All posts by Lateral Link

Biglaw's Pulse Beats Steadily, Doom and Gloom Notwithstanding

The stories about Biglaw over the past five years have been grim, but a closer inspection shows that despite a cacophony of daily doomsday stories from The New Republic, the Wisconsin Law Review, The Atlantic and other publications of varying quality, the future of Biglaw looks promising.

The size of modern-day, Am Law 100 firms allows them to downsize or expand as the market conditions dictate, but as a profession of perception, firms have to handle RIFs with care. Partners and clients might go next door if they doubt the capabilities of the firm. I have worked with partners before who moved simply because the perception of their firm’s stability was questioned by their clients….

 

One concern about Biglaw is whether firms are approaching critical mass. As many firms expand, they expect to keep rates constant while adding additional business to maintain bill rates. The data from the Am Law 100 paints a clear picture between firm size and efficiency. It shows that size alone is a poor indicator of law firm efficiency—if we accept that profit margin is a reasonable measure of efficiency:

Instead, leverage is a much better indicator of firm efficiency. Profit margins fall as the leverage ratio increases:

Why? Well, as the average Am Law 100 firm composition approaches 900 attorneys, what these firms are finding is that clients are regarding firms less as partners and more as service providers. Clients are balking at paying full freight for first-year associates and are trying to negotiate discounts for bulk work. Small and mid-sized law firms are seeing a rise in demand as they undercut Biglaw’s potentially four-figure rates.

Pressure from clients could eventually lead to a rise in alternative fee agreements or even more high-end temporary staffing models that utilize associates only when there is enough work to support their hours. One such company is Cadence Counsel, which seeks to make law firms more competitive to clients without compromising quality.

In ALM’s AFA report, they noted that 95% of law firms use alternative fee arrangements. 66% of firms reported that the number of AFAs increased from 2011 to 2012. Clients are increasingly trying to negotiate rate discounts, sometimes in excess of 15%, for bulk work. Some firms don’t have the profit margins to accommodate these rate discounts and could consequently cannibalize their clients (and service partners) to other firms.

The pressure from clients on firms to reduce hourly rates is hardly new, and in times of financial distress, firms sometimes relent. However, these concessions usually recede as financial normalcy returns. The question for Biglaw firms is, what will be financial normalcy?

In general, around 80% of associate hours worked are billed. That’s around two hours a day that are not being billed. As law firms push to increase their profit margins, we should see firms adopt better workflow practices and integrate cutting-edge technology.

A major drag on law firm productivity is the MS-DOS-era equipment that many firms still use. In light of the recent celebrity leak scandal, it is easy to see why law firms are hesitant to adopt cutting-edge or cloud based technology, but the tradeoff is efficiency for firms, clients, and PPP, and potentially less hours or higher compensation for associates. Either way, reducing costs and overhead is a good thing, leading to generating more money to invest elsewhere (in people or otherwise) to achieve higher ROIs.

Gross income is at its highest peak ever for the Am Law 100 (adjusted for inflation) and real growth has occurred tepidly but steadily for the last four years. From 2012 to 2013, real gross income grew by 2.57% in the Am Law 100. This was well under the mean of 6.02% but just a little over half a standard deviation from the mean (Z = -.64). Nonetheless, the growth was much improved from the 4.9% drop in the 2008/2009 fiscal year.

As the economy settles, so will Biglaw. The days of double-digit growth are likely long gone (and have been since 2002). In the future, firms will have to address the attacks against the billable hour from undercutting boutiques and irate clients, inefficiency from technological lag, and diseconomies of scale. Nonetheless, the reports of Biglaw’s death have been greatly exaggerated.

6 Factors To Consider When Planning The Path To Partnership

Ask most associates and (if they’re honest) they’ll tell you: a bird in the hand is worth two in the bush. Or a dollar today is worth three tomorrow. You’ll “never” make partner, so better to gun for prestige, compensation, a practice you love or some combination of the three, then escape into an in-house career before it’s too late.

Looking at the stats, the majority of associates, oftentimes chasing the immediate gains mentioned above, will lateral a little less than once every three years during their law firm careers, which is to say your average associate (factoring not only those who make partner but also the vast majority who don’t) will be on his or her fourth job before even being eligible to make a run. Needless to say, chances of partnership under such circumstances are an insignificant percentage of miniscule at best, which is why it is important to make only the “right” move (assuming you need to move at all). As an aid to your decision-making, we’ve compiled a list of six things to consider when planning your long-term path to partnership and any lateral moves you might make as an associate.

1) Name brand and size aren’t everything. There’s no substitute for experience. Although it is true that many law firms require a track record of business generation or associated skills and abilities, it is equally true that legal expertise must come with. Many associates plan on making partner at smaller elite firms, and it is precisely these firms that require, more than most, the expertise and experience on which the successful retention of clients and your partnership prospects are based. In this respect, size is often key: you want a firm that is sizeable enough that it has significant support staff (so that you’re not burdened with or, God forbid, relegated to paralegal work), but not so large that other associates crowd you out from getting real hands-on experience.

2) Firm prestige ≠ Practice prestige. Politics may be king. Firms differ in their structure and the distribution of power within partnership ranks. One firm may operate its practices in clearly defined silos, each of which represents its own power base and profit center, while another is more collaborative across practices, encouraging the sharing of credit and the more equal exposure of associates across practice groups to partners of influence. If you’re considering a firm using the former model: who will you be working with? When it comes time to seek support for your partnership bid, which “power centers” will be behind you? For those considering firms of the latter kind: entrepreneurialism, initiative and personal merit factor in that little bit more. Are you the necessary kind of self-starter to make life at such a firm work for you?

