Tag Archives: Am Law

The Cost of Law Firm Associate Turnover

A client recently asked me an interesting question. 

“How much should we counteroffer an associate who has given notice?”

Many factors may play into that calculation. Some are specific to the particular associate. For example, how good is this associate’s work product? Other considerations are broader. Assume the firm makes a strong counteroffer for this associate. Will that set a precedent that encourages other associates to go out and get offers from rival firms?

But the core factor should be how much money the firm will lose if the associate leaves. Losses from lost billable hours, investments in the associate, and potentially turning away work. Add in the lost time spent recruiting and hiring on their own and a firm will face a larger cost than expected.

Lost billable hours loom largest

The most significant cost to a firm when an associate departs is lost billable hours. First are the hours lost from the departing associate. Practice groups run both lean and at full (if not above) capacity. And rarely do remaining associates have capacity to pick up hours without sacrifice. The result is a mixture of revenue loss and unhappy burned out associates.

Second are the less obvious loss of billable hours spent replacing the associate. Hours of billable time recruiting and interviewing candidates by partners and associates alike. Reviewing resumes. Conducting interviews. Taking candidates to lunch. Assessing conflicts checks. Training the replacement associate. The list never ends. Hours lost that could otherwise have brought in a new client or billed a current one.

How much does an associate departure cost?

The answer to this question depends on the seniority of the associate and how busy the group is at the time. Losing a key senior associate working a full plate that can’t easily transfer is the worst-case scenario. Losing a junior associate with spare hours will not be as costly.

A 2017 NALP Update on Associate Attrition pegged the cost of replacing an associate between $200,000 and $500,000. That may sound like a lot but a back-of-the-envelope calculation shows that it doesn’t take much to reach $200,000.

Let’s assume that on an annualized basis the firm is collecting on 1600 of the associate’s billed hours, at an average rate of $750/hour. That generates annualized incremental gross revenue of $1.2 million. Also assume the associate’s compensation and benefits cost the firm a total of $400,000. If none of the associate’s hours transfer to others and the position was vacant for a year, the firm would lose $800,000. It only takes three months to hit $200,000 in lost profits. Next add lost revenue from partners and associates hiring instead of billing. Plus a potential signing bonus in a tight hiring market for certain practices. The NALP range not only becomes plausible, but likely.

Mitigating lost revenue

So, how much to counter offer? The answer is variable, but a strict cost benefit analysis shows it can be a lot. But what about the hidden downstream cost? Will an effective counteroffer incentivize other associates to seek out their own counteroffers? Will the associate leave in a year anyways? If the answer is not an emphatic ‘no’ it may actually be more cost effective to replace them. That’s where a firm working with a trusted recruiter can bring the cost down substantially. A firm may take four months or more to replace an associate—let alone bring the new hire up to speed. If a recruiter has the trust and backing of the firm, and fills the vacancy in two months, that’s a great deal for the firm. Increasing fees offered to recruiters reflects this basic economic calculus. Associate turnover is a part of life at law firms. A knee jerk decision to throw money at a departing associate may be the wrong move. Instead, firms should carefully and rationally weigh their options to determine the least costly path forward.

Female Representation in Biglaw Partnerships — A Long Way to Go

Disproportionate attrition of female attorneys in Biglaw is hardly a new problem. As a 2019 ABA and ALM report on the issue noted, “entering associate classes have been comprised of approximately 45% women for several decades.” Indeed, at 5 of the top 20 Am Law firms (by gross revenue), female lawyers now constitute a majority of associates:

Firm% of Female Associates
Baker McKenzie53.4%
Norton Rose Fulbright53.0%
Morgan Lewis50.8%
Hogan Lovells50.1%
Jones Day50.1%

But when it comes to partnerships, representation of women is substantially lower. Among those top 20 Am Law firms, here are the four with the greatest proportion of female partners:

Firm% of Female Partners
Ropes & Gray31.8%
Morgan Lewis28.8%
Baker McKenzie27.9%
Jones Day27.3%

Ropes & Gray is the standout performer, as the only top 20 firm with greater than 30% female representation in its partnership. Interestingly, unlike the other firms in this table, Ropes & Gray does not rank especially highly for female associate representation: only 44.8% of the firm’s associates are women.

