A Career Coach Says: Chicken Little Was Right
Gail E. CutterNew York Law Journal
October 31, 2008
Overwhelmed with all the advice? Turn on your computer or TV, and you're blasted with bailout blather. The economic crisis is alarming enough. How can any common sense break through this racket?
The 24/7 news cycle of doom blames the irresponsible, greedy Wall Streeters, and in the legal press, the impact on firms is deafening. With money supplies virtually frozen and the markets plummeting, deal flow has come to a halt. With the exception of refinancings, you can hear crickets chirping on some corporate floors.
Firms are circling the wagons and cutting costs, some laying off staff, extending associate start dates and even de-equitizing unprofitable partners. We have lost one august law firm, and more are sure to follow while other firms are exploding with the very deals and bankruptcy filings making the news.
Legal pundits are ready with advice for young lawyers, much of it contradictory: The sky is falling! Panic! Work harder! Don't have any work? Don't panic -- take a vacation. You can't argue with focusing on providing A-1 client service. Exceed expectations. And no whining.
Last October, I recommended preparing for the downturn: stepping up your game, improving your attitude and volunteering for unpopular assignments. Aligning yourself with those partners creating marketing groups attuned to future business and offering to help with client development projects. Writing an article on a timely topic. Using CLE programs to build your expertise or demonstrate knowledge in a new specialty.
It takes discipline to take charge of your career when so many people are freaking out. Panic won't help, but neither will maintaining the status quo while the legal world morphs all around you.
If you are an associate with a stable job, don't take it for granted. Do all you can to solidify your position in your current firm. Figure out what role your partners, department and firm will play in the new economic order.
What is the outlook for your group? Looking forward, will the firm look to diversify to middle-market clients or new industries? Expand its practice areas or focus on core specialties? Are you better off as a specialist or generalist? How can you prepare to serve the coming needs of existing and future firm clients?
Study the financial and the law firm marketplace. The boom before this bust saw dramatic changes in the pecking order. National firms took on global significance; merger activity peaked.
Another game of law firm musical chairs is coming. What will give you a competitive advantage? The goal is not just to weather the storm but to take advantage of the new opportunities that the changing market will bring.
Don't just grab a "hot" area because it's currently in vogue but find the right match for your skills, personality and interests over the long haul. Hint: Barriers to entry are higher. You must know your stuff; gushing that "bankruptcy is a great blend of litigation and transactional work" won't cut it. Whether you find stability in your own group, reinvent yourself within your firm or realize that your long-term career goals are better served elsewhere, it pays to know the market.
We've all seen this movie before. The disappearance of Washington Mutual and Wachovia, the implosion of Bear Stearns and Lehman -- it looks familiar to veterans of past booms and busts. When large institutional clients fail or merge, the client base for law firms shrinks accordingly. The list of troubled U.S. institutions is long, and banks all over the globe are being brought under sovereign control.
The past few months have seen the legal work on these massive matters concentrated in a smaller number of megafirms. Those firms that have tried to beat the megafirms at their own game face a great challenge. As the number of these institutional behemoths falls, winning their legal work grows ever more challenging.
While this drama plays out, however, global and national firms serving middle-market clients have, in many cases, managed to prosper. Some private equity funds still have cash to invest and deals to close. Other clients have focused on venture capital investments in new technology, cross-border investments and even opportunistic real estate acquisitions. Middle-market clients rely on financial leverage and the markets for credit; they are not immune to the crisis. But the economy might be rebuilt from the "bottom up" -- or the middle up. As a sign of things to come, it offers new opportunity for savvy associates.
Listen to either presidential candidate for more than two minutes, and it is clear that the age of "free-wheeling" Wall Street is over -- increased federal regulation is here. The $700 billion bailout package is just the beginning.
The complex world of derivatives is ripe for greater statutory oversight. All of the "shadowy" markets that politicians see as the playgrounds of financial pirates -- hedge funds, swaps -- are likely to be the target of congressional hearings, fiery speeches and endless subcommittee negotiations. Make way for more regulations.
Two of the last remaining private investment banks, Goldman Sachs Group Inc. and Morgan Stanley, are now bank holding companies under the supervision of the fed. They wanted more money and had to accept greater regulation in return.
Associates: Welcome to your new opportunity. If you nodded off in Sec Reg, you now have the chance to learn statutory law, not from a dusty case book but from the front lines. Seek out your firm's partners in the area. Volunteer to help research the next client white paper. You'll make yourself immediately useful and, perhaps, hitch your wagon to a new star practice area. Regardless of your next move, your marketability is enhanced.
CHANGE THE CHANNEL
In the money-centric New York market, it is easy to lose sight of the outside world. While we obsess over every market tick, engineers and scientists are transforming the future economic landscape. From biotechnology and medicine to green architecture and energy to infrastructure, telecommunications and brownfield development, game-changing breakthroughs are coming. It's a reason to be hopeful about America's ability to invent its way out of this recession -- the next iteration of the computer revolution.
Explore what's next in these fields. (Try Esquire magazine's October issue for 75 influential thinkers.) Entrepreneurs will seek capital to bring their ideas to fruition -- and transactional, IP and regulatory lawyers to advise them every step of the way. (Eventually, litigators will fight for their ideas and fortunes.) Find their firms, and you may discover a solid base of new and exciting work.
Smart lawyers also know where the action is -- Brazil, Russia, India and China. Look for firms with strong relationships in these markets. Can you name the world's largest steel maker? ArcelorMittal, an Indian company employing 310,000 people in 60 countries, whose beams are going up in New York's Freedom Tower. The owner? Lakshmi Mittal, the fourth wealthiest man in the world. If that's news to you, read up.
Successful law firms are versatile organizations, capable of adapting themselves to challenges and finding new opportunities. We're experiencing a perfect storm of economic and political forces that will change how law firms do business and put others out of business. Most will find a way to make it work -- with more insightful, responsive, cost-conscious client service and rock-solid client relationships.
Only time will tell which firms will find the client work to sustain these initiatives in new specialties and which are one-time marketing gambits. There are cross-disciplinary groups already hard at work on new client matters.
Firms find success when they identify new client needs within their wheelhouse. As an associate, your challenge is the same: Assess your professional brand and your firm relationships and seize every opportunity to enhance your skills.
Gail E. Cutter, the senior managing director of SJL Attorney Search, can be reached at gail@sjlsearch.com.