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Tough Times for Law Firms, Lawyers May Be Catalyst for Positive Change
The Recorder
April 06, 2009
Every day my e-mail is filled with resumes of laid-off attorneys. My phone rings off the hook as law firm after law firm seeks help to deal with client demands for lower rates or fee deals -- that is, if the client has not gone out of business entirely. For me, stuck in the middle as a legal recruiter and HR management consultant for 30 years, it is a time of despair and delight.
I have worked through three major legal recessions, and so have a certain survivor's perspective about the current maelstrom. All this blood, guts and agony is a good thing if we use it to the profession's advantage.
Recession is catalytic to change in law firms. The downturn of the late '70s and early '80s made room for diversity as women and minorities began to be integrated into the patriarchal law firm pyramid. The recession of the early '90s led to the rapid development of niche practices like IP, and the dot.bomb of the early 2000s saw those niche practitioners behaving like fleas on a dog -- jumping from firm to firm searching for a juicier haunch to feed on. Partnership became a moveable feast.
This legal recession should result in several great leaps forward: lockstep compensation will die (at last), replaced by more dynamic models that account for productivity and contributions to the firm's long-term institutional identity. The donkey and carrot race for partnership will fade as lawyers take on flexible levels of responsibility and ownership.
Law school hiring will change. On-campus hiring will move to end of the second law school year, and look a lot more like business school recruiting. Students may opt for two-year law programs, or schools that offer stronger internship and practical training opportunities beyond academic legal training.
These long-term changes will evolve in fits and starts over the next few years. Compensation is already changing, partners are being de-equitized, and the very definition of what it means to be a partner is in flux. I am waiting for "the reverse Gunderson" -- that moment a big firm officially brings starting salaries down to $145,000. Being the first will take courage, but will forge a better compensation landscape.
It is crucial to realize the immediate effect the current downturn is having on the human part of the law system -- partners, corporate counsel, associates and law students. We cannot lose sight of how behaviors born of a climate of fear and anxiety affect our long-term plans and the benefits we hope to accrue. We need to send a message that professionalism cannot be sacrificed just to achieve a short-term fix.
Talk with recruitment directors at firms or with career services officers at schools and you will hear endless horror stories. Employees are being fired by e-mail, offers are rescinded by partners whose embarrassment and discomfort oozes across the phone, and corporate clients unceremoniously make irrational demands for billing rate cuts without concern for the consequences on the firms and people who have devoted endless effort to making their business successful.
Institutional loyalty? The current rash of firings, rescinded offers and delayed start dates are banging down the nails in that coffin. Painful choices have to be made, but every action firms take is dissected as an augury by the press, in blogs and in the back rooms of firms and schools. If we don't seize the day to institute rigorous change in the profession with foresight and intelligence, we might as well be chanting over the livers of male quails or reading tea leaves.
The current generation of young lawyers and law students is cursed not just by its lack of experience of hard times, but by an egocentricity born of good times. They just don't know how to behave, and can come across as self-centered and childish. A law student asked me for tips on how to ensure that he gets an associate offer after this summer. "It's not about you," I said, "it's about the whole team, the firm and your clients. Ask yourself every moment what your firm needs, what you can do to make them successful -- not what you can do to make yourself successful." The student's face lit up like someone had just switched the light bulb on over his head. I hope it stays lit!
Lower salaries, fewer offers and a much more competitive job market incentivize students and young associates to focus on performance and achievement. Firms often condoned shockingly bad behavior by students during summer programs, but with any luck we won't see that any more. Firms now have a chance to teach tough lessons that will make better lawyers.
When I listen to partners I get this sneaking suspicion, however, that there is a vengefulness lurking below much of this downsizing -- payback for the associate high salaries, the prima donna behavior, the blind egotism of a younger generation. May I be so bold as to remind the firms that they have enabled much of this poor performance? It will profit employers more to take time in summer programs and associate training to teach business skills and teamwork, to invest in these human resources to make them more productive long-term.
Transparency is critical. When I see a firm communicating in a poor or slipshod manner (one firm rescinded its offers to its 3L class with the hyperbole "GM has stopped making cars, so we don't have any business anymore"), that firm telegraphs its ambivalence about its actions, and likely has divisions and disagreements in its partnership. Headhunters hone in on these firms -- they promise ripe pickings.
One proactive firm is working hard to make long term changes and has been a model of planning and organized behavior through its own layoffs. Their nationwide director for recruiting and retention has a mantra for these hard times: steadfast calm, steadfast optimism and steadfast dedication to understanding your personal role in the practice of law. While other firms are teetering, this firm is growing stronger and working to embrace the changes the future offers legal practice.
If your firm is making the tough decisions, make them; take active steps to care for current and former employees. Avoid stealth layoffs, hiding behind e-mail or vague firing excuses such as "You are not a fit for the firm."
We are all in this together, firms, companies, law schools, students, folks who want to make careers in the law. Let's take advantage of this time of change and invest in all our futures. Law practice has come a long, long way since 1980, and hard times give us the chance to build an even stronger future together.
Katharine C. Patterson, of San Francisco's Patterson Davis Consulting, has specialized in recruiting and consulting services for intellectual property attorneys since 1980, working with law firms, investors and corporations. She also gives frequent pro bono speeches at law schools and at NALP on careers in IP law, and has been featured in a series of free Webcasts on IP career planning for the Practising Law Institute.