And here are the four with the lowest female representation in the partnership:

Firm% of Female Partners
Gibson Dunn20.9%
White & Case20.8%
Simpson Thacher20.2%
Davis Polk17.9%

Gibson Dunn is an interesting case in that the firm last year elected its first-ever female Chair, Barbara Becker. Gibson Dunn’s announcement of the appointment emphasized diversity and inclusion, noting that Ms. Becker created the firmwide Diversity Committee. It will be interesting to see if Ms. Becker succeeds in boosting the firm’s female partner representation above the current below-average level.

Any way you cut it, Biglaw certainly has a long way to go. Should that be cause for despair? Not necessarily. The good news is that firms are well aware of the problem and at least some of them are making a strong push to fix it, even if progress is slower than we would wish.

How to increase female representation — and retain female partners

There are a number of ways that law firms are pushing to increase female representation in their partnerships. Flexibility is a key theme. Many female Biglaw attorneys are working mothers with other schedules to meet outside of work. A one-size-fits-all approach to hours expectations (including office presence, billable hours, and business development targets) can disproportionately drive away women. We speak to many high-powered female attorneys who feel compelled to leave the law firm grind because they also want to raise a family, and they have concluded that it is impossible to succeed at both. When law firms incorporate more women- and family-friendly policies firmwide (not just for partners!) it paves the way for female associates to first rise to the equity partnership and then succeed there — both inside and outside the office.

Increasing female representation in partnerships is not enough. Law firms must also offer a solid support structure so as to not leave women high and dry once they attain equity status. Providing adequate and equitable associate and administrative support goes a long way in retaining female partners and promoting their longevity. In addition, establishing vibrant Women’s Initiatives with strong leadership and defined budgets is one way to support female partnership (and all female attorneys).  And don’t forget the men — they need to be involved!  Male participation in Women’s Initiatives is crucial in demonstrating that the entire firm stands behind a diverse partnership and supports female advancement.  

Pitfalls to keep in mind

Law firms should be careful not to simply promote women to non-equity partner status and assume that’s good enough. Not all partnership roles are created equal. These days, so many firms have deviated from the one-tier structure of partnership, such that non-equity partnership often amounts to what used to be called Counsel. When there are several tiers of partnership, it creates additional obstacles to attaining the ultimate goal of equity.

Law firm leadership should also be aware that non-billable requirements often disproportionately take women away from billable work as compared to their male counterparts. For example, for some reason female attorneys are especially likely to participate on committees. Women’s Initiatives and other firm programs are important, but they present a Catch-22 that must be acknowledged and monitored. Firms should be careful not to unfairly assign a disproportionate amount of non-billable tasks to female partners or just assume they will take on an extra load. This is something we often hear our female candidates complain about, and it is an easy fix once the problem has been identified. But firm leadership must first be cognizant of the pattern.

A Detailed Breakdown Of The 2022 Am Law 100 Rankings

So how did Biglaw do in 2021, coming off its shockingly strong performance in 2020? In short: better. A lot better. Based on the financial metrics reported this week in the latest edition of the Am Law 100, the recent round of Biglaw salary increases makes perfect sense. Sure, most firms achieved record gross revenue, revenue per lawyer, and profits per equity partner. But that’s true in a typical good year. What made 2021 such a blowout is that many firms dramatically accelerated their growth rates on those metrics as compared to 2020 — a year that was itself hailed as a stunning success. Any way you look at it, 2021 was truly a year to remember for the Biglaw elite.

Collectively, here’s what the Am Law 100 achieved in 2021 (as noted by Patrick Smith in his summary of the data):

  • Total revenue: $127.4 billion, up by 14.8%. 
  • Average revenue per lawyer: $1.18 million, up by 12.5%.
  • Profits per equity partner: $2.66 million, up by 19.4%.

To appreciate just how good those growth rates are, let’s compare them to the strong growth of 2020 and the more typical rates in 2019:

Part of the impressive profit growth can be explained by attorneys working harder. Based on data from the 61 firms that submitted billing figures to the American Lawyer, hours billed rose 5.7% relative to 2020. Meanwhile, headcount in the Am Law 100 was up just 2.1%. As we at Lateral Link can attest, firms were eager to add talent in 2021, but growing the ranks was a challenge in the face of intense competition.

