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No, partners will not be voting associates off the island of Manhattan any time soon. But the shaky conditions on Wall Street promise challenges in the months ahead, and no New York lawyer can claim immunity. The cycles of the economy and the resulting ripples through the legal market are inevitable; what comes up, must come down. And the triple threat of the dot-com demise, associate salary explosions and faltering financial markets portend a bumpy ride in the months ahead for law firms and lawyers. Those who lived through the last cycle of boom and bust in the legal market may be feeling a distinct sense of d�j� vu. The overheated market for J.D.s in the late 1980s sent firms into a recruiting and retention frenzy. Newly formed associate development committees rolled out training and mentoring programs, special bonuses and other perks — anything to staunch the bleeding of associates from large law firms. Associates took advantage of the robust job market, and they were on the move — to investment banks, boutiques, other law firms, and in-house jobs. A great deal of effort and ink was expended to analyze and understand the sources of lawyer dissatisfaction and to satisfy the insatiable demand for legal talent. Then came October 1987; the market took a dive and associate development initiatives took a back seat. The earnest efforts of law firms to address associate woes and do a better job of “keeping the keepers” largely disintegrated during the recession of the early 1990s. Firm belt-tightening, in the form of layoffs, reduction in support staff and resources, and other austerity measures, resulted in low morale, a paucity of midlevel associates to train the next generation, and a legacy of mistrust. If the lessons of the 1990s have taught us anything, however, it is the danger of reactive rather than proactive management, and the price of short-term thinking. Whether you are running a major law firm or just trying to manage your own budding legal career, heed some advice on weathering the coming storm, whether it is the Storm of the Century or just a few showers. THE STAKES ARE HIGHER The status quo that law firms and associates have come to expect over the past six years has in fact amounted to record-breaking performance across the board. Whether the indicator is number and value of deals, associate hours, salaries, lateral hires, mergers, bonuses or summer program size, the end of the 20th century made history. The technological, financial and political conditions that combined to create this boom are unlikely to align again. Law firm managers are left with the challenge of bringing expectations back down to earth, while making revenue and staffing projections under a cloud of uncertainty. Managing the business of a law firm in a state of perpetual change has always been a challenge. Last year’s salary increases have upped the ante considerably. The break-even point for associates is now so high that anything short of an off-the-charts boom compromises the law firm profit equation. The notion that any first-year lawyer can merit a six-figure salary is dubious at best. Worse, this absurdly high standard puts great pressure on junior associates to “earn it,” and on partners not to resent their young charges. Effective training and mentoring of junior associates can hardly take place in an atmosphere of unrealistic expectations or lingering resentment. Those associates in the junior ranks today are, of course, the unwitting beneficiaries — or victims — of market forces they played no part in creating. Real lawyering skills take just as long to develop as they always have, and the partners of today certainly started out with their share of beginner’s mistakes and shortfalls. Imagine the trepidation every novice associate feels, exacerbated by the inflated expectations of partners fed by bloated associate salaries. EVALUATING TOO EARLY Should the legal market suffer a significant downturn, firm managers will be under great pressure to cut costs. Partners may be called upon to cull the ranks — even to draw conclusions about the future abilities of their most junior associates at the very dawn of their careers. With less time and training invested in very junior associates, the decisions may seem easier — less of a violation of accumulated loyalty and goodwill. On the contrary, a firm’s willingness to pass judgment on a novice attorney before he could reasonably demonstrate his potential will strike most observers as fundamentally unfair. The repercussions of these “premature evaluations” can be grave, both for the law firm and the associate. As we saw in the early 1990s, the “spin” that firms put on associate departures significantly impacts the effect on both parties. At that time, associate layoffs were rarely attributed publicly to economic factors. Firm press pointed to “strong, steady growth” and “no loss in business,” with associate cuts invariably “performance based” — just the natural result of the annual associate evaluation process. At the most, a few firms admitted to holding associates to a “slightly higher standard” in light