Tag Archives: Lateral Recruiting

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.

In the Market for Cannabis Counsel? Don’t Pay Your Lawyers to Learn on the Job!

Demand for high-end legal services is booming this year, and law firms are competing fiercely for talent across many practice areas. Growth has been particularly strong in some niche practices that barely existed a decade ago, such as cannabis and blockchain. For law firms, the business case for establishing and promoting groups in these emerging fields is becoming ever more compelling. The demand is there, so why not try to get a piece of it?

But there is a big difference between proclaiming expertise in an emerging practice area and actually delivering a top-flight offering. The supply of practitioners with a genuine track record in an emerging field is relatively thin by definition. So from a client’s perspective, it is important to be a skeptical consumer.

Let’s take cannabis as an example. If you found yourself in need of counsel to assist with a cannabis-related matter, you might think the Chambers and Partners ranking of nationwide cannabis practices would be a natural place to start. In Band 1, you’ll find three diversified Am Law 100 firms (Akerman, Duane Morris, Fox Rothschild) and a boutique specialized in cannabis (Vicente Sederberg). So is the right answer to just hire one of those Band 1 firms?

Possibly — but not necessarily. You’ll first want to be clear about the nature of the task and how it aligns with the service offerings of different firms. Cannabis is an especially complicated area for two basic reasons. First, and most obviously, marijuana remains a Schedule I drug at the Federal level. Many elite law firms therefore remain cautious about serving cannabis clients, especially companies whose operations entail direct handling of the product (sometimes called “leaf-touching” entities).

Second, to the extent cannabis cultivation and distribution has been legalized by State legislatures, each market exists wholly within the individual State: there is no legal interstate commerce in cannabis products. This means the regulatory dimension of the industry is deeply fragmented. To the extent counsel may have regulatory experience in one State, the legal knowledge and regulatory relationships will not translate neatly to another jurisdiction.

Given that complexity, it is important to be savvy about what you actually need and whether a firm is properly equipped to provide it. For one thing, the fact that a legal task is connected to a cannabis company doesn’t by itself make the matter distinctive. Much of the legal work in the cannabis field entails bread and butter transactional services that look broadly similar to transactional work in any other industry. For example, if you want to set up a fund to invest in the cannabis space, you should probably hire a highly experienced funds counsel, rather than a lawyer who claims particular expertise in cannabis. If you can find both, that’s great, but in general, industry knowledge is going to matter less than functional experience.

Conversely, if you need advice about cannabis regulatory matters, both industry and geographic experience will be critical. Be careful about hiring a nationwide firm in this situation. A credible locally-based provider who knows the regulators in the relevant State may well be a better choice than a firm that appears on the Chambers ranking.

As a general rule in emerging practice areas, there is a real temptation to rebrand some current partners as experts in the new field. The firm will then try to convince clients to send relevant matters its way, enabling the firm’s lawyers to learn on the fly by working on those initial matters. Essentially, fake it until you make it. One Am Law 100 firm currently has a cannabis group led by a litigation associate. In fields like cannabis or blockchain, you’ll want to be extra skeptical of claims of expertise, to ensure that you aren’t subsidizing the development of lawyers whose depth in the subject matter is questionable. Know what you need, and don’t pay your counsel to learn on the job.

Why A Conflicts Check Should Be Step One in a Partner’s Lateral Move

Any experienced lawyer knows that making a lateral move to a new firm requires a conflicts check. You have surely heard about lawyers whose attempt to lateral was blocked when a client refused to grant a waiver. But despite the general understanding that conflicts are an important factor, many law firms wait until the end of the lateral process to run conflicts, even when the candidate is a partner.

Waiting to run conflicts until after starting interviews and vetting LPQs is an inefficient practice that leads to unnecessary frustration for both lateral partner candidates and firms. A sophisticated legal recruiter doesn’t need to wait to help in the process and is cognizant of conflicts from the beginning of the process given their experience, databases, and knowledge. By taking time upfront to examine the partner’s book of business and the client list of the partner’s current firm, a recruiter can proactively determine which target firms are a nonstarter due to conflicts before a firm even runs conflicts typically closer to the end of the hiring process. This helpfully narrows the set of targets and positions the candidate should consider at the start of the process before devoting time and resources to devoting attention to opportunities that are nonstarters.  

Conflicts are a key initial filter

There are several factors to consider when drawing up a list of firms that could be a good fit for a partner lateral candidate. For example, are the firm’s billing rates compatible with the rate the candidate currently charges? Will the firm’s profits per partner and partner compensation structure match the candidate’s expectations? Would the firm provide a strong platform for the candidate’s practice? Does the firm operate in the city where the candidate lives? Just as you would eliminate certain firms at the outset based on these filters, you should also eliminate firms that are a poor fit due to conflicts. 

