Thomas Donnelly thought he had it rough.

When he started exploring the lateral partner market in San Francisco in January, the environmental attorney was setting himself up for an arduous process: Internet research, informal chats, interviews.

"You have to nail the screening interview," he said. And for Donnelly, like most partners exploring the market, he had to do so with about five different firms.

"It's very tiring and exhausting," he said. "Plus, you're taking time away from your clients, your colleagues, your family."

It took the Heller Ehrman partner three months and a series of meetings with a handful of firms before he found his new home at Jones Day. Yet while the ordeal seemed long to him, Donnelly may have been lucky -- as the economy has worsened this year, the process has only gotten longer.

Partners and firms are vetting one another more closely in the hiring process these days, many recruiters say. Despite the extra caution, lateral activity has remained high and will likely continue, some recruiters said, thanks to opportunities created by new and recent entrants to the San Francisco Bay Area market and billing and strategic pressures. But for a partner who isn't holding a big book of business, moving may not be so easy -- and for associates it may be impossible -- as firms increasingly look only at the most productive partners.

Even as big firms pray for rainmakers, lateral-minded partners are weary of being seen as economic injections for ailing firms, recruiters said. The result: Neither side is taking anything for granted, and everyone is asking a lot more questions about a prospective firm's financial situation.

"There is no longer the assumption that law firms are inherently stable, immune from debt overload, market influences and other financial disasters," Stacy Miller Azcarate, San Francisco-based founder of legal search firm Miller Sabino & Lee, wrote in an e-mail.

Thanks to increased publication of financial figures, the lateral-minded are finding the data they need easier to come by, too.

"Every year the financial information becomes more transparent, and so the level of knowledge that lawyers have about how their firm fares compared to competitors increases every year," said Martha Klein, a senior consultant with Mlegal Consulting in the Bay Area.

The increased diligence from both sides, combined with economic uncertainty early in the year, has had a lengthening effect on the lateral process here and nationwide, said Natasha Innocenti, the managing partner of Major, Lindsey & Africa's San Francisco and Palo Alto, Calif., offices and the co-chairwoman of her firm's Northern California partner practice.

"We have seen lateral partner deals that would typically have closed in the first quarter of 2008 pushed out to the second and third quarters," she said.

GROUP ACTIVITY

While the increased diligence is slowing the hiring process, the market is still very active thanks to a growing variety of firms and clearer distinctions among them, as well as increased practice pressures, recruiters and firm partners said.

But not everyone is reaping the benefits. While firms generally continue to focus on rainmakers, newer entrants to the local market are also pursuing entire practice groups to quickly fill their expensive new offices.

"The movement is really -- it's no surprise -- from the old-line San Francisco firms to the newcomers," said Trenton Norris, who moved in March from Bingham McCutchen to head Arnold & Porter's three-year-old San Francisco office.

Silicon Valley has already seen new offices from a number of firms this year, including Alston & Bird, King & Spalding, Kirkland & Ellis, Reed Smith and Sheppard, Mullin, Richter & Hampton.

The most efficient way for such offices to grow is by adding groups, notes Jon Escher, co-founder of Solutus Legal, a Silicon Valley search firm. For example, when Alston & Bird opened in the Valley last month, it hired a group of Akin Gump Strauss Hauer & Feld attorneys, a firm that also provided Hunton & Williams with a few labor attorneys for its new San Francisco office in July.

Morrison & Foerster Chairman Keith Wetmore has noticed the increased number of groups as well. "We see them moving to other firms; we have conversations with them," he said.

And while the new firms only slightly increase the total number of firms, they can represent a big opportunity for partners looking to make a lateral move, Escher said. If even one or two are good strategic matches for a lateral partner, "that's a material improvement in the scope of choice," he said, noting that partners often only seriously consider four or five firms.

PRACTICAL DECISIONS

Another reason partners are looking to move is because their firms are de-emphasizing -- or eliminating -- their practice areas, which Norris said is an increasingly common dilemma.

"There are firms that are being more sharp-penciled," Norris said, noting ongoing pressures to bill highly. "They're thinking harder about the firm's strategy and which practice areas are important to the firm."

From the other side, clients are prodding attorneys whose firms can't provide full service.

"Clients are under pressure to consolidate their work with as few law firms as possible," and they may say, "'I'd love to give you our employment work, but your firm is too expensive,'" Norris said.

As a result, some partners lateral to continue working for their clients or to collect on the increased relationship partner credit for bringing in more work from a client.

THE FUTURE

Lateral movement usually slows down as the year wears on because undistributed profits grow and partners want to wait to cash out. But several recruiters said they expect to see more activity in the coming months.

"This year, so many firms aren't profitable, or aren't profitable enough for that to be a meaningful number, that it's changed the dynamics," said Major Lindsey's Innocenti. "It's one less factor keeping people in their own firm."

On the other hand, firms nervous about poor profits may be less willing to take on new partners until they've reported their financial information next year, said Mlegal's Klein.

"We may see fewer moves in the fourth quarter of 2008 because the firms will want to defer costs until 2009," she said.

Donnelly, for one, is glad to have found somewhere to ride out the grim economy and its effect on lateral movement. "The process," he said, "is not pleasant."