between driving a Lincoln Towncar and a Ferrari.

“When you’re in the Lincoln Towncar [a big law firm] and you go over a bump in the road, you don’t really feel it that much,” he said. “In turn, boutiques are the Ferrari. When you hit a bump, you really feel it. But you can also turn on a dime, which you can’t do in the Towncar.”

I’m not sure that the analogy is a perfect one. The lawyers in the “Towncars” are certainly feeling the bumps right now. But it is true that smaller firms can be more nimble and can adapt more quickly than large bureaucratic firms.

Financial Due Dilligence for Partners

Lateral partner candidates are starting to ask more questions before accepting an offer from a competing firm. According to Law.com:

Reed Smith partner Jack Nelson said that a couple of years ago, interviewees asked for a description of the capital requirements and a summary of the firm’s borrowing positions, including term debt. Now, candidates want to know more about leases, personal liability and the firm’s plans for capital and debt, “something that you rarely heard a couple of years ago,” he said. And they want to know that information earlier, long before an offer has been made, Nelson said. Today’s laterals seem to be using the information to weed firms out of consideration, rather than to make a final decision on a particular firm.

If you think about it, it is pretty astonishing that partners have historically made moves without doing more financial due diligence. In my mind, it is simply a case of “the shoemaker’s children having no shoes”. Simply put, an M&A lawyer would never allow a client to merge with another company without carefully reviewing that company’s financial obligations, balance sheet, cash flow statement, etc. So why would a law firm partner move a large book of business to another firm without first learning everything he or she could about the economics of the new entity?

Separating the Message from the Messenger

When times are good, law firms are less inclined to use performance reviews to terminate associates; but that was then and this is now. At BCG offices across the country, we are receiving a growing number of phone calls from associates who have been let go for performance reasons.

In prior economic downturns, I have witnessed the devastating effect that these terminations can have on a lawyer. Whether someone is a partner or an associate, being told that you don’t have what it takesto succeed at a firm is a terrible blow to the ego.

In some instances, these terminations are truly unfair and may be serving as a smoke screen for law firms who do not want to send the message that they have hit hard financial times. But in most cases, there is something to be learned from the dismissal.

The takeaway, if you are in this unfortunate position, is to listen carefully to the review. There may be something you can learn that will be helpful to you in your next position. It is hard to listen objectively when you believe you are being treated unfairly. But there may be some truths that can help you be more successful in your next job.

Income Partners to Get a Piece of the Pie?

The National Law Journal reports today that DLA Piper may be asking non-equity partners to make a capital contribution to the firm. In return says Frank Burch, DLA Joint Chief Executive Officer, they will get a limited stake in the firm’s profits.

Traditionally, non-equity partners are paid a salary and don’t get to share in the profits. This move, which is yet another sign that things are changing quickly in the legal profession, is an effort to reduce the firm’s reliance on bank financing. Keeping debt low through larger capital contributions is nothing new. There are a number of AmLaw firms that already manage themselves with this philosophy. What is new here is trying to spread the burden to a lower tier of partner. While DLA says the move is preemptive (i.e. they still enjoy relatively favorable interest terms in the credit markets) I suspect other firms will follow if credit remains tight for the next year.