Conflicts come in many forms

When lawyers hear the word “conflict,” they are likely to think first of legal conflicts. Obviously, if a litigation partner’s current firm represents Samsung, it would be unwise to pitch that candidate to a firm that represents Apple, given the history of claims and counterclaims between the two companies. Client waivers can sometimes be a solution to legal conflicts, but companies vary in their willingness to grant a waiver. Savvy recruiters know which clients notoriously refuse to waive conflicts and will apply that knowledge in constructing the target list. Good luck sourcing a conflict waiver if you are adverse to Chevron.    

Although legal conflicts are critically important, they are just one piece of the puzzle. Conflict considerations also extend to broader business issues. Firms typically do not represent two companies that are fierce competitors in the same sector, whether or not there is a formal legal conflict based on recent litigation. If a material client of a lateral partner practice directly competes with an institutional client of another firm or even a major client of an important decision maker at that firm, the candidate is most likely not a fit for that firm. Think Coca-Cola and Pepsi. Apple and Samsung. American Airlines and United. Or even the New York Yankees and Boston Red Sox.  

Even where there is no legal conflict or direct competition between the candidate’s book and a firm’s current clients, it is important to consider whether future conflicts are likely to arise. For example, if the candidate represents clients that have a track record of suing banks, a firm that represents a major bank as an institutional client is a poor strategic fit. Similarly, a candidate with a book that includes insurance policyholders will not be a fit for a firm that regularly represents insurers. Over time conflict considerations become more apparent but it’s not a subject where Cliff Notes has a special edition.     

The rise in partner mobility has increased conflicts 

In decades past, when partners were lifers at their firms and clients were more likely to concentrate their business with a single outside law firm, conflicts were less prevalent. Needless to say, the industry has changed, with partners switching firms more frequently than ever before. Partners who lateral tend to bring their clients with them, as a client’s loyalty to the relationship partner often exceeds its loyalty to the firm. This has contributed to a broader trend of clients spreading work among a larger number of outside firms. And unfortunately that makes conflicts an ever more important factor in the conversation that should be addressed upfront.  

As a consequence of rising partner mobility and more fragmented use of outside counsel, conflicts are arising with increased frequency. Some partners have sought to avoid conflicts headaches by decamping to boutique firms. But for those lateral candidates who prefer a traditional full-service firm, it is critical to anticipate likely conflicts as part of a well-managed search. A sophisticated recruiter will proactively address this issue and ensure that a candidate does not waste time on firms that are nonstarters due to conflicts.

Think Fall is a Bad Time to Make a Lateral Move? Think Again.

Every fall we at Lateral Link have conversations with associates who are ready to switch firms but worry that this is the wrong time of year to do it. Wouldn’t it make more sense to just wait until the new year, after annual bonuses have been paid?

That line of thinking is fundamentally flawed, for many reasons. As a service to any associate who might be holding off on making a move until 2022, we’ve assembled the collective wisdom on this topic of a dozen Lateral Link recruiters. Read on to hear why—contrary to popular belief—fall is a great time to lateral.

Don’t worry about your annual bonus! The new firm will make you whole

“The lateral firm hiring market is very active from now until around Thanksgiving, so it is a very good time to explore your options. We can always negotiate a signing bonus to make you whole for the year-end bonus that you may be leaving on the table.”  – Romina Filippou

You might actually come out ahead financially by moving now

“We are seeing lateral associate offers with extra signing bonuses on top of true-up signing or guaranteed bonuses. Making associates whole is standard with the majority of most Am Law 100 firms and many firms are incentivizing prospective lateral associate hires with significant additional signing bonuses. This gives lateral associates the opportunity to earn substantially more for the fiscal year than they would if they remained at their current firm.”  – Jesse Hyde

“Big Law firms are regularly offering full year-end, signing and even special bonuses to associates, especially corporate associates, that join between now and bonus season. So, you may actually make more money if you leave your firm now, than if you wait to make a move in January! Special bonuses are generally being paid out this fall, in the case of firms that are offering them.” – Romina Filippou

If you’re worried about meeting your hours target, a lateral move could be a solution

“Some candidates prefer a fall start date if they know they likely won’t make their hours by the end of the year, so they want to get out and be made whole before that happens.” – Kelly Rizzo

Strong firm demand + weak competition = exceptional opportunity

“When we hit Q4, the supply of strong candidates tends to drop dramatically. But the demand from firms is just as high (in some cases, higher given how many end of year closings there are). Many firms I work with will not only make candidates whole but will offer compelling bonuses on top of that in order to make the decision a no-brainer. The other scenario is that attorneys can make a move that is by no means ‘lateral,’ in that they’re joining a much stronger platform with better short term and long term prospects. So it’s truly an upward move that puts them on a far better trajectory.”  – Zach Sandberg

