Reproduced with permission from BNA's Corporate Counsel Weekly, 27 CCW 24 (Jan. 18, 2012). Copyright 2012 by The Bureau of National Affairs, Inc. (800-372-1033) http://www.bna.com
Editor's Note: BCG Attorney Search is a national legal recruiting finn that exclusively places partners and associates at premier national and international law firms. Robyn Ginsberg, Esq., is a managing director at BCG Attorney Search and focuses her recruiting efforts in the Washington, D.C., New York, Boston, and other East Coast markets. She recently answered questions from Bloomberg BNA concerning the current state of the legal job market relating to law firm hiring.
Bloomberg BNA: From a national perspective, what trends do you see in the current job market for attorneys seeking law firm positions?
Ginsberg: Generally speaking, law firms have been very hesitant to pull the trigger on hiring throughout 2011 and early 2012 and, for the most part, are making offers only after fully screening candidates of interest. Law firms of all sizes are continuing to interview candidates throughout the country; however, the interview process is resulting in far fewer offers. Iaw firms want more assurances than in years past that a prospective candidate is the right fit for the firm's needs. Additionally, firms are conducting more thorough reference checks than in prior years.
There are also a number of recent economic trends in the law firm job market. For example, law firms continue to move away from "lockstep" salaries and even some large, national law firms are much more interested in knowing what a prospective candidate's current salary is. Similarly, firms are more likely to ask candidates to take a "step down" in class year and/or salary before making an official offer. The bottom line is that the job market is incredibly competitive across practice areas and geographic regions right now, with firms continuing to limit hiring to an "as needed" basis.
[T]he job market is incredibly competitive across practice areas and geographic regions right now.
For recent law school graduates, the trends are similar to those for 2010 and 2011. Jobs are scarce for those just coming out of law school, with the best jobs going to those graduating from top 20 law schools with consistently good grades. By contrast, many recent graduates from second- and third-tier law schools, and those who didn't fare as well at first-tier law schools, are still looking for jobs or accepting dismally low-paying positions at firms that are not an ideal fit for their interests.
Bloomberg BNA: Do you find that certain geographic areas offer more law firm job opportunities?
Ginsberg: While there is some level of hiring in most geographic areas, the majority of law firm job opportunities can be found in larger metropolitan areas because they are home to a greater number of national and larger regional law firms and because they boast a more substantial and wealthier client base. Examples include New York, Chicago, Los Angeles, Washington, D.C., Boston, and the Silicon Valley.
Bloomberg BNA: What practice areas have been "hot" in recent months?
Ginsberg: Though this answer would depend on the geographic region, certain practice areas have been "hot" in just about every part of the country during the last few months. These practice areas include commercial litigation, IP litigation and prosecution (with an emphasis on patent prosecution and litigation openings for those with a computer science or electrical engineering background), and certain transactional practices, including capital markets, private equity, M&A, and finance. New York, Boston, and Chicago continue to show steady demand for commercial real estate attorneys, as well as those with a real estate/finance background. In Texas, transactional energy law is a consistently hot practice area. To a lesser extent, and generally only in our larger U.S. markets, we have seen some increased demand for attorneys with venture capital and investment fund experience. We are also seeing a consistent but moderate demand across the country for labor and employment, ERlSAjexecutive compensation, and health care attorneys.
Bloomberg BNA: Are mid-sized firms doing more hiring now than larger firms?
Ginsberg: We have indeed noticed increased hiring at both mid-sized and regional law firms throughout the country. While such firms are not necessarily outpacing larger firms with respect to hiring trends, they do appear to be holding pace with the larger firms. Increased hiring by mid- sized and regional law firms is, in part, due to sound business practices and innovative business strategies exercised by these firms in response to the economic downturn. For example, some mid-sized and regional firms have: implemented practice area-specific business development teams/programs; moved away from lockstep salaries towards a merit- based compensation structure; worked to attain a close to zero debt structure; focused on attorney retention programs; and encouraged Fortune 100 and Fortune 500 companies to utilize their services at a lower rate structure than those offered by larger firms. Additionally, we've noticed that some forward thinking mid-sized and regional firms are entering into joint venture agreements with larger firms (often at the behest of clients), and are thereby being provided with additional workflow while helping clients to stay within their tighter legal budgets. Finally, and perhaps most importantly, mid-sized and regional firms are continuing to successfully and strategically "poach" top talent from larger law firms. This has helped to attract both top-level clients (all too happy to get the same "big firm" talent at a lower price point) and top-level associates.
Bloomberg BNA: How much activity is there now in terms of law firms rescinding offers to new associates, decreasing associates' salaries, or laying off lawyers?
