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.

The State of the Economy

The ABA is surveying the legal community about the state of the legal profession and the state of hiring. They have asked us to help publicize the survey. Results will appear in the January issue of the ABA Journal. Click here to participate.

Who Wants Partnership Anyway?

A law firm strategy consultant at Altman Weil talks about a new generation of lawyers who are largely uninterested in partnership. At the same time that equity partnership has become less attainable at many firms, it is also considered undesirable by many associates. And attaining the brass ring is no longer a guarantee that you getto keep it. Partners need to continue to contribute to their firm’s bottom line if they want to remain in the partnership.

Ironically, though, it is partners with portable billings who have the greatest amount of mobility. This is particularly true in our current economy where demand for lateral associates is very low at the moment. (See Lateral Market is Officially Flooded).

But things can change quickly. My own personal prediction is that the second half of 2009 will be booming with litigation and demand for litigation associates.

Staying on Message

This Tuesday, Americans will go to the polls to elect the next President. While it is a little early to evaluate the overall effectiveness of the Obama campaign vs. the McCain campaign (the voters get to decide that), it is not too soon to start analyzing which tactics have worked well. Furthermore, if you listen to political pundits from both political persuasions, you will note that most agree that Obama has been much more consistent in his message and that this consistency has worked well for him tactically.

In contrast, few would say that McCain has been consistent. One week his campaign is accusing Obama of “palling around with terrorists”, the following week he is accusing Obama of being a Socialist and now, right before the election, he is focused on how Obama will raise your taxes.

Obama, on the other hand, has presented a very consistent message (i.e. that the middle class has been deeply hurt in the pocket book in the last eight years and that his administration will change some of the policies that caused this.)

The career lesson (or communication lesson) is clear. Picking a message and staying on that message is more effective than a shotgun approach. If you are looking for a job, don’t try to be all things to all employers. For example, if you are looking for a position as a litigation associate, don’t tell your audience that you are also happy to do work in their real estate or corporate practice groups. If you have two good examples of relevant work that you did in your current job, then don’t dilute your message by discussing less relevant work you did as a summer associate.

Telling stories is one effective way to sell yourself and stay on message. Find some good anecdotes which illustrate your past successes and make good use of them. Use the stories to reinforce your central message. Harrison Barnes, BCG’s CEO, just wrote an article about this. He talks about how Turkish rug merchants use stories to cultivate relationships with their prospective buyers. Follow his advice and maybe you too will have a shot at the Presidency!

Volatility?

No one likes uncertainty; but career uncertainty will be with the legal profession for the foreseeable future. There is continued volatility in the stock market and many businesses are sitting by the sidelines waiting for a sign that it is okay to proceed with deals (some are waiting for credit to become more freely available so that deals can be financed.)

Does this mean that you should be sitting by the sidelines as well? While it may be a harder time to make a lateral move, if you are thinking about a move or if you are concerned with a precipitous drop in work in your department, don’t let volatility stop you from gathering information. Don’t let uncertainty in the marketplace put you on the sidelines. Even if law firms and corporations are going to be more measured in making hiring decisions in the coming months, it is never too early to cultivate relationships.

It is easy to convince yourself that now is not a good time to look. It may not be the best time to get hired; but you may be missing good opportunities to position yourself if you simply sit out the downturn.

Furthermore, if you are a partner with a portable practice, there does not seem to be any slowdown in demand for you. If you are unhappy with your current platform, many firms will be happy to speak with you.

White Knuckles–part II

I have a hunch that my colleagues and I are going to be writing about the current financial crisis for a while. It is very unclear how the failure of major financial institutions and the federal bailout of some of these institutions will effect the legal profession.

On the one hand, law firms are likely to see a large uptick in litigation, particularly high stakes litigation. Similarly, if the current mood in Congress creates a host of new regulation for the financial services industry, law firms stand to benefit.

On the other hand, during a period of financial turmoil, businesses are more likely to stay on the sidelines rather than pursue acquisitions, even ones that were already in the pipeline. Tightening credit is likely to mean less investment in general and a general slow down in economic activity. This is turn will probably mean fewer deals for lawyers.