Let’s now take a closer look at the three key metrics — gross revenue, revenue per lawyer, and profits per partner — and the top 10 firms in each category.

Gross Revenue

Here are the top 10 firms in the 2022 Am Law 100 rankings, ranked by their gross revenue in 2021. You can access the full list here.

Kirkland & Ellis and Latham & Watkins once again led the pack, not only maintaining their #1 and #2 slots but also increasing revenue at faster rates than the other top 10 firms. The composition of the top group was fairly stable, with Ropes & Gray riding a 22% growth rate into the top 10 and Jones Day falling out of it, despite increasing revenue by 10%.

Revenue growth was strong across the board, with every Am Law 100 firm enjoying an increase (as compared to 26 firms that suffered revenue declines in 2020). Remarkably, 63 firms increased revenue by at least 10% and 18 were up by at least 20%.

Revenue Per Lawyer

Here are the top 10 firms in the 2022 Am Law 100 rankings based on revenue per lawyer. You can access the full list here.

Seven of the top ten firms increased revenue per lawyer by double digits (as compared to four in 2020). Once again, Wachtell and Sullivan & Cromwell took the top two spots. Davis Polk cooled somewhat after its market-leading 22% RPL growth in 2020. Cravath impressed with its rise from from #10 to #3 (mirroring the jump that Davis Polk achieved in 2020). Quinn Emanuel and Paul, Weiss ascended into the top 10, displacing Cahill Gordon and Debevoise.

Profits Per Equity Partner

And finally, everyone’s favorite ranking: the top 10 firms by profits per equity partner. You can access the full list here.

As always, Wachtell tops the list, this year exceeding $8 million in PPEP for the first time. Kirkland and Davis Polk each cracked the $7 million mark. Sullivan & Cromwell leapfrogged Paul, Weiss and Simpson Thacher to claim the #4 slot. Broadly speaking, the top 10 was fairly stable: the only firm to drop out was Debevoise, which grew PPEP by 10% but was no match for Latham’s 26% growth.

Overall, 14 firms now have profits per equity partner above $5 million (compared to six in 2020). Consistent with the long-running “rich get richer” theme in Biglaw, PPEP growth was strongest at the top of the Am Law 100. Whereas the top quartile increased PPEP by 22.7%, the bottom quartile of the Am Law 100 managed only a 7.7% increase. Still, no matter where their firm stood in the rankings, most Am Law 100 partners would be hard pressed to complain about 2021.

Diversity in Biglaw: Same Old Rhetoric or Reason for Optimism?

Diversity and inclusion are top of mind for law firm marketing departments these days. For Biglaw firms, expressing a commitment to boosting diversity in the profession is expected. But when it comes to executing on that commitment, the results have been uneven.

How are firms doing on diversity?

In a recent episode of Movers, Shakers & Rainmakers, hosts Zach Sandberg and David Lat reviewed the landscape. Citing data from Leopard Solutions, David noted that in 2021, 17% of lawyers in top 200 firms were ethnically diverse, a percentage that was unchanged from 2020. However, at the partnership level the representation of minority lawyers grew from 10% to 11%. As David pointed out, that increase is significant in percentage terms, representing 10% year-over-year growth. But at the same time, it is still far from representative of the broader U.S. population.

Some firms are doing considerably better than most. The ALM Intelligence 2021 Diversity Scorecard lists White & Case as featuring 21.9% minority partners, making it the only AmLaw 50 partnership with greater than 20% ethnically diverse representation. On the other hand, some of the most prestigious and financially secure Biglaw firms are notable laggards: minority representation in the Wachtell and Sullivan & Cromwell partnerships stands at 8.9% and 9%, respectively.

Is there reason for optimism?

As we discussed on the podcast, it’s easy to be cynical about calls for increased diversity in the legal profession. Every year discussion of the problem grows more prominent, but the rate of actual change has been glacial. Nevertheless, we point to the Mansfield Rule as one cause for optimism. Modeled after the National Football League’s Rooney Rule, which requires teams to interview diverse candidates as part of the head coach hiring process, the Mansfield Rule “measures whether law firms have affirmatively considered at least 30 percent women, lawyers of color, LGBTQ+ lawyers, and lawyers with disabilities for leadership and governance roles, equity partner promotions, formal client pitch opportunities, and senior lateral positions.” Firms that commit to that standard can become Mansfield Certified.