Ginsberg: This is one area of the legal sector that seems to be showing some signs of improvement. K- though law firms continue to make fewer offers (at the summer associate, entry, and lateral levels), firms are generally not rescinding offers once made. We've noticed throughout the country that some firms intend to increase salaries in 2012, although not at the level prior to the economic downturn, while most firms are holding steady at current salaries. Rather than decreasing salaries, firms in need of additional capital continue to engage in stealth layoffs, although this appears to be occurring much less frequently than past years and is generally frowned upon. While there is no consensus on whether these layoffs are performance-based or economically- motivated, the fact that they are occurring at all class levels indicates this to be a new norm in the law firm sector. Prior to the economic downturn, many firms allowed even non- performing associates to stay on with the firm until they reached their "up or out" year. Now, it seems that most law firms have essentially adopted a zero-tolerance policy when it comes to attorneys not being able to meet their billable quotas or hit their performance goals. It remains to be seen whether this is a policy that's here to stay or simply an effective way to quietly "thin the ranks" in a struggling economy.
Mid-sized and regional firms are continuing to successfully and strategically "poach" top talent from larger law firms.
Bloomberg BNA: For those attorneys who have been laid off, to what extent does a period of unemployment really hurt their chances of securing their next job?
Ginsberg: Obviously, those attorneys who have been laid off for performance-based reasons will have a much more difficult time finding subsequent employment. It's true that some law firms still won't look at laid-off associates, but these firms are few in number. For those attorneys who have experienced economic layoffs, the ability to secure another job largely depends on how the layoff is handled on the attorney's resume and in the interview context. Those who fare the best are the ones who are honest about the circumstances resulting in the layoff and include with their submission a comprehensive list of references who can attest to the attorney's work performance and corroborate that the layoff was indeed economically-motivated.
Laid-off attorneys seem to be most successful at securing good new jobs when they stay focused on their areas of expertise and do not panic. While many of them can get another job if they spam law firms (i.e., the "throw everything out there and see what sticks" method), this approach is typically not successful and, even when it is, the end result is usually one of regret. Rather than jumping on the first position that pops up, or taking on contract attorney/document review work, previously laid-off candidates do far better when they give themselves a definitive block of time (for example, six to nine months) to focus on securing a job that has good long-term prospects and that comports with their practice area expertise and overall career interests. Additionally, practice area is relevant to the calculus. Laid-off attorneys who have developed niche practice area expertise (e.g., patent prosecution, executive compensation, energy regulatory work) will most likely secure new jobs more quicidy than those who have a more wide-ranging practice base (e.g., general or commercial litigators or general corporate attorneys).
Bloomberg BNA: How much does where lawyers obtained their law degrees affect their job prospects? For example, how much emphasis do law firms place on U.S. News & World Report rankings?
Ginsberg: Law school rankings continue to significantly impact job prospects, at the summer associate, entry, and lateral level. While there has been some media discussion over the last couple of years regarding possible unfairness or inaccuracies in law school rankings, law firms nevertheless continue to rely on these rankings when it comes to hiring.
Many top national law firms will only look at candidates graduating from the top 20 or 25 law schools, focusing on those graduating at the top of their class and with law review or moot court experience. Even those firms willing to look at candidates from other law schools-which, thankfully, include many law firms- still want candidates with top grades, clerkship experience, and law review and/or moot court experience. Those graduating from second- and third- tier law schools are continuing to have a tremendously difficult time obtaining permanent legal jobs in the current economic climate.
Bloomberg BNA: What advice do you have for law students who will be graduating in 2012?
Ginsberg: For those graduating in 2012, it is too late to tell them to focus on getting top grades. Instead, these candidates need to focus on building a resume that will result in long-term opportunities and obtaining the best possible legal job they can secure for themselves in this market. More specifically, prospective graduates should consider the reputation and prestige of prospective employers, mentorship and training opportunities, associate development programs, and the quality and quantity of the work that will be available. Employers with sound finances and a consistent workflow are especially desirable. Ideally, candidates want to end up at a place where they can comfortably see themselves for at least the next two to three years.
The lateral job market is consistently at its best for associates with three to five years of experience.
Bloomberg BNA: How has the number of law school graduates changed in recent years?
Ginsberg: Available statistics consistently indicate that the number of law school applicants decreased in 2011. Indicators suggest that many of the people who, in previous years, would have attended law school as a means to delay entering a recession- era job market, have decided to forego the law school avenue. This is largely a result of the exorbitant debt accrued by law school graduates in combination with the media reports regarding the dearth of jobs available for recent law school graduates. Presumably, law school enrollment will increase again once the economy starts showing more consistent indicators of recovery, but we don't expect this to happen prior to the upcoming presidential election at the end of this year.