3) Who’s your competition? Believe it or not, answers to this question can range from “other associates” to “other partners” at your current or intended firm, and it is important not to be misled by reference to past partner promotion statistics. Has the firm recently promoted or brought in senior associates and/or counsel? If so, you may be facing some pretty hefty odds at best. Are partners at the firm barely pushing 55? Has the firm recently jettisoned its mandatory retirement policy? If so, you might be in for a longer ride than you had bargained for. Yes, partners lateral away (and often, these days). Still, do not forget that succession plans are paramount.

4) What’s their poison? The above notwithstanding, statistics are always worth a quick look. A major question to be asked is the following: from where does the firm in question tend to source its partners? From the ranks of its associates? From those of other firms? Perhaps even from outside partners and counsel? In a brief sample from 2013-2014, approximately thirty of the Am Law 200 firms filled 66% or more of their partner vacancies via lateral acquisitions.

Over the same sample period, around one in three firms lateraled in partners over 50% of the time rather than promoting partners.

Seventeen firms are lateral averse, meaning all their vacant partner spots were filled via promotions. Over the same period only two firms failed to promote any partners.

5) Don’t forecast the entire decade. In the current climate, you’ve no doubt noticed it’s difficult enough to forecast just one year—think of all the surprise mergers over the last year—never mind the next eight or ten. Firms can rise and fall quickly—Dewey, Howrey? Anyone? Instead, while you’re doing what you can to make the right friends and gain the right experience, make sure, too, that your current position offers a strong foundation and positive growth: a good platform from which to explore partnership opportunities elsewhere if necessary.

For those considering these things: danger signs of firm failure can include sharp drops in PPP, unsustainable leverage, multiple years of gross loss (if not offset by a rise in PPP) and poor profit margins.

6) What’s your endgame? When evaluating your career choices, it’s important to determine your ultimate goals. If you plan to get out of Biglaw and work in government, then choosing a prestigious firm with lobbying practices makes sense even if there are no partner vacancies. Similarly, if your goal is to transition into an in-house role, you can eschew promotional opportunities when choosing your firm. However, if your ultimate goal is to make partner: sketch a rough map of your career and always be mindful of how present actions impact the future, and take those three dollars tomorrow if you can afford it. A partnership will pay more dividends than any associate bonus ever could.

25 Things All Young Lawyers Should Know In Order To Not Screw Up Their Legal Careers

I was a paralegal before law school. I took four years between undergrad and law school, so I knew a herd of practicing lawyers when I was still applying to law school. I thought I had a leg up on everyone; I thought I had it all figured out. But in hindsight, I realize that there was a lot I did not know — not in law school and not as I made my way through seven years as an associate with a top international law firm.

Now as a legal recruiter, I see associates making the same mistakes over and over. I wish law schools would do a better job of preparing students for the practicalities of the legal industry and not just teach the substance of the law. But until they do, here is my list of key points to understand and mistakes to avoid…

Law School & Gearing Up for Practice

1. For the law students out there, first-year grades are what matter for securing a summer associate position that will hopefully lead to a more permanent associate position. But for anyone who may look to lateral to another firm or go in-house eventually (and that is most of you!), second- and third-year law school grades do count. This is especially true for litigators in today’s market. Firms and most companies will ask for your law school transcript when you apply as a lateral attorney. They even on occasion ask for grades from partner candidates. Grades have a tendency to follow you around, so finish strong.

2. Check out bar requirements in advance for any state you might want to waive into eventually. New York, for example, requires that you take the multistate portion of the bar exam at the same time as the essay portion. That means you cannot decide six months later to take only the essay portion — you will have to retake the multistate as well.

3. If you want to become a litigator, strongly consider doing a federal clerkship. This is especially important if you may want to work in a litigation boutique one day (though, of course, you can opt to do a clerkship as a break in your law firm career and not necessarily before starting). If you are a corporate associate, no one cares if you have done a clerkship.

Picking Your Law Firm

4. Law firm prestige does matter. It is certainly not the only consideration, but to lateral to another firm or move to a company, it is very important. You may get much better hands-on experience and training at a smaller firm, but prospective employers usually do not see it this way.

5. Pick practice area wisely, based on your personality:

  • You have to like what you do! Do you enjoy the substance of the work in that field of law?
  • Keep in mind lifestyle factors when picking your practice area. Some areas have a steadier and more predictable flow of work whereas others have a very unpredictable workflow.
  • Certain practice areas attract certain personalities more than others. You may not want to go into litigation, for example, if you do not deal well with aggressive personalities.

6. …Based on your academic background: Be sure you have the right background to progress in your practice area. If you have no finance or accounting background or aptitude, corporate work may not be your best option. If you do not have a hard sciences/engineering/computer science background (preferably an advanced degree), think twice about doing science-related intellectual property work.

7. …Based on geographic factors: Do U.S. lawyers do this sort of work where I want to live? For example, if you want to move to a smaller city one day, do not go into finance. On the other hand, if you want to work overseas one day, strongly consider capital markets over other practice areas.

8. …Based on market considerations: Understand the current market and think about where you see the economy heading. I would hesitate to pick a specialty that is too niche or too dependent on market conditions.

9. …Based on your future goals: Some practice areas lend themselves better to going in-house one day, to going into the government, to setting up shop as a solo practitioner, or to working out a part-time arrangement one day. To the extent you know where you want to end up five, 10, or 15 years down the road, pick carefully today. It is extremely difficult to switch practice areas once you start.