of business conditions. Even when the cuts became epidemic, firm management clung to the fiction that, at base, the associates, and not the economy, were at fault. Those messages are beginning to trickle out again as firms make larger than expected associate cuts. If the market is moving again into this danger zone, is there anything that associates can do to protect themselves? And what should the firms be considering? Below are some thoughts for both sides. IF YOU ARE AN ASSOCIATE The Best Defense Is a Good Offense. In an uncertain legal market, no associate can afford to be passive, complacent or lazy about his or her own career development. The stakes are indeed higher, and in order to survive and thrive in this environment, you must be solid in all areas: quality of work; attitude; relations with staff, colleagues, partners and clients; willingness to work hard and performance under pressure; judgment, problem-solving skills, and flexibility. In recruiting jargon, you must be regarded throughout your firm as a “keeper.” This is not a truism — top talent is always in demand, in good times and bad. There always is room for a smart, positive, hard-working associate who inspires confidence in clients and colleagues. While associates sometimes criticize law firms for their paternalism, junior associates are often equally na�ve in their reliance on law firm leadership to guide and protect their careers. Savvy associates realize that law firm success demands a balance of selfless teamwork and calculated self-interest. To stand out in a class of smart and distinguished associates, you must understand what skills and qualities are valued at the firm, align your efforts with the firm’s current priorities, and exceed expectations in the quality and quantity of your work. Not a zero-sum game, your fine reputation should not come at the detriment of fellow associates. The collective good of the firm and its clients is the overarching priority. Law Firm Econ 101. Associates should understand that running a law firm, even in a boom economy, is a prodigious balancing act. Providing scores of associates with a steady stream of interesting work from willing, deep-pocketed clients in a skittish economy is a Herculean feat. Never begrudge the partners their profits. Their periodic checks, unlike yours, are never guaranteed. They are, to a certain extent, playing Lotto every quarter, expending enormous energy and angst with no sure pay-off. And to achieve these positions replete with risk-taking and rainmaking, they have sacrificed and suffered for years in ways a junior associate cannot even begin to imagine. Partners must part with precious funds to dole out your princely salaries each month. What services can possibly be rendered by an inexperienced, entry-level worker bee to warrant a $2,500 weekly paycheck? You aren’t being paid for your impressive substantive know-how or hard-earned business acumen and insight (not yet), but for your availability. Junior associates are, in a sense, highly paid, on-call detectives. Not the glamorous and exciting version on “Law & Order” or “NYPD Blue,” but the real deal, investigators consumed with minute detail, doggedly chasing hundreds of cold leads in a dance of drudgery, interrupted by moments of sheer terror. Make no mistake, you must be extraordinarily bright and highly educated, even to proofread a document or sift through boxes of corporate governance files. If you want to earn more responsibility, embrace even those seemingly menial chores. They may not appear to take full advantage of your costly J.D., but in fact they do. Like beginner bomb detonators or first-time brain surgeons, there is no room for error. A mistake could be disastrous. On the TV series “Ed,” the likable lead character loses his cushy New York law firm job when he omits one comma, costing the client $1 million. It could happen. Watch the Bottom Line. There is no magic to law firm economics; the successful firm manages to attract and retain clients with timely, high-quality and fairly-priced legal services, while keeping expenses to a reasonable level. Even the most junior associate should be sensitive to the needs and expectations of the clients. Although you may not yet enjoy a great deal of “face time” with the client, you are an inexorable part of the client satisfaction equation. As a $2,500-per-week on-call detective occupying top-dollar office space, you are, in fact, a pretty big part of the equation. And whether your daily expenses constitute firm overhead or are passed along to the client, they add up. When you are working hard, you may feel entitled to a $25 hamburger (sorry, steak frites), three $5 double espressos and a town car home. In fact, you may be surprised to learn that other hard-working New Yorkers pay for their own food, coffee and commute home every day, on a much lower salary, even if they work past 8 p.m. Rather than regarding the expense guidelines as a license to indulge, spend as though the change was coming out of your own pocket. Better yet, spend as though it were your job to explain the bill to the client, line by line, and to convince that client to