“If everyone is going to zig, a Fall move might be the right time to zag. The needs of firms remain strong. Less competition for a dream role or firm can happen if everyone’s waiting until January to leave their current position.”  – Steven Rushing

“Your dream job may not wait for the new year. Firms that hire in the fall — especially for roles on smaller teams or for a practice that is steady, but not booming — may not hire again until the back half of 2022.” – Andrew Clyne 

The lateral market will be much more crowded in the new year

“Competition will be more fierce in the spring when everyone is looking to move.”  – Ed Hossain

“Don’t get lost in the crowd. If you wait until bonuses are paid, you’ll be part of a huge surge in applicants we see every January. That increases competition for the same openings.”  – Amy K. Savage

“I expect an especially competitive January this coming year. Many firms have moved their office reopening dates back to January 2022, which will trigger more lateral movement at that time. By moving now, you’ll get a leg up.”  – Stephanie Ruiter

A fall start enables you to ease into your new job

“Associates like starting new roles in the Fall because they like to time their ramp-up period with a new firm at the end of the year (and end of the firm’s billable cycle).  This takes some pressure off, particularly if the candidate is receiving a guaranteed year-end bonus.  Then he/she can hit the ground running in the new year.”  – Zain Atassi

“Some candidates want to transition before the holidays to get familiar with their new firm and team in order to hit the ground running after the new year. Any transition involves some ramp up time and the fall is a perfect time to settle into a new role.” – Megan Penrod

It’s silly to stay at a firm where you aren’t having a good experience

“Consider the opportunity cost. Why put up with months of misery when you can leave and join a team where you will thrive over the holidays?”  – Amy K. Savage

The lateral process could take longer than you expect

“The process can also take longer than you might think from resume to start date. So if you start the process now, you may not end up starting until January 2022 anyways.”  – Abby Gordon

Should I Stay or Should I Go?

So you fought the law2 … and won! Congrats, you’re now a firm partner. You’ve obviously achieved a lot in your career already. You’ve honed your legal skills and become a trusted advisor to your clients. You’ve generated business for your firm, mentored associates, and contributed to the broader legal community. Rudie can’t fail!3 You deserve that brand new Cadillac4.

But are you happy? Or do you feel a little lost in a supermarket?5

Maybe that’s a complicated question. You’re a busy person, living a life of death or glory6, with a constant stream of noise competing for your attention. You might not often find the time to reflect deeply on your career opportunities7 and trajectory, or on your goals for the next phase.

Partner compensation structure. If you entered your firm as an associate, the partner compensation structure probably wasn’t front of mind when you decided to join. But as a partner, this is a big deal! The choice between full eat-what-you-kill versus a more balanced approach to sharing the wealth has implications for both your bank account and your relationships with colleagues. Ask yourself whether your firm has chosen the point on the spectrum that you would prefer.

Your personal compensation. Does your pay fully reflect the value you’re creating? As a general rule, you should be taking home 40% of revenue from hours you billed personally. Your fair share of the hours billed by members of your team is going to depend on the firm’s profitability and leverage. If you have questions about whether you’re being paid fairly, we should talk.

Equity. Do you have equity? If not, do you want it? Does your firm offer a viable pathway to the equity tier?

Capital contributions. What capital contributions does your firm require? Are the terms more or less burdensome than those of other firms?

Support for your practice area. Does your firm value your practice area? Is your practice a priority in the firm’s marketing efforts? Are you benefitting from cross-selling by the firm’s other practices?

Opportunity to own client relationships. Does your firm provide a strong platform for you to develop your own business? To the extent some of your work comes from the firm’s institutional clients, are more senior partners making room for you to own key relationships?

Broader firm strategy. Does your firm have a well-defined strategy? Do you believe in it? Are you confident that your firm will be stronger in five years than it is today?

If you know you want to keep practicing, but you aren’t entirely sure that your firm is the best place to do it … whether you are looking for bankrobber8 compensation or need a pressure drop9, we should talk. I don’t have to tell you that the market for lateral partners is extremely hot right now. I’m sure you have friends and colleagues who have moved recently.

And with good reason! On average, a partner who makes a lateral move receives a compensation boost of 20-30%. The potential gains are especially eye-popping for female partners: when a female partner switches firms, she receives a median pay increase of 40%. Makes sense that so many partners are exploring their options, right?

Keep in mind that window shopping is not a final decision. You don’t need to be bored with the USA10 to find out if London’s calling11. Actually, the ideal time to start looking is before you’re ready to move. Confidence is a better look than desperation.

But the bottom line is, in this market, you are doing a disservice to yourself if you don’t at least explore your options. You need to know your rights12 and know your worth. And the only way to find out how another firm might treat you is to ask.