10. Understand the various structures of law firms. It may not be a crucial factor for young associates, but you should at least be aware of the differences and the pros and cons of each. For example, lockstep firms may foster more cooperation and less competition among partners but tend to have more institutional clients and may not encourage the more junior associates to learn client development skills. If you enjoy the business side of being part of a law firm and you think you will have an aptitude for client development, you may want to consider a firm with a two-tier partnership track (income partners and equity partners), where you may have a better shot at proving your worth as a business-building partner.

Law Firm Life

11. Do not trust your firm to manage your professional development. They will not. It is not that they are necessarily being shortsighted or indifferent to your well-being, but the reality is that the firm’s priorities are probably not 100% aligned with yours. Perhaps law firms should take greater care in the long-term professional development of their associates (who may be future clients). But until they do, associates must take control of their own professional trajectories, become aware of their options, and…

12. …Do not succumb to inertia. Think about next steps early and often. Whether or not you are happy where you are or looking to make a move, make every choice an affirmative choice. Do not just sit back and let your career drive itself. Take control. Take in information whenever you can. Be aware of your options.

13. Keep up on the latest firm and industry news. It is too easy to get absorbed in your immediate work and neglect the bigger picture. Stay on top of which practice areas are hot and which are not. Keep aware of how well your firm is doing.

14. Knowledge of the law is only one side of being an effective and successful lawyer. You must learn the business side of the legal industry as well. Business development is key to law firm survival. The ability to bring in clients is a key element of making partner and making a livelihood as a partner. Unfortunately, many firms fail miserably at teaching you the fundamentals of client development and encouraging this practice. So be prepared to teach yourself if need be (though keep in mind that whether or not your firm involves you in client development efforts may be a sign as to how long-term they view your employment with them).

The Lateral Market

15. Always keep your résumé up to date (and your deal sheet or representative matters sheet as well) because you never know when opportunity will knock….

16. Be conscious of your deal experience, not just your firm and practice area. If you may want to lateral to another firm eventually, you should have a number of solid years of experience in a practice area and not just a hodgepodge of experience in various areas. Keep your firm bio up-to-date and easy to decipher. As a recruiter, I have read a few lengthy bios and had no idea what that person actually does. If we cannot understand what exactly it is that you do, we are not going to call you. (The flip side, of course, is if you do want recruiters to stop calling you, revise your firm bio so it is indecipherable!)

17. Take advantage of career resources at your law school (even after graduation) and any resources (alumni affairs coordinators, etc.) at your firm. But be discreet about letting anyone at your firm know you are looking around.

18. Do not give notice at your current job before you have a new job lined up and cleared conflicts, particularly if you are lateraling in the same city. I had a candidate who gave notice at his current firm so he would have more time to interview and look for a new job and the firm where he had an interview scheduled immediately pulled the plug.

19. Understand the lateral market. The lateral market is not the same market you encountered as a summer associate applicant. Just because you were good enough to get an offer at a particular firm then does not mean that same firm or a comparable firm will hire you as a lateral. The bar is much higher now. No matter how amazing you may be, law firms will not hire you unless there is a need for your specific skills.

20. Understand that you have a shelf life. Firms are very particular about the class years they are looking to hire. At the moment, the vast majority of litigation openings are for class of 2010, 2011, and 2012. If you are even a mid-level (let alone senior) litigator, you may have a very difficult time making a move. Corporate associates are expected to have a bit more experience before lateraling. Even so, do not wait until you are a seventh or eighth year. You will have far fewer options.

21. If you are given an offer but are asked to take a drop in class year, do not look at this as a slap in the face. You would not have an offer in the first place if the firm does not see you as a potential asset. Although it means you will take a slight hit in salary in the short-term, it also means you will have more time to prove yourself before advancement decisions are made. You will be compared to other associates who are less experienced than you.

22. While prestige can be very important when choosing a first firm, do not put too much emphasis on prestige when looking to lateral to a firm where you will likely stay long-term. Often, the less prestigious the firm, the easier it will be to make counsel or partner. Consider the culture, the platform, and your advancement possibilities before prestige.

23. Be selective when it comes to the recruiter you will work with. Learn about the recruiter’s background before you commit to working with someone (and keep in mind that there is rarely a need to work with multiple recruiters). Do not let recruiters submit you to openings without your pre-approval and be sure to keep an up-to-date list of every firm/company to which you have applied. But of course…

24. Be nice to recruiters. Yes, this is a self-serving point, but it constantly amazes me how many associates are rude to recruiters and do not see them as the potential (free) resources of information they are. Even if you are not looking to make a move anytime soon, make the connection for the future. A good recruiter is an expert on the legal industry. Ask the recruiter to give you an update on the market for your practice area. Seek the recruiter’s advice on getting the right deal experience for your long-term goals or on updating your résumé. Get to know a recruiter before you are in a rush to make a move, and let the recruiter get to know you. Law firm associates are busy people, we get that. I was an associate myself so I know firsthand the pressure you are under. But there is never a good reason to be rude or unfriendly. Which leads me to…

25. Be nice to everyone. I cannot emphasize this enough. You never know when you will meet someone again and in what context. We have had candidates not get offers (and rightly so) because they were rude to the receptionist when arriving for an interview. Law firms operate on a hierarchical structure. But when it comes to how you treat other human beings, there is no place for hierarchy.

Top Ten Predictions For 2015

At the end of the year, we like to survey the legal landscape for future trends in the market. Some trends are more obvious than others — we won’t run you through the statistical gauntlet today — so we noted some bird’s-eye observations. Here are Lateral Link’s top 10 predictions for 2015 and beyond.