give you more business. Top law firms pride themselves on treating their associates well, and no one wants to appear parsimonious, haggling over nickels when working on billion dollar deals. Those nickels add up, though, and can result in increased financial worries that can ultimately hit associates where it hurts. Associates can do their part by making every effort to be efficient, cost-conscious and respectful of the bottom line. Do this now, before your firm needs to send a memo curtailing summer lunch budgets. Better yet, offer to forego another $40 lunch at Lespinasse. Public interest organizations are feeling the pinch of higher associate salaries in fewer pro bono hours. Suggest that summer associates buy their own lunch for a week or two, and ask that the savings be donated for a public interest scholarship or given to a soup kitchen. No Time to Waste. Time on your hands? Associates whose work is not filling the 9 a.m. to 7 p.m. hours should take it upon themselves to use the time wisely. (Leisurely newspaper reading and e-mail conversations about your low billables do not count.) If you are idle, surely you are already caught up on all of your professional reading, both general legal market news and within your practice area. Your CLE requirements are fulfilled, and you have already attended every Practising Law Institute conference and bar association meeting relevant to your work. If so, plenty of opportunities exist to get busy at the firm. Seek out a partner with whom you’d like to work and ask to help write an article or draft a speech she is due to present. Offer to do some undesirable and long-avoided project. Whether it is neglected post-closing follow-up, a 50-state survey on an oft-cited topic, or a form file or training binder for your department, you will add to your own education and make life easier for everyone when the market heats up again. Volunteer to help with the summer program (substance, not lunches) or recruiting: speak on a panel, contact student leaders from your journal, or write a letter to 2Ls at your law school explaining why you chose the firm you did. The aim here is not to pad your time sheets with dubious projects, but to find out what needs doing and do it. Your willingness and ability to pitch in on the unglamorous work will earn you the respect of your partners, and, hopefully, a crack at interesting assignments down the road. It is simple to “pay your dues” when your firm is overflowing with work — you just show up. In slower times, proving your worth takes more planning and effort. It is not enough to say, “But I did just what was asked of me … .” Still more time on your hands? Watch your back and plan for the next step, whether it comes next year or next week. Write a five-year plan for your career development, focusing on what skills you need to build and how to establish and enhance your professional reputation. Include concrete steps you can take every week to further your goals. And don’t forget the obvious: join your college and law school alumni associations and get involved planning an upcoming reunion or conference. Reconnect with professors and classmates. Put your Palm Pilot in order. The more you plan and prepare for career change, the less you are likely to be caught off guard by factors beyond your control. No Whine With That Cheese. With more time on their hands and more to worry about, associates can fall into the trap of engaging in firm “doom and gloom” gossip. Avoid being grist for the rumor mill, but don’t feed it, either. In uncertain times, you are best advised to work hard and assiduously avoid participating in speculation about the state or fate of the firm or your colleagues. Look for positive ways to contribute to the firm, its workload, operation and morale. Don’t appear to be unhappy or publicly griping about conditions; having a “whine” with your cheese at the firm cocktail party can paint you as part of the problem. Loyalty and professionalism during difficult times really is noted and rewarded. SOME ADVICE FOR THE FIRMS If you’re on the firm side of this equation, the best thing to do is: hope for the best, and plan for the work. Summer Program Worries Can Become Opportunities. The law firm summer associate program is often one of the first casualties of a slowing market, even though the purpose of these programs is to identify promising talent for the entering class two years hence. For those firms that have found their summer 2001 programs larger than anticipated, genuine concern may be brewing on both sides: Will there be adequate work to keep the summer associates busy? Will permanent offers be harder to come by at summer’s end? Clarity and communication will determine the success of your summer program, regardless of what the market brings. Summer associates can and should be expected to understand the impact of business conditions on firm operations. Learning how legal staffing is adjusted to accommodate client needs (e.g., moving corporate lawyers to business reorganization and bankruptcy matters) is a useful lesson and underscores the need for associates to be flexible and supportive of firm goals. While