As David noted, an advantage of the Mansfield approach is that it ensures diverse candidates gain interview opportunities without establishing a quota for hiring decisions. That should make it palatable even to some firm leaders who may be skeptical of more aggressive campaigns to increase diversity. Indeed, the number of participating major law firms has grown to exceed 100.

Even so, it is notable how many top firms have not yet chosen to participate. Let’s take Gibson Dunn as a case study. The firm’s diversity performance is mediocre — not the worst in its peer group, but not exactly cause for celebration. Gibson’s partnership features 12.1% minority representation (as reported in the 2021 Diversity Scorecard). For comparison, fellow California-headquartered firm Wilson Sonsini is at 19.2%. Interestingly, Wilson Sonsini is Mansfield Certified, whereas Gibson is not.

Who should take responsibility for increasing diversity?

On another recent Movers, Shakers & Rainmakers episode, guest Monique Burt Williams, CEO of Cadence Counsel, addressed the growing number of law firms and companies hiring Chief Diversity Officers. Creating a position exclusively focused on diversity and inclusion can be an important positive step, but it carries risk that senior management will delegate the whole problem to the new hire. As Monique likes to say, “your Chief Diversity Officer should be your CEO.” In other words, unless law firm leaders are personally committed and engaged in efforts to make meaningful progress, we cannot expect a substantial increase in representation of diverse lawyers in Biglaw. The challenge is too important to be delegated.

How to Get on a Recruiter’s Naughty List (and Why it Matters)

When you’ve been in the recruiting business as long as we have, you notice some behavioral patterns. Some of those patterns are a little, let’s say, irritating. As a public service to the legal recruiting industry, we thought we’d put together a list of what not to do as a law firm or candidate engaging with recruiters.

Assuming you are not yourself a recruiter, why should you care about this? (Other than not wanting to be a terrible person!) Whether you are a law firm leader or a potential lateral candidate, it turns out that treating recruiters respectfully has real benefits for you.

From the firm perspective, it’s important to understand that recruiters don’t prioritize firms equally. Our job is to move lawyers from one firm to another. The reality is that if we aren’t making placements with your firm, we’re looking to move your people to firms that work constructively with us. So from a talent retention perspective, it helps to have a solid relationship with the recruiting community. How recruiters perceive your firm also has an effect on your broader reputation in the market. When we are placing at your firm, we talk to hundreds of candidates, encouraging them to consider joining you. This is a marketing function — it builds a positive perception in the industry. Naturally, being on the recruiter naughty list will have the opposite effect.

From a candidate perspective, there is a good chance you’ll be back on the market at some point in the future — or at least that you’ll be open to considering an especially great opportunity. Having a relationship with a recruiter you trust is beneficial both for learning what’s happening in the market generally and for getting early notice of specific opportunities. Burning your recruiter bridges squanders those potential benefits.

So with that in mind, here’s what you shouldn’t do:

  1. Refusing to pay: After hiring a candidate, the firm claims it knew of the candidate before the recruiter introduced her, and therefore it doesn’t owe a fee. This tends not to be mentioned until the end of the process, after the recruiter has already shepherded the candidate through.
  2. Dragging it out: The firm gives the same search to multiple recruiters in succession, without hiring anyone, causing the search to be stale by the time we’re asked to drum up candidates.
  3. Cutting us out: The candidate learns of an opportunity from a recruiter, then reaches out to the firm directly or via a friend who works there.
  4. Gaming the clock: After the recruiter submits a candidate, the firm waits exactly six months (when its obligation to pay a fee expires), then reaches out directly to the candidate.
  5. Below-market fee caps: The firm expresses interest in working with a recruiter but insists on paying only half the market rate.
  6. Window shopping: The firm takes a meeting with any candidate the recruiter submits, but it never hires any of them.
  7. Feigned interest: The candidate uses the recruiter to get a competing offer, with the goal of building leverage against their current firm to gain a promotion, a higher salary, or enhanced remote-work flexibility.
  8. Setting false criteria: The candidate declares they won’t move unless it’s for X amount of money. The recruiter convinces the firm to increase its offer by a six-figure sum, exceeding the candidate’s threshold. The candidate still rejects the offer.
  9. Inconsistent feedback: The firm rejects a candidate as too junior, days after hiring a candidate of the same seniority level.
  10. Radio silence: The firm provides zero feedback on a seemingly strong candidate.
  11. Unrealistic expectations: The firm is exceedingly picky about candidate credentials, despite offering nowhere near market compensation.
  12. Confidentiality fails: After the recruiter submits a candidate on a confidential basis, the firm carelessly asks around about the candidate, causing the news to get back to the candidate’s current firm.
  13. Late conflict discovery: Disregarding the best practice of conducting early conflicts checks, the firm discovers an insurmountable conflict near the end of the process.
  14. Hiding the ball: The candidate fails to tell the recruiter about competing interviews or offers, causing the recruiter not to press the firm to speed up its process, and causing the candidate to miss out on what could have been an offer.
  15. Ghosting: Candidates, this one is pretty self-explanatory. Whether in the dating market or the job market, ghosting people is a bad look!