1. Another Am Law 100 firm’s best chance of survival is a creative combination. The unnamed firm has seen declining PPP over the last few years as it has experienced major attrition. Problems with succession planning have played a significant role in this attrition and have hindered the firm’s ability to recruit rising stars. These significant losses have led to a sizable reduction in market share for the firm, and its chance for survival likely hinges on whether or not it can find a merger partner within the next year or two. Sometimes pride from the past limits options for the future until reality causes law firm decision makers to recalibrate their perspective about their position in the market.

2. Ted Olson be the first to bill $2,000 an hour. Last year, Ted Olson’s hourly bill rates were announced through the bankruptcy representation of LightSquared. Bayer’s stock skyrocketed when it was revealed that Olson made roughly 12% of the yearly take home of a minimum wage worker in just one hour ($1,800). Olson has had a decorated career, winning some of the most important cases of the 21st century, including Gore v. Bush and Perry v. Schwarzenegger. We believe Olson, now 74, could cross the $2,000 boundary near his 80th birthday if his rates rise only with inflation (given average inflation of 2% over the last 6 years, though it is expected to be closer to 1.2% for the next year). That’s the market price to be paid when you need someone of his caliber (and really the few people at that level).

3. Another Am Law 100 firm will strike again with a major merger, creating an army of attorneys that rivals Fiji’s in size and combat competency. We are aware of several Am Law 100 firms preparing for significant combinations with others, yielding powerhouses with tendrils in every market. These creations could be the catalyst that pushes some of the top 10 Am Law firms to increase their ranks in an effort to retain their market share.

4. Firms open an office in an unconventional location. The coverage map of the Am Law 200 is not dissimilar to that of T-Mobile — unparalleled in the big cities and sparse in between. Internationally, around 94 countries are home to Am Law 200 offices (or satellite affiliates) ranging from Dentons in Rwanda to Hogan Lovells in Ulaanbaatar, Mongolia. In fact, our fearless leader in Asia, Justin Flowers, has placed candidates at regional firms in Ulaanbaatar, and luckily invoices were paid — otherwise, I can’t imagine how collections would have materialized. Many of these offices are created with a partnership with an existing firm. For example, although Dentons has around 62 international offices — more than most firms have in total — of these international offices, roughly 26 are affiliate offices (or 42%). Their domestic stateside offices consist of around 800 attorneys (roughly around the same size as Covington, King & Spalding, and Paul Hastings), which makes Dentons an ideal platform to practice domestically while having access to a deep international bench of services.

With Obama’s newly professed commitment to strengthening U.S.-Cuban ties, some Am Law firms will look into the prospect of further expanding their reach into the Caribbean, with easy access to the Yucatan Peninsula and Florida. While this new wave of “thawing” won’t take as long as Khrushchev’s, it will be at least a few years before an Am Law 200 firm opens an office on the island nation. Nonetheless, expect rampant internal discussion within Am Law firms as to the efficacy and feasibility of a Cuban office. Our money is on Littler Mendelson or Fragomen to open the first office in Cuba. Littler has a strong South and Central America practice in Costa Rica, Colombia, Dominican Republic, El Salvador, Honduras, Mexico, Panama, Peru, and Venezuela. A Cuban spinoff would not be out of the question in a few years.

5. Cravath resists the temptation to preempt Simpson’s bonus announcement next year, but Davis Polk jumps the gun and announces mid-August. Cravath and Simpson Thacher’s bonus rivalry runs deep as the two battle to set the standard for bonuses year in and out. Cravath has been the standard bearer of late, but Simpson preempted them this year, announcing their new gaudy bonuses. Soon after, Davis Polk blew away what was already deemed a generous bonus scale. Boies Schiller countered with their own Tsar Bomb that annihilated Davis Polk’s exuberant offering. Now that the some firms are no longer content to simply match the Cravath standard as in the past, the firms may hesitate to announce first, for fear of being one-upped. Irell & Manella could be the sleeper pick to set the new floor (and ironically ceiling for most) as the firm realizes unprecedented profits.

6. David Lat’s book, Supreme Ambitions (affiliate link), becomes the fastest selling novel since 50 Shades of Grey. He will use the funds to complete the construction on his full-scale replica of the Supreme courtroom. The genetically engineered Alito clone is still 3 years from full maturation, and has been replaced with a custom Alito cardboard cut-out in the interim.

7. Proskauer will continue to increase its PPP among the elite top 20 firms in New York. After recent solid lateral acquisitions, and increased profitability from major transactions and litigation, Proskauer looks poised to realize a bump in both gross revenue and PPP.

8. Philadelphia and Boston fight to become the newest member of the “Big 5″ markets. Sam Hinkie trades the number-one overall pick for 30 second-round picks and Boston wins after frustrated Philly lawyers leave en masse. Boston and Philadelphia are each poised to make the jump into the first-tier market, currently encompassed by L.A., D.C., N.Y., S.F., and Chicago. Competitive market rates in Philadelphia and Boston could convince Harvard and Boston U & C grads to stay in Boston, and may offer a reasonable alternative for New York associates battling the rising cost of living in the Big Apple.

9. Simpson Thacher escalates the arms race, offers bonuses of 190k for first-year associates, reduces base compensation to zero. With the significant increase in bonuses this year, it is unlikely that any firm will beat Boies Schiller’s gaudy bonuses unless the market continues to grow at an accelerated pace. Our past forecasts predict an increase in revenue and lateral moves for Biglaw, but whether base or bonus salary will increase proportionately is yet to be seen. Firms tend to wait for successive years of stable growth before pulling the trigger on compensation boosts, so compensation tends to lag behind real growth.