it would, of course, be inappropriate to share detailed law firm financial information, providing a forum for firm leaders to discuss business issues and address legitimate associate concerns will foster a spirit of teamwork and community. Bring junior associates and summers together for these events; summer associates will look to your communication with junior associates to gauge their future treatment at the firm. Defining clear expectations and standards for the quality and quantity of summer associate work product goes far in allaying fears and establishing a sense of fairness and accountability. Summer program administrators should make every effort to enforce a highly structured, centralized and regular system for reviewing summer associate work product. Adhere strictly to your requirements for prompt completion of evaluations, and ensure that every summer associate receives a meaningful midsummer evaluation before the Fourth of July holiday. Of course, the methods and systems you use to allocate, manage and evaluate summer associate assignments should mirror those in place for junior associate work. Summer associates will be watching carefully to see the orientation, training and support your associates in the Class of 2000 are receiving; their experience is the firm’s most powerful recruiting tool. The Class of 2000 can feel more a part of the firm if they are actively engaged in summer associate training. If your junior and midlevel associates do in fact have a bit more time on their hands, provide incentives for them to spend the time working with summer associates. Encourage them to think back to their own summer projects as they provide feedback and informal training for the summer associates. (A much more useful expenditure of time than long summer associate lunches.) Before the summer begins, enlist a few senior associates with strong teaching skills to conduct training for associates on project management and mentoring. All attorneys can benefit from discussions on providing candid and constructive feedback — summer associates routinely list lack of feedback as the greatest source of frustration in a summer program, whether or not they receive offers. Summer Offers Leave Long-Lasting Impressions. Your summer program has many purposes, only one of which is the identification of talented junior associates who “fit” in your firm’s culture and practice. Summer programs also serve as a powerful marketing tool to showcase your firm’s approach to training, communication and management to the legal market at large. While many students fortuitously find this fit with their 2L summer employer, some are not so accurate on the first attempt. Having chosen a firm where the “right fit” is lacking, most law students in this situation will readily acknowledge the disconnect and apply themselves in the 3L recruiting season to finding a better match. After the 2L summer, students have a much clearer sense of their own interests and abilities and a more realistic sense of the demands of firm life. Third-year students turn to their law school classmates and friends at other schools to identify law firms better suited to them. Firms should not underestimate the importance of 3L hiring, even in a slower market where summer programs are geared to satisfy all entry-level recruiting needs. A badly handled “no-offer” situation, even if the candidate is legitimately a poor fit for the firm, can scuttle on-campus recruiting for several hiring cycles. Law students and recent graduates communicate their impressions and experiences with candor. The advent of online message boards provides a whole new meaning to “word of mouth” as rumor, innuendo and the occasional fact are transmitted to thousands in an instant. Even a student not returning to your firm can nonetheless be a source of positive feedback if your dealings have been honest and fair. Summer program managers should be extremely careful in communicating “no offer” decisions to summer associates. While this advice would seem obvious, well-meaning firms can wreak havoc with poorly managed no-offer situations. Law school career counselors annually share these all-too-common anecdotes: the firm that communicates the bad news to a student only by letter, weeks after an uneventful exit interview; the firm that withholds the no-offer decision until after the student’s on-campus interviewing opportunities have passed; the firm that refuses to provide concrete examples of inadequate performance, and then makes a professional reference impossible for the student to obtain. One easy and invaluable step in handling these difficult situations is to reach out to the career services director at the student’s law school. The career counselor can help the student to process the decision and to take positive steps in the continuing job search. Career services professionals can also provide advice on managing the situation in light of the firm’s recruiting goals, and, most importantly, contribute ideas to avoid problems or miscommunication in the future. Through educating students to facilitate the right fit between student and firm, and ensuring that students