Lateral Interviews: Advice from Seasoned Interviewers

With the end-of-year bonus season upon us and a lateral hiring market that remains exceptionally strong, it’s a safe bet that many law firm associates will soon be preparing for lateral interviews. What can you do to maximize your chance of a successful interview?

To get some pointers, I spoke with Mike Blankenship, managing partner of Winston & Strawn’s Houston office, and Randall Clark, corporate and securities partner in Gunderson Dettmer’s New York office. Both have extensive experience with lateral hiring and were happy to offer their advice.

  1. Be prepared to talk about your representative matters.

The biggest difference between on-campus and lateral interviews is that, as a lateral candidate, you’ll be expected to actually know some law! But before your imposter syndrome intensifies, rest assured that technical questions are almost never asked. The way partners assess your skillset is by probing your resume and, most importantly, your representative matters. “The deal sheet gets more attention from us than the resume,” says Randall, so you must be prepared to discuss any of your listed matters. Take time to reacquaint yourself with the basics of each matter and prepare some talking points about your specific contributions.

  • Assemble an effective deal sheet or representative matters list.

There are three dimensions to bear in mind when preparing a deal sheet: format, substance, and length.

  • Format: Most partners prefer deal sheets organized by type of transaction, not chronologically. Use this to your advantage by placing your most impressive deals at the top of each category.
  • Substance: Include enough detail to convey the essence of the deal. For example, instead of writing “client,” write “a national supplier of widgets.” Emphasize aspects that align with the interviewing firm’s practice strengths. Additionally, indicate your scope of responsibility. This can be as simple as describing your overall role (e.g., “lead associate”) or as detailed as listing your primary contributions.
  • Length: Don’t let the term “representative matters” fool you—it’s important to go beyond a small sampling of matters and submit a deal sheet that reflects a high volume of work. The ideal number of matters will vary by firm, practice, and class year, but it’s generally a good idea to consider including all of your matters, even those in which you played a smaller role.
  • Look professional.

Yes, the world is changing, Goldman Sachs no longer requires a suit and tie, but despite this trend, it’s better to play it safe for law firm interviews. “Most law firm hirers still expect professional attire because their clients still expect professional attire,” says Mike.

  • Do sufficient background research and prepare informed questions.  

“While we’re all large law firms, there are distinguishing factors, areas where a firm is great at something,” Mike observes. Look into both overall firm platform as well as the strengths of the specific office or group.

Even if a firm’s top strengths don’t align directly with your practice area, it’s important to demonstrate that you are interested enough to have learned about the firm on your own time. Partners want to be able to quickly identify that you’ve done your homework and start convincing you that you should choose their firm. When conducting screener interviews, Randall “know[s] within a few minutes whether or not [he] like[s] a candidate.”

It’s also advisable to briefly review your interviewers’ biographies. Referring to an interviewer’s background is a great way to avoid awkward silences. And simple questions like “What made you decide to retool into x practice?” or “How is it working for x industry clients?” can surface valuable insights.

  • Speak clearly and concisely.

This is important in any interview, but it is essential at firms like Gunderson where associates are expected to interface early with price-sensitive clients. “I want to see whether we can put you in front of founders,” says Randall, and that means being clear and getting to the point.

  • Prepare a tight answer for why you think the firm is the right fit.

Never tell a firm that you want to lateral in order to work less. Mike explains that, although he understands “a lot of law firms out there ask a lot more of their attorneys than they probably should,” the risk of an interviewer misinterpreting comments about workload is too high. 