10. Lateral Link will open a new office in Latin America given client demands. As our clients continue to expand internationally, so will Lateral Link in Latin America. We predict major firms will acquire local Latin American boutiques to solidify their place in the market.

7 Stress Management Tips For Busy Biglaw Attorneys

A personal life is important to balance out the stress of long days and the forced hyper-efficiency of the billable hour. Hours have not changed much in 20 years with the typical day for a Biglaw attorney spanning from 9:30 a.m. to 8 p.m. If you factor in a forty-five minute commute for some cities—good luck getting past Market Street at 9 a.m.—and an hour to get ready in the morning, you end up with 10.5 hours of time to split between a personal life and sleep. If you can maintain your faculties on seven hours of sleep then you are finally left with a measly 3.5 hours a day of personal time—which is likely further siphoned by other responsibilities.

Law can be a tremendously rewarding career, but also at times frustrating and incredibly stressful. The evidence is stark; lawyers suffer from depression at 3.6 times the rate of the general population (and likely even higher for Biglaw attorneys), and in a study of several professions, they were the fourth likeliest to commit suicide, twice as likely to be alcoholics and three times as likely to use cocaine. Granted the last two metrics were from a 20 year old study of 1,000 lawyers; nonetheless there is little question that there is a lot of improvement to be made in ameliorating some of the negative aspects of Biglaw.

Besides reforming Biglaw altogether, there are several things associates and partners can do to manage stress within and without of the office. With New Year’s resolutions rapidly approaching, here are a few suggestions I learned from my time working in law.

1) Exercise. Who has time for it, right? But even on a busy schedule, if you can sneak in just twenty minutes at lunch you can greatly improve your mood, focus and energy levels. Even if you can’t in the middle of the day, exercising before or after work can greatly help combat anxiety by releasing serotonin and endorphins and ultimately help you fall asleep at night.

2) Sleep. Obvious, right? While obvious in theory, the epidemic of eye bags among younger associates sustained on energy drinks and the promise of spontaneously growing wings seems to worsen by the year. Some associates delay sleep at night in an attempt to reclaim some personal hours before restarting the daily cycle. Not only is this bad for your mental health, it also undermines your physical health and productivity. Less sleep often equates to more careless mistakes, which in the long run could cost you a partnership. So if you truly value the prospect of making partner one day, or even just springboarding to that highly coveted client, make sure you get as close to seven hours of sleep as you can. I would suggest eight, but let’s be honest, it’s not happening.

3) Transition Your Day. Associates often rush through the day so focused they feel as if they finished a complete marathon by the time they leave their desk. Transition your day by taking a quick minute or two to breathe evenly and reflect. It can help unburden your mind of the often massive amounts of information you have to retain every day and consequently reduce stress levels. If you’re into it, meditate.

4) Keep Work At Work. If you take lunch with your fellow associates, don’t talk about business every day. Your lunch, however brief, is your quick chance to recharge your batteries before finishing the final leg of the day. I learned this one the hard way. Same goes for home: make your home a place of relaxation from work. If you have to work extra hours on the weekend, try to do it in the office.

5) Talk. If you are stressed about something at work, do not internalize it, talk to someone about it. Just be cautious about who you talk with; unbridled venting can have serious repercussions if it bounces back to management’s ears.

6) Balanced Consumption. Succeeding in Biglaw requires the acumen equivalent of a Formula 1-outfitted Ferrari. If you fill that Ferrari with petrol that some guy sold you out of a canister for £1/liter, the car will never reach its full potential. Similarly, when you walk into work in the morning, think twice before reaching for that pastry to help give you an energy boost in the morning. In the short term it feels great, but in the long run, a bad diet can have negative repercussions on your mental and physical health.

Even more importantly, ration your caffeine consumption. If you need a boost in the morning, don’t finish the whole cup, or order a smaller size. Drink enough to cast off the spell of sleepiness but not so much that you want to ricochet off the windows.

7) Music. There’s nothing like a four-minute music break to recharge the mind. No matter what genre you like, music is shown to increase endorphin production and slow the heart rate down.

It is always important to retain perspective. The people who toil at Biglaw and become partners are there because they love it. To many lawyers, it’s not a chore to be at the office for ten hours a day. Nonetheless, 56% of Biglaw attorneys describe themselves as unsatisfied. For some, happiness exists outside of Biglaw, for others it exists at another firm. It is not ‘Dulce et decorum est pro patria mori,’ so whether you want to lateral, move in-house, or move outside of law entirely, our team of experts would be glad to help you figure out what would make you the happiest.

Lateral Link's New York Bonus

Bonus Alert!

 

Simpson announced… then at last Cravath…. but bonus season is not over yet…Lateral Link’s New York team pays a $10,000 placement bonus, awarded to successfully placed mid- and senior-level candidates moving within the New York market from one AmLaw 200 firm to another AmLaw 200 firm.

 

Lateral Link has already given out more than $1 million in placement bonuses! 

 

Reach out to your Lateral Link recruiter now and take charge of your career. But it’s not just about the placement bonus. Work with Lateral Link because:

  • we’re a team of experienced recruiters, all former practicing attorneys
  • we have exceptional client relationships so our résumés get a closer look
  • we offer access to an online job board
  • we can coordinate with our team of recruiters nationwide and overseas to assist you with relocation to a new city
  • we’ll assist you at every step of the process–from career advice to résumé review to interview prep

Register with Lateral Link now or reach out to a Lateral Link recruiter and beat the post-bonus rush to make a move.

