Pick Your Practice Area Wisely

As we are riding the roller-coaster ride that is the US economy, it seems to be a great time to revisit practice areas selection for associates. There are two types of practice areas – those that thrive in “up” markets and those that thrive in “down” markets. Right now, the market is as down as it can be.

Who’s busy?
Bankruptcy
Litigation (slightly busy, and we are expecting more hours out of you litigation associates this year)

Who’s not busy?
M&A
Capital Markets/Finance
Real Estate

There are certain practices that are able to exist in both “up” and “down” markets:
Tax and other specialty practices
Intellectual Property

Why? Tax supports many of a firm’s practice areas and, thus, has a slight “internal hedge” against a down market. Intellectual property involves different types of work as well. Even though IP transactional work has slowed to a crawl, patent prosecution and IP litigation are still rolling along.

My advice? When selecting a practice area in your early career, know whether or not your practice is an up or down market practice. It will allow you to plan to ride the roller-coaster more enjoyably – e.g. if you chose to become a bankruptcy associate in a top firm, expect that you will be slammed when all of your attorney friends are slow and on the hunt for work.

Stay the Course

I received one piece of useful advice last week which is applicable (and appropriate) not only to the financial markets but also to your job: “Stay the course.” Sitting across the desk from my financial consultant last Thursday, I was reminded again and again to “stay the course,” not dump my stocks, and trust that my 2006/2007 planning would pay off and be able to ride out 2008 without too much damage. It is hard to be patient when your 401K is tanking, but it is worse to panic and make hasty changes in order to satisfy your need to “do something.”

The same can be said about your job. Many associates, partners and counsel are facing layoffs or fear of layoffs as the year comes to a close, and there is a natural need (especially amongst lawyers) to “do something.” Don’t. If you have spent the past few years working hard, networking, pitching in, taking on new work, and operating at a high level of performance, stay the course. Continue to do the same. Trust that your reputation, which you have spent the last few years building, will protect you through the rough times at your firm. When rumors of layoffs are around, people sometimes panic and otherwise high performers can freeze in fear. Some will stop attending networking dinners; others will generally stop performing at their best because they become distracted by the market. It’s very much a deer in the headlights reaction. Don’t pick this approach. Likewise, be careful not to pick an approach which makes you appear panicked Instead, do your best to take note of what is going on in the marketplace, and then continue forward with confidence. Not only will this propel you through the bad times, it will likely propel others who interact with you — peers and clients.

A large part of what is going on in the marketplace is out of your control. Thus, if you have structured your career over the years in such a way that you currently maintain a strong reputation in your group, stay the course. There is some value in continuity. Keep moving forward with the faith that your “life plan” (like your financial plan) — if well structured over the last few years — will carry you through this rough patch.

Is Your Paycheck Making You Nervous?

IP Law 360 examined why we are seeing more layoffs in law firms recently, in an article titled “Lawyers Fear Layoffs” and published on Friday, May 30th (subscription required). When I was interviewed, I suggested that lawyers should be aware of the link between high associate salaries and the probability that more law firms will announce layoffs in the wake of a market compensation increase. I personally feel that the last so-called salary wars in early 2007 were so aggressive that a scaling back in personnel isn’t surprising, although it is certainly unfortunate.

Others in the article said that recent layoffs can be linked only to the lack of demand for legal services in particular practice areas. There is no denying the impact of the credit crisis on the market at large and law firms specifically. Do you think that associates’ increased salaries play any part in the current belt-tightening environment?