Good reasons include wanting to specialize in something not available at your current firm, wanting a change in the type of clients you represent, or simply that you’ve heard great things about the firm and believe you would be a strong match for the culture.

  • Assess whether your interviewers would make good mentors.

Finally, remember that you are also interviewing the firm and its partners and associates. Especially for more junior attorneys, mentorship is an important factor to explore. As Mike observes, “that doesn’t mean a formal mentorship program, because every law firm has that.” Instead, try to determine whether your interviewers are the kind of lawyers who would be gracious in helping junior colleagues expand their toolkits.

Why Winston & Strawn? Why Gunderson?

Of course, I also wanted to give Mike and Randall the opportunity to explain why an associate on the market should consider their firms!

“We’re young, entrepreneurial, and we’re growing,” Mike says in relation to Winston & Strawn’s Texas operations. The firm also prides itself on providing excellent guidance to young attorneys. “You are never left on an island,” Mike promises.

Randall sees Gunderson’s culture and the opportunities it affords associates as major selling points. The culture is shaped by Gunderson’s young tech clients, making it an exciting place to work. Conscious of the importance of preserving that culture, the firm is strongly committed to promoting partners from Gunderson’s associate ranks. And given the tech sector’s growth, Randall projects: “we are going to have to make a tremendous number of partners.”

Beginning the Biglaw Lateral Process: A Guide for Associates

The current Biglaw lateral market is overwhelming.  There are more variables influencing associates’ career planning and strategic decision-making than ever before.  A byproduct is that getting started on a lateral search can be intimidating.  My goal here is to advise you on how to take the first few steps, because the way in which you target and contact firms can hugely influence your ability to make a change.  Below is a list of factors I encourage you to consider, and a quality recruiter will view each as an opportunity to maximize the likelihood of attractive offers.

1. Timing
Take advantage of active markets like this one to at least do your diligence.  It’s frustrating when you’d like to talk to a firm and they’re simply not hiring or unable to give you the kind of attractive offer you’d need to make the jump.  Also realize that offers have expiration dates and if you receive an offer from firm X, but wish you were able to talk to firm Y, it may be too late.  Do what you can up front to minimize the risk that timing negatively influences your options.

2. Who reaches out on your behalf
The best way to maximize options and ensure a successful process is by choosing a recruiter you trust and then leveraging contacts at other firms after your recruiter connects directly with each firm.  Yes, this will take away a friend’s referral bonus, but a good recruiter can effectively manage a comprehensive and targeted search, bump your resume to the top of a pile, and negotiate terms in a way that friends simply can’t.  When evaluating recruiters, pick someone who is an expert with respect to the space in which you operate so that they appreciate your practice and what could make it better in both a micro and macro sense.

3. Which firms you target
This alone depends on a ton of factors and personal preference, but it’s worth taking the time up front to think about what elements of your current practice you want to maintain and where there is room for improvement.  Your recruiter should discuss this with you and in turn provide insight into which platforms will check certain boxes on paper (e.g., bonuses, remote flex, substantive pivot, change in location, elevation of title, etc.).  Cultural fit is crucial, but it’s impossible to get a true sense for the people and environment before starting the dialogue.

4. Whom your recruiter contacts
Most firms have generic submission emails and/or online portals.  A quality recruiter should have personal contacts at the firms you’re interested in and the ability to sidestep the normal process to make sure your materials get in front of the right people as opposed to lost in the ether. 

5. Marketing
Success in the recruiting process largely depends on your ability to package and relay a clear and authentic narrative that aligns with what other firms are looking for.  If your materials and initial outreach don’t reflect that approach, you risk squandering opportunities.  Be thoughtful about what differentiates you from other candidates even if it’s not directly related to your practice.  Things like entrepreneurship, interesting work experience, and excelling at a sport or other activity can help endear you to partners.

6. Mental state

Take the process one step at a time.  Making a move is a big deal and you can’t understate the importance of doing so thoughtfully, but it’s important to think of interviews as casual conversations that allow you to explore fit and value.  A Zoom call costs nothing and having an open mind is the only way to truly evaluate the opportunity in front of you.  At the outset of the process, be open to introductions and save the real decisionmaking for when an offer is sitting in front of you.