are properly prepared to succeed in the summer program, career services professionals can be a valuable participant in the recruiting process. Many law schools continue to provide career counseling services and support to alumni long after graduation. With the associate’s permission, his or her advice and support can also be sought in matters involving associate evaluations and employment decisions. Work Allocation. When business slows, disparities in workload can be especially pronounced and meaningful. Inadvertently, some junior associates can be overlooked in the distribution of major deals or cases, causing them to be out of the loop for future assignments. Since work, and with it training and mentoring, is so often allocated based upon a junior associate’s “word of mouth” reputation, offering every first-year associate a variety of projects and supervisors is essential. With the escalation of associate salaries, there is no doubt that the “honeymoon” period a first-year associate enjoys has been cut short. Associates certainly feel the pressure to deliver, both in quality and in quantity, as soon as they arrive at the firm. A carefully monitored work allocation system gives every junior associate the opportunity to demonstrate skill and diligence so that unfair conclusions are not drawn based upon lower hours or less substantive work. If you plan to “raise the bar” on associate standards, communicate this message loud and clear. Clarify your expectations and develop measurable core competencies based on the input and experience of your best associates. Provide all associates with the chance to discuss the standards with their supervisors and other associates, and be sure they understand how the standards will be measured and applied. Most importantly, ensure that all associates are given the same opportunity to demonstrate their abilities, both in the length of time and the quantity and quality of their assignments. Penny Wise … A popular target in tight financial times is any associate initiative that seems superfluous to bottom-line results or provides benefits that are difficult to quantify. Lawyer training, mentoring, associate development and pro bono programs all come under fire in a poor market. Eliminating a well-paid associate development expert or a time-intensive training program run by an outside consultant may seem like an easy route to shave expenses. Now is not the time to eliminate training and mentoring programs — you need them more than ever. These programs will reap benefits in good will and improved morale, sure. But even more important, a well-designed program to guide and track lawyer training creates an environment of clear expectation and fair decision-making. If you lay a fertile foundation for learning, associates will take full advantage of methods to monitor their own performance and take greater responsibility for their own fortune at the firm. Further, the more democratic and widely available your training and development initiatives are, the more likely associates will recognize and embrace the evaluation process that gauges their progress. In an atmosphere where the mission is clearly communicated and associates understand what skills and performance are valued, even difficult discussions with associates who are not measuring up are eased. Based upon well-defined standards instead of politics or favoritism, even a negative evaluation provides an opportunity for learning. When Separation Is the Answer. The fairness and decency displayed by a firm’s leadership in terminating associates speaks volumes about the firm’s culture and values. In an article entitled “Do Law Firms Play Fair?”, New York Law Journal, March 9, 1992, at S-1 (special recruitment section), noted law firm consultant Carol Kanarek observes that “no other policy … provides a more revealing glimpse into the “soul” of a law firm … than its treatment of those lawyers who are being asked to leave.” The elimination of one junior associate might provide a short-term $140,000 gain, but it can also cost the firm many times that amount. The damage can include both tangible and intangible effects, including lost productivity, work inefficiencies, reduced client goodwill and lost recruiting opportunities at the associate’s law school. It is far more honorable, and strategically more wise, to acknowledge that a hiring decision is being made for economic reasons than to unfairly paint the associate with an overly harsh evaluation. The market will improve and your hiring statistics will naturally spring back. The impact an unexpected termination can have on a very junior lawyer, both in terms of confidence and professional development, can be great. And this associate will inevitably face you across a negotiation table or courtroom one day — he may even wind up as your client. The civility, decency and honesty we show each other during difficult times is the true measure of our professionalism and our profession. Gail E. Cutter, a former large-firm associate, is the director of career counseling and placement at New York University School of Law.

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