 

Not on the market quite yet? Set up an initial chat with a recruiter to learn how you can maximize your options when the right time comes. And keep in mind Lateral Link also offers referral bonuses for successful placements in most regions.

 

50 Ways To Leave Your BigLaw Firm (And Keep Your Bonus)

Lateral moves are seasonal. Winter, spring, summer and fall, concepts largely unknown to Los Angeles inhabitants like myself, largely correlate with varying levels of associate movement within the Am Law 200. Maybe it is the frigid winters — another foreign concept — that make most lateral associates wait to move until the first month of the year.

A better explanation is that associates wait to collect their year-end bonuses before moving. Cravath often releases their bonuses first around December 20th and most firms will disburse their bonuses shortly thereafter. This year however, Simpson Thatcher jumped to pole position and released their significantly increased bonuses today.

As an associate, regardless of class year, if you plan on making a move soon after collecting your bonus, the optimal time to start looking for a lateral position is two to three months before you plan on moving. If that length seems daunting, the period is optimal for not only exploring all open jobs, but also pursuing firms without listed needs to place you at your desired firm. Furthermore, firm needs can drastically change over a period of months making what was initially a long shot, a shoo-in.That means, if you are looking to move in the beginning of January, your finger should be pressing the call app in your phone — but not too hard, you don’t want to bend it.

Another reason associates move in January is because, typically, associates are promoted in December or January of a given year. These two months account for 52.6% of all partner promotions in an average year. Partner promotions are largely handled internally, but firms and associates may also look externally for lateral and promotional opportunities. This is the consequence of varying factors: first, firms may feel that their associates within a particular practice area are not senior enough or capable enough to fill a vacant junior partner slot so they will look at associates outside their firm to fill these slots. This allows them to fill a lower leveraged position at substantially lower cost than bringing a more senior partner over laterally. Now these associates may or may not be on track for partner promotion in the future, but most are informed at the end of the year whether or not they will make partner. These two mutualistic factors partly account for why generally 54% of partner-elect associates move in January.

If you are a senior associate and you are unsure if you will make partner, it does not hurt to test the market to find your lateral value. If unprepared, the worst case scenario is that your firm no offers you, and you are left scrambling trying to lateral into a firm that has already filled open positions in January. Regardless of how confident you are in being accepted into partnership, unless the deal is in ink and bears all the necessary signatures, it is vital to have a contingency plan, especially in the make-or-break portion of your Biglaw career.

If you are thinking of a lateral move and want to move in January, there are several firms to keep in mind that are especially robust during the first month of the year compared to their overall lateral hiring. The firms with the most lateral hires in January over the last few years are: Lewis Brisbois, Greenberg Traurig, Hogan Lovells, Goodwin Procter, K&L Gates, Sidley Austin, Jones Day, Kirkland & Ellis, Akerman and Latham.

If January is too soon and you are looking to move in February, some firms that hire at an above average rate compared to their total lateral hires are: McDermott, WilmerHale, Pillsbury, Bingham, Morgan Lewis, Ogletree, Seyfarth, Paul Hastings and Perkins Coie.

Gauging your market value, whether you’re a partner-elect, a first year associate or anything in between, is a vital form of insurance in the market of Biglaw. Whether you are looking to move immediately or plan on being a ‘lifer,’ gauging your value every once in awhile can also be helpful in negotiating compensation. Lateral Link is the go-to recruiting firm for any Amlaw attorney, and my colleagues and I are happy to chat even if you have no immediate plans to lateral.

Which Biglaw Practices Did Well In The Third Quarter?

As the legal market rebounds, we are seeing an increasing demand for lateral attorneys in most practice areas. Four practices in particular stand out: real estate, corporate M&A, IP litigation, and private equity. These practices are one of the few that have increased their headcount over the least year and/or have been ahead of the pack in lateral reshufflings…

Over the last year, the number of IP attorneys in Biglaw has remained almost identical. At the close of 2013, there were 9,399 IP attorneys in the U.S. at Am Law 200 firms. As of last quarter, there were 9,425, an insignificant .2% increase. At the same time, the number of lateral moves from 2013 to 2014 have increased. This means there is a constant reshuffling of a limited high caliber candidate pool. Even with two months left in the year, the number of IP attorneys lateralling is only one fewer than last year (721 to 722).

According to Lex Machina, 2014 was a record year for ANDA suits, with 139 new cases filed in the second quarter of 2014. This is over twice as many filed as were filed two quarters earlier (67). Overall, the common generic v. branded lawsuit arena is up creating an increased demand for work in that practice. Unsurprisingly, the number of attorneys with a pharmaceutical specialty has risen in all major markets. In Los Angeles, the number of pharmaceutical attorneys is up 25%, in Washington D.C. and Chicago, it’s up nearly 15%, and in New York it’s up 11%.

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In the Bay Area, the M&A market is booming. From the past year, the pool of M&A attorneys in the Am Law 200 has grown by 14%, from 462 to 528. The practice also grew in every other major market highlighted by significant growth in Palo Alto (10%), Minneapolis (27%), Austin (11%), and D.C. (12%). Data from the IMAA corroborates this growth with increased M&A total valuation (and a similar number of mergers) from 2013 to 2014 (expected).

In our proprietary job board, we have over 800 listings for M&A positions that have been offered since January, which is over a 50% increase from the same period last year. All the data concurs in unison that M&A is a thriving practice.

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Similarly, the number of private equity attorneys in Am Law 200 firms is growing in every major market and by more than 10% in San Francisco, Philadelphia, Dallas, D.C., and Boston. New York realized a healthy bump in PE attorneys over the last year, growing from 2,076 in 2013, to 2,274 this year.