So what is an associate to do? Debbie Acker has already stressed the importance of taking care of yourself during times of stress. I won’t repeat her words of wisdom. But there are also things that you can do for your career in tumultuous times.

For starters, if you are finding that your work is truly slowing down, don’t sit around whining about it. Be positive and proactive. Spend more time on marketing activities. Debbie Acker mentioned staying involved in professional organizations, writing an article or meeting with colleagues. You can also spend more time learning about your clients. Take them to lunch. Invite clients to a sporting event.

Find partners who are busy and ask them how you can be helpful. Pay attention to practice areas that are busy and see if you can pick up some projects in those departments. Look for logical connections between the transactional work you have done and the litigation which is keeping other associates busy. Maybe you have specialized knowledge of the deal that is being litigated. Maybe you have already worked a lot with a particular client.

A lot of this is easier said than done. Lawyers are professional pessimists. We are paid to help clients identify risk. We are trained to think in worst case scenarios. This kind of thinking can do a lot to help a client manage potential risk. But it can be a source of paralysis for our own careers. So be aware and take action now. If you do, you will have more control over your destiny.

The Lehman Effect–According to ATL Readers

Above the Law has posted the results of a reader survey. According to the respondents (who I believe were self selecting–i.e. this is not a scientific poll), lawyers in New York seem to be the most worried about the impact of the latest round of financial institution failures. Of the New York lawyers who responded, 55% felt that the demise of Lehman and of Merrill Lynch would have a negative impact on their careers. In Boston, it was only 31% and in Dallas, it was only 20%.

Given how much legal work investment banks and other financial institutions generate in New York, these percentages seem to be a good reflection of what is likely to happen (at least in my humble opinion.) There are going to be more layoffs in New York and more transactional lawyers will find themselves shifting over to bankruptcy practice. In contrast, large firms in Boston, are driven more by technology, venture capital and private equity than they are by large financial players like Lehman or Merrill Lynch (Although the mutual fund industry is very important in Boston.) Similarly, oil and gas plays a big role in Dallas.

So get ready to retool and look for opportunities to contribute to your firm, even if it means non client work. The end still seems a long way off.

Are you Eeyore or a Realist?

Lawyers are paid to identify and manage risk. A good lawyer thinks of worst case scenarios when drafting agreements. That’s what we get paid to do. But there is a fine line between helping a client manage risk and being such a naysayer that a client is unable to accomplish his or her business goals. This is a particular occupational hazard for in-house lawyers who are often charged with making both legal and business decisions.

To an optimist, “worst-case-scenario” thinking may come across as pure negativity. To a good lawyer, it’s just a matter of thinking like a realist.

In today’s CareerJournal, there is an interesting discussion of this topic. A reader writes in about her husband who has been called to task for being too negative in his role as a finance manager. I thought it offered some good food for thought for lawyers in general on the importance of identifying risk while still being able to think outside the box.

Don’t Ask “Why”

On the eve of the Beijing Olympics, my local public radio station interviewed a sports psychologist, JoAnn Dahlkoetter, on the subject of achievement. Dahlkoetter, who won the San Francisco marathon in 1980, had numerous interesting things to say about achievement. Most of what she said has relevance to being a successful lawyer–whether you are striving to develop a high level of competence in your practice niche or trying to build your own practice through effective marketing . You can catch it on the WBUR website at your leisure.

She was particularly insightful on the subject of overcoming adversity. One strategy that she suggested struck a chord with me. She indicated that in the face of failure, don’t ask yourself “why” it happened. You can always come up with reasons to blame yourself (and being a lawyer where you are paid to identify how things that might go wrong, this is particularly true.) Instead, she suggests that after a set back, ask yourself, “what” should I do next or “how” can I get past this. I guess this is another way of saying focus on the present or on your future actions rather than dwelling. Now I just have to figure out “why” this has been hard for me in the past!