Bloomberg BNA: Is the job market better for junior associates or senior associates who are looking to make a lateral transfer to another firm?
Ginsberg: The lateral job market is consistently at its best for associates with three to five years of experience, as these attorneys generally have enough training and experience to be able to hit the ground running at a new firm. More junior-level associates (one to two years of experience) will be in demand less consistently, with demand only increasing during economic boom years.
Attorneys with more senior-level experience consistently have a more difficult time making a lateral move, unless they have a portable book of business or very specific and in- demand practice area expertise. While in past years, law firms were interested in bringing on senior-level attorneys with top experience and credentials to "service" other partners or firm practice areas, that trend has changed. We don't expect to see increased demand for senior-level attorneys until the economy more substantially improves. We have seen some recent demand, however, for senior level IP practitioners (litigation and prosecution), especially for attorneys with a technical graduate or undergraduate degree. There also appears to be a slight resurgence in law firm interest in litigators with some area of niche expertise, such as FCPA, electronic discovery, or class action experience.
For those firm attorneys who have not yet reached the senior-associate level, we recommend making a lateral move between your third and fifth years, as firms find attorneys most marketable during that time.
Bloomberg BNA: To what extent has law firm hiring been diminished because in-house legal departments have reduced the amount of work on which they seek outside legal assistance?
Ginsberg: In-house legal departments have continued to keep their costs down by outsourcing less of their legal work to outside counsel. Law firms have responded to this change in a number of interesting and effective ways. For example, law firms recognize that they need to offer friendlier or more flexible rate structures to their clients. Firms have also gone out of their way to acquire the legal expertise demanded by their clients, so that they can most effectively and efficiently service their client needs. Firms are now, more than ever, focused on providing the highest quality work product to their clients as they cannot afford to lose them.
Notably, in response to changing client needs, we have seen many smaller firms, including regional law firms, stepping up to compete for this work by offering equivalent expertise at lower rates. These smaller firms can also tout the fact that their associates and partners often have more broad-ranging expertise, since matters are more leanly staffed and attorneys are expected to work on a more diverse set of matters. Interestingly, we are seeing some response to this by larger law firms. For example, multiple law firms in Boston, Washington, D.C., and New York have recently started seeking corporate attorneys with expertise in multiple practice areas, such as M&A, private equity, and venture capital. We believe that larger firms are doing this both to compete with mid-sized and regional firms for client work and because clients are demanding this as a more efficient way to have their matters serviced (i.e., the same group of attorneys can service a larger portion of the client's work, saving both time and money required to get other lawyers up to speed).
We expect the 2012 job market to closely resemble the 2011 market, with firms continuing to grow and hire on an "as needed" basis.
Bloomberg BNA: Have law firms increased their use of contract attorneys and perhaps expanded the scope of their job responsibilities by having them do more substantive legal work in addition to document review?
Ginsberg: Yes. Law firms have increased their use of contract and staff attorneys in recent years in order to avoid adding additional associates and to service client matters at a friendlier price point. Additionally, some firms have added "career associate" positions. Career associate positions fall somewhere between staff attorney and associate positions and offer no progression prospects.
Law firms who make use of contract and staff attorneys have indeed begun to utilize these attorneys for a wider array of substantive legal work, including legal research, deposition preparation, motions drafting, and trial preparation. Some firms have started seeking staff attorneys with specific skill sets or practice area expertise. Furthermore, more firms are hiring staff or contract attorneys to service discreet practice areas, rather than the entire firm-again, with the belief that by developing practice area expertise among staff attorneys, firms can more affordably and efficiently service client needs.
Bloomberg BNA: In general, do you see the job market for lawyers im provin or becoming more difficult in 2012 as compared to 2011?
Ginsberg: We expect the 2012 job market to closely resemble the 2011 market, with firms continuing to grow and hire on a calculated and "as needed" basis. We do not expect to see firms adding to their ranks in any wholesale fashion and anticipate that firms will continue to be as meticulous and careful about their hiring practices as they have been in recent years.
While there have been some indications that the job market will show greater signs of recovery in 2012, there has also been speculation that many of the 2011 year-end economic indicators that were favorable were merely the result of temporary factors. Of course, the upcoming presidential election in November also adds an element of uncertainty to the current economic climate. We are hopeful that the last quarter of 2012 will show a post-election uptick in the economy and that, as a result, the legal market will begin showing signs of improvement in late 2012 and carrying into 2013.
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