San Francisco is an interesting counterpoint to the M&A heavy Palo Alto. Google, Cisco, and other former “start ups” have matured into tech behemoths focusing on strategic M&A deals while the private equity money has been increasingly focusing on the SoMa tech market space.

The real estate market is hot again, driving demand for CMBS, RMBS, REIT capital markets, and all those ancillary services dependent on a robust real estate market. The only issue is that many former real estate attorneys re-tooled or left to go in-house, so there is a lack of experienced talent pool to fulfill demand. We have seen several clients looking to re-tool corporate attorneys into real estate attorneys given the scarcity and money left on the table by not being able to leverage up deals. Over the past year the number of real estate attorneys has significantly increased, especially in Chicago (19%), Atlanta (14%), D.C. (15%), New York (11%), and Dallas (10%). Lateral moves by real estate partners have increased 100% (with two months left in the year) from a low of 50 in 2008.

Most practices are on track to eclipse the number of lateral moves from the previous year. IP partners have already matched last year’s total and litigation, real estate and banking partners have already passed last year’s threshold.

With two months left in the year, nearly every practice is up for associate lateral moves as well, especially in corporate (13%), banking (32%), and real estate (14%).

The hardest hit practices are bankruptcy, a typically countercyclical practice (-16%), environmental (-28%), and labor & employment (-21%).

All in all, we should start looking at the market from a lateral reshuffling point of view as opposed to a lateral placement, since the average tenure for associates and partners is around 3.5 years.

Divorce Can Tragically End Your Biglaw Practice

When an Am Law 50 partner filed for divorce in 2010, she had no idea she was ending not only her marriage, but also her tenure as a Biglaw partner. The career she built on three degrees and over thirty years of hard work, ended unceremoniously as a casualty of a rancorous divorce.

What went wrong? It’s no secret that Biglaw firms scarcely differ from large corporations when it comes to employees’ personal matters. They tend to take a laissez-faire approach, unless they are pressured to protect the firm’s image or assets. The managing partner of the local office explained to her that it would be important to the firm that the partner’s productivity or the office atmosphere not be impacted by the divorce, but was otherwise unconcerned with the proceedings.

Jaffe & Clemen’s ace divorce attorney, Frisco Fayer, explicates that “[m]ost modern big firms recognize the need to support their partners and they do so whenever possible. That said, the demands placed on a divorcing partner by his or her career are not going to disappear. The partner’s clients are still going to expect the same level of service and the other partners in the firm are still going to be interested in maintaining billable hours.”

Our anonymous partner spent around fifteen hours a week after working hours and on weekends on her divorce case. Nonetheless, she contends that there was no correlation between her divorce and productivity, performance or how she interacted with her fellow partners, associates and staff.

The divorce started as amicably as one could reasonably hope for, but as distrust bubbled, the split escalated from a perfunctory proceeding into contentious brawl. Our anonymous partner stated that she took multiple steps to bring about a quick, fair and amicable resolution of the divorce to forestall unnecessary expenses, but that her spouse was not interested in resolution only conflict. She stated that her spouse incurred both legal and accounting fees each in excess of six-figures but she incurred minimal legal expenses due to her election ultimately to represent herself. The firm was supportive of her intention to represent herself so long as her time was not diverted from firm matters.

In Fayer’s experience, this is hardly extraordinary. “A non-contentious matter can be resolved for a relatively minimal amount of money if the parties are able to reach a fair deal and still trust one another. But, once the trust is lost or if the divorce becomes a tool to get even and exact revenge, the costs can quickly move from five to six or even seven figures.”

As the trust disintegrated, so did any remaining civility. As her spouse’s counsel escalated the fight, the firm became embroiled in the fray. Subpoenas were issued, alerting the firm that the partner was going through a divorce. While most fellow partners were initially sympathetic, the spouse’s lawyer petitioned the court to issue an earnings assignment order that was quashed as the court found she had paid all the spousal support on time. Nonetheless, as word of the order spread to several partners, sympathy was quickly replaced with indignation among those who took the order as an indication of a failure to comply with a court order.

Fayer explains that, “[f]irms are often served with subpoenas which demand the production of documents. If the burden on the firm is particularly onerous or if the requests are excessively invasive, we will often seek a protective order from the Court to limit the demands placed on the firm.”

The Am Law 50 firm did issue a protective order, but this did not curtail the steady stream of calls, subpoenas and orders from the spouse.

Eventually, the acrimony manifested as a surprise visit by the partner’s estranged son to the law firm. Slipping through security, the son made his way to the office and started screaming at the partner in full view of all the partners, paralegals, clients and assistants. He eventually left and the partner was pulled aside by the managing partner of the firm’s local office and the HR manager and told that should that happen again, she would be let go. On the positive side, the firm revised their security policy to prevent future breaches.

In a rare move, the partner was eventually let go despite having a formidable practice. She went from a cushy $600,000+ a year compensation to losing clients and countless hours of her life in a three-year divorce that ended right as she began to approach the mandatory retirement age. Without a book of business, she was left with few options but to start anew as a sole practitioner.

Our anonymous partner is but one of many Biglaw lawyers who have gone through a divorce. Some estimates peg the rate of divorce for the general population around 30% and for lawyers in general around 11%, despite the popular claim that 50% of marriages end in divorce. The research on divorce rates for Biglaw partners is virtually nonexistent, but it wouldn’t be surprising to find that the rate is higher given the amount of pressure placed on them.

