Recession thins ranks of lawyers
by Eric Young
Sunday, September 19, 2010
Big law firms used to be places where lawyers counted on steady employment, drawing a paycheck even in slow times until the economy rebounded.
The Great Recession changed that.
The top 25 largest law firms in the Bay Area shed 7 percent of their attorneys — mostly less experienced, younger associates — as they headed into 2010.
The new reality is that law firms will cut loose unprofitable lawyers. And hiring attorneys appears ready to slow down.
Overall demand for legal services is flat, so expect law firms to hire fewer law school graduates and be particularly selective when recruiting attorneys from rival firms.
Law firms think the worst is over, “but they are still very cautious,” said Carl Baier, a Bay Area legal recruiter. “They don’t want to get too far ahead (of themselves) with large-scale hiring.”
What this translates to for law firm clients is more sway over rates. Lawyers, hungry for work, are less likely to try to push through the level of billing rate hikes — 6 to 7 percent annually — that was common during the superheated economy.
But some big firms will still hire selectively.
Big firms are still hungry to lure partners with large stables of big clients and whose expertise in areas like intellectual property litigation and corporate work commands top dollar.
Even for those desirable candidates, “The appetite for very specific due diligence on a partner’s practice has increased and is coming sooner in the (recruiting) process than it ever did before,” said Natasha Innocenti, a recruiter focusing on San Francisco and Silicon Valley at Major Lindsay & Africa. “Firms are becoming more sophisticated in the business case for a lateral (hire).”
Stung by the recession, firms are slow to ramp up hiring from law schools as well.
Fewer law school recruits
Most law schools reported fewer law firm recruiters on campus last year, said the National Association for Law Placement Inc.
“That is a situation that we expect to persist,” said NALP director James Leipold. “I don’t think anyone expects recruiting volumes to pick up significantly during 2010.”
Even some partners are leery about moving, fearful they might join a firm with shaky financials.
To counter this, law firms increasingly are using financial performance as the centerpiece of their pitches to potential attorney recruits, said Avis Caravello, a San Francisco-based law firm recruiter. The central pitch “used to be brand and standing and the culture. But now the firms … tend to go right to the financial performance.”