Top 5 Holiday Gifts to Yourself in Biglaw

With the holidays approaching, now is a great time to reflect. Of course, the holidays are an opportunity to think about the important people in your life. Don’t forget to do that. But as we near the end of a very busy year for most Biglaw attorneys, you may also want to think a bit about yourself. How has this year gone for you? And how can you set yourself up for a strong 2022?

With that in mind, here are the top 5 holiday gifts to give yourself if you work in Biglaw.

Attend lots of holiday parties

Okay, not literally. Holiday parties can sometimes be a lot of fun, but you know what’s better than being hosted at a holiday party? Having firms flatter you, court you, and maybe throw a six-figure signing bonus at you! Just as your inbox will soon be brimming with party invitations, there will be no shortage of firms seeking to host you if you decide to start the lateral interview process. The market remains exceptionally hot, so you’d be wise to accept a few invitations and see how it goes.

Make your shopping list

In case you aren’t sure you want to stick with your current firm, now is as good a time as any to think broadly about your goals and make a list of your ideal employers. Are you drawn to big firms? Boutiques? In-house roles? There’s no wrong answers, but just as with holiday gifts, your list isn’t going to make itself!

Consider whether your firm has been naughty or nice

At a time when attorneys have a lot of options, it’s worth reflecting on how your firm has been treating you lately. Has it paid special bonuses in line with the top of the market? Is it promising a flexible remote work policy in 2022? If your firm hasn’t been showing much appreciation of your efforts, there’s a good chance some other firm is ready to treat you right.

Send your holiday cards

After two years of relative isolation, there’s nothing like a personal touch to let your clients and other professional contacts know you’re thinking of them. So send a card or pick up the phone and give someone a call. They’ll be happy to hear from you. And it’s a good investment in your future. From winning at business development to receiving a heads up about intriguing professional opportunities, a strong network will pay continuing and sometimes unexpected benefits in the years to come.

Ensure you have a happy New Year’s Eve

You know what sets you up for a great New Year’s Eve celebration, besides plenty of champagne? Having secured a fat year-end bonus. If your firm pays at 1950 hours and you’re at 1820, it’s time to hustle! Don’t let yourself fall just short of a $50k or more bonus. The champagne will taste sweeter with an extra five-figure check in the bank!

* * *

We at Lateral Link wish you and your loved ones a joyous and healthy holiday season. If you think a new role could help you have a happier 2022, or even if you’d just like some more information about what’s going on in this crazy lateral market, we invite you to contact us.

Don’t Let Rumors Guide Your Lateral Job Search

As you surely know by now, the lateral market has been exceptionally hot in 2021. From record signing bonuses to flexible work arrangements, law firms are offering unprecedented carrots in the battle for associate talent. It’s undoubtedly a great year to make a lateral move.

But one side effect of the rapidly shifting market has been a cascade of misleading rumors. Many candidates are entering the process with unrealistic expectations, failing to appreciate that the factors shaping the terms of a lateral offer are multifaceted and individualized. In addition, the focus on flashy inducements like signing bonuses is leading some candidates to pursue opportunities at firms that may be a poor long-term fit.

Rumor mill: signing bonuses, practice group retooling, remote work

In our experience at Lateral Link, rumors about signing bonuses, practice group retooling, and remote work opportunities are especially widespread. Let’s address those topics in turn.

When it comes to signing bonuses, everyone has a story about an eye-popping figure that some lateral associate achieved. But even assuming the number being bandied about is accurate, it’s essential to place it in a broader context. The bonus offered to a particular candidate depends on several factors, including practice area, location, and personal compatibility with interviewers. Candidates sometimes interpret a signing bonus as a judgment on their intrinsic worth, but that’s not how firms determine the number. Signing bonuses are driven primarily by the firm’s idiosyncratic needs, not the candidate’s credentials. For example, where a firm is seeking to fill slots in a particular office and needs lateral candidates willing to move from outside the region, there is greater leeway for an outsized signing bonus. The bonus that a firm offers a fourth-year M&A associate to join its Boston office is not necessarily transferable to a fourth-year lateral joining the same practice in New York.