By treating divorce as a non-issue, firms are likely losing productivity as attorneys go through a time consuming ordeal that can consume firm resources. By recognizing divorce as endemic and not singularly spontaneous, firms could better equip themselves with dedicated attorneys to assist in divorces and other personal matters rather than assigning busy attorneys and thereby losing billable hours.

According to Fayer, who started his legal career as an associate at Gibson, Dunn & Crutcher, “[d]ivorces are hard and the cost can’t be measured in dollars alone; there is an inevitable cost to the psyche. That said, I’ve never had a client who regretted getting divorced. And, the emotional difficulties can be tempered by taking care of oneself with the usual prescription of sleep, diet, and a little sunshine. Of course, most Biglaw partners were already under huge pressures even before the divorce proceeding, which is why it’s particularly important to find the right divorce lawyer who can shoulder as much of that burden as possible.”

Much To Gain And Little To Lose From Using The Right Recruiter (Part 2)

In Part 1 of this series, I introduced three lawyers — Alpha, Beta, and Gamma — to help explain the value that a partner candidate can gain from working with the right recruiter. Each candidate was relatively junior, each had in the high six figures in business, and each had decided to leave his or her current firm for the right opportunity. When last we left our intrepid trio, I had used no-name profiles at appropriate firms to obtain interviews for each of them.

While I kept in close contact with each candidate throughout the process (see Anatomy of a Lateral Move for an overview of the steps commonly involved), each candidate had unique issues that required particular attention…

For example, Alpha needed help with his business plan in order to make his candidacy more attractive to his targeted firms, a common issue candidates face. At some point after a firm requests more information based on a no-name profile, and usually before wanting the candidate to fill out a Lateral Partner Questionnaire (“LPQ”), many firms want to see a business plan. This is a key sales document that frequently determines whether a candidate with a lower book than the firm usually considers acceptable is allowed to continue in the intake process. The key here is not to repeat your résumé or reiterate an academic description of your practice area, but to demonstrate your worth in concrete and specific terms to the firm.

In Alpha’s case, I was able to strengthen his business plan by emphasizing that his current client had said they would give him additional matters if he had more rate flexibility than his current firm would allow, and thus there was a very good chance Alpha would be able to grow revenues from that client by providing additional services. It is also critical to differentiate yourself from the countless other lawyers that the firm may be considering by explaining why you are uniquely qualified to help clients with current or future legal problems. For someone coming out of government, this differentiation might come from knowing what new regulatory or enforcement initiatives are coming down the pike, what the government will be looking for, and why you are one of the few people on the planet who understands the issues and can counsel clients on how to navigate these dangerous waters. Most important, however, is to list particular individuals at potential clients that you could now reach out to if you had the resources of the new platform. Alpha and I went through at least five drafts of a business plan before sending it off with his résumé, and I think it was critical in landing the three interviews he had. A good recruiter keeps their finger on the market’s pulse and can help augment an attorney’s pitch with information they may never have realized was pertinent.

With Beta, the fit with the two interviewing firms was clear and she didn’t need to prepare a plan. Instead, the issue was how best to fill out the LPQ. While the business plan is a sales document, filling out the LPQ is more like responding to a discovery request with some wiggle room. The most important sections of the LPQ are your history of revenue production and your estimate of best, probable, and worst-case revenue numbers at the new firm.

Two common problems are how to determine what revenue is attributable to you beyond your own billing attorney numbers, and how aggressive to be in your estimates. Lawyers tend to be either unrealistically optimistic or unrealistically pessimistic. When unrealistically optimistic, partners lose credibility, especially if the estimates for future revenue are significantly higher than historical averages (i.e., “hockey stick” projections). When unrealistically pessimistic, partners are less likely to be hired (and if they are, their comp is penalized). With Beta, it took several iterations to attain the Goldilocks solution of “just right”.

Gamma presented another dilemma. Lawyers seeking a lateral move are subject to a variety of ethical obligations with respect to their clients and their current firms. Rather than counsel potential laterals on such matters, especially after an offer has been extended, and risk liability, some hiring firms affirmatively state that they want nothing to do with the lateral’s transition until he or she has been formally hired. In this case, the hiring firm told Gamma to look to me to provide such guidance. Gamma and I had several telephone conversations and email exchanges on what he should and shouldn’t do with respect to notifying his firm, notifying clients, and soliciting other members of his firm to join him.

At the end of the day, despite our best efforts, Alpha did not receive an offer from any of the three firms, which cited the comp demands and the problem of the single client as the reasons they passed. Alpha now knows what his market value is and is not, that his current firm isn’t treating him so badly, and that if he wants to move, he will need to increase his book and diversify his client base.

Beta, on the other hand, received and accepted an offer that was 40% above what she had been making. When she told her current firm that she was leaving, however, the firm recognized the errors of its ways, counter-offered with a guaranteed 65% increase and the commitment of the firm to build up her practice area in her current office (one of the main reasons she decided to look). The firm that made the original offer couldn’t match the terms and she is still at the same firm, but in a far better position than she otherwise would have been. I should stress that candidates should not go into the process thinking that their current firm will react in a similar fashion. In general, candidates that have accepted counters are gone in a year anyway since the trust going both ways has been irreparably breached; Beta’s situation proved to be the exception to the rule (so far).

Gamma received several offers and accepted one that elevated him to partner from his previous counsel title and increased his comp by 20%. His current firm countered with a matching offer but Gamma told them that he had given his word and it was time to move on.

During the dinners I had with each following the completion of the process, they all expressed their gratitude for my efforts and said they were materially better off than they had been before we started. Thus, I respectfully suggest that if you are seriously interested in exploring other opportunities there is much to gain with little downside working with the right recruiter.