Similarly, you should not presume that a firm’s past decision to hire a particular lateral associate to retool into a new practice area is predictive of future offers. Firms’ willingness to facilitate retooling is driven by specific practice area and location needs. The more liquid the local market in the relevant practice area, the easier it is to hire an associate who already has the skills, and the less likely the firm is to consider a candidate who needs to retool. For that reason, you are more likely to find retooling opportunities in Boston or Austin than in New York or Los Angeles.

Unfounded rumors about remote work opportunities are especially common, driven by the fact that permission to work remotely is often partner-dependent. The fact that one associate succeeded or failed in negotiating a flexible arrangement when joining a firm tells you little about the prospects for a different candidate who would be working with different partners. It’s also worth noting that a candidate’s leverage to negotiate more flexible terms may improve based on strong interview performance.

Don’t lose focus on the long term

The excitement around bonuses and other carrots can cause candidates to lose sight of what should be the primary goal of the lateral process: finding an opportunity that sets you up for long-term professional success. As great as it feels to negotiate a lucrative signing bonus, don’t let a one-time payment dictate your decision. If the firm offering the largest bonus is a poor fit for your culture preferences or career goals, you should turn it down.

At the outset of the lateral process, think carefully about why you are seeking to switch firms and how the next step fits into your broader career plans. Having that clarity of vision upfront will help you make a smarter choice when the numbers are in front of you. As you go through the process, keep an open mind. Don’t talk yourself out of opportunities before you’ve explored them properly — especially if your initial assessment has been shaped by rumors. And assuming you’re working with a good recruiter, trust the information they give you. The market changes from week to week and month to month: you can be assured that a plugged-in recruiter will have more reliable, more current information than the rumor mill.

From In-House to Law Firm: Returning to Private Practice is a Growing Trend

A common career path is to graduate from law school, spend a few years practicing at a firm, and then take a job as an in-house counsel. Biglaw associates are drawn to in-house opportunities to escape the billable hour and to benefit from a less demanding and more predictable schedule. The lawyers who make this transition traditionally have not looked back. That’s partly because they haven’t wanted to return to law firm life and partly because firms have preferred to hire lateral candidates currently working in private practice.

But in 2021 — an exceptional year for the legal industry in many respects — a novel trend is emerging. We at Lateral Link are hearing from a striking number of in-house lawyers who are interested in making a lateral move to a law firm. And firms are displaying an unprecedented openness to hiring such candidates.

The in-house grass is not looking so green

Any lawyer who accepts an in-house role understands that the transition presents certain tradeoffs. A paycut is generally required, and even for those fortunate enough to land an in-house position with similar current compensation, it’s unlikely that the rate of growth in future years will match the financial upside of private practice. Relatedly, upward mobility in the in-house context is constrained: a law firm practice group can support multiple highly compensated partners, but only one member of an in-house legal department can be General Counsel.

In the current environment, some in-house counsel are finding those tradeoffs starker than they bargained for. Most notably, sharply escalating base salaries and special bonuses for law firm associates have widened the pay disparity between firms and in-house legal departments. That disparity is especially painful for in-house counsel who find themselves working long hours. (It turns out the absence of billables doesn’t necessarily guarantee a better lifestyle!)

Another important factor is work-from-home flexibility. In many industries, employees have already been called back to the office full-time, barring a medical exemption or other special circumstance. The same is true of some law firms, but as a general matter, hybrid arrangements in Biglaw are easy to find. Firms historically have not been known as bastions of flexibility, but the pandemic has forced real change on that front. For in-house lawyers whose companies are insisting on full-time office attendance, the relative flexibility of law firms has become a selling point.

Firms are prepared to hire in-house counsel

In the past, most law firms would have been hesitant to hire lateral candidates from in-house roles — lawyers currently in private practice are considered a safer bet. But in the current war for lateral talent, firms have been forced to cast a wide net. Just as they have become more open to candidates with less prestigious educational and prior firm backgrounds, firms are increasingly willing to extend offers to in-house counsel.

Candidates returning to private practice tend to return to the same type of work that they were doing prior to their in-house transition. We are seeing candidates join practice groups such as M&A, finance, and IP. Litigation is tougher, both because firms are less desperate for lateral litigators and because firms tend to view in-house roles supervising litigation as less directly relevant to their practices.

We advise in-house counsel who may be interested in exploring a return to private practice to start the process soon. The current demand for lateral hires is exceptional, and it won’t last forever. Now is the time to test the market, before the window closes.