Discography:

1.     Should I Stay or Should I Go (1981)

2.     I Fought the Law (1979)

3.     Rudie Can’t Fail (1979)

4.     Brand New Cadillac (1979)

5.     Lost in a Supermarket (1979)

6.     Death or Glory (1979)

7.     Career Opportunities (1977)

8.     Bankrobber (1980)

9.     Pressure Drop (1979)

10.  I’m So Bored With the USA (1977)

11.  London Calling (1979)

12.  Know Your Rights (1982)

Why You Should Build a Relationship with a Recruiter Now

So you’re happy at your firm? That’s great! It’s possible you’ll continue to like it so much that you’ll spend your entire career there. But it isn’t likely. Firms change over time and so might your priorities. Maybe personal circumstances will cause you to move to a market where your firm has no presence. Maybe your most valued mentors will retire or switch firms. You never know.

If in the future you find yourself ready to lateral, you will be well advised to consult a skilled and trustworthy recruiter. Do you know who you’ll call? If not, now is the time to start preparing. 

Start early

Many lawyers adopt a blanket policy of ignoring all recruiters. I get it. Dealing with recruiter spam is no fun, and it’s tempting to think you can always start replying once you’ve become dissatisfied with your current firm and are ready to leave.

This mindset is understandable, but it’s a mistake. Calling a recruiter when you’re ready to move is definitely better than going it alone. But if you wait until that moment, you’ll find yourself behind the 8 ball. You’ll feel pressure to move ahead quickly and will end up choosing a recruiter without much information. You’ll also be at the mercy of whatever opportunities the market presents at that particular moment. In contrast, if a well-connected recruiter is familiar with your profile ahead of time, she will be actively looking out for the most suitable roles and may be able to create opportunities specifically for you.

A relationship is important

Why does a relationship with a recruiter matter? And what does that even look like?

You probably consider your career to be one of the most important things in your life. Just as you wouldn’t go to a random doctor to address a serious health concern, you shouldn’t assume that all recruiters will be equally effective in helping you shape your career. The best recruiter is one who has listened to you and taken the time to understand your priorities. You want to work with someone who is happy to speak with you even though you aren’t looking to move. That’s a good signal that the recruiter cares about you as an individual and isn’t simply trying to fling plausible candidates at open roles. 

You should make it a regular practice to call your recruiter once a quarter. These calls are an opportunity to find out what’s happening in the market and to place your firm in context. Even assuming you determine that your current firm remains the best fit, the conversation will be valuable. And through these regular interactions, you will develop a feel for whether the recruiter is someone you trust. You will have greater confidence in the advice and feedback you receive from a recruiter if you have known that person for years.

Choose one recruiter

You are not under any obligation to work with the first recruiter you come across. By all means, speak to a few and get a sense of who seems most competent and trustworthy. But after you’ve done that initial diligence, it’s in your best interests to choose one to work with exclusively. Working with a single recruiter enables you to maximize trust and rapport.

How should you choose your recruiter? Interpersonal rapport is critical. If you don’t feel a connection, you probably shouldn’t trust that recruiter with your career. Pay close attention to whether the recruiter is truly listening to you and is supportive of your goals. And watch out for red flags. A big one is pushing you to move immediately even if you have already made clear that you’re happy at your current firm. Another is promising to achieve something far out of the ordinary. A skilled recruiter can help you negotiate a better deal, but there are limits. If it sounds too good to be true, it probably is.

A little advance planning will pay real dividends when the time comes to lateral. Don’t wait until you find yourself in a bad situation and are feeling pressure to move reactively. If you decide to switch firms, you’ll want it to be an intentional, considered, career-enhancing move. A strong relationship with a trusted recruiter can make that happen.

Remote Biglaw Positions: Separating Fact from Myth

Besides the pandemic itself, perhaps no topic has dominated recent conversation among white-collar professionals like working from home. The upsides. The downsides. How long it will last. Whether the nature of work has changed forever. Everyone has an opinion and a preference.

For most of 2020 and early 2021, the remote work debate didn’t have much immediate practical implication. Like it or not, Biglaw attorneys were mainly working from home. But now that offices are reopening, lawyers face a choice: either accept whatever new policy their firm is adopting or look to move to a firm that better aligns with their preferences.

Varied expectations for office presence

By now firms have generally re-opened their U.S. offices, with summer attendance guidelines ranging from voluntary at firms like Ropes & Gray to “strongly encouraged” at firms like Sullivan & Cromwell. As for the fall, firms have articulated varying expectations. Paul Hastings has said it expects all attorneys to work from the office as a “default” policy. Several firms have specified a minimum number of office days each week: Skadden’s expectation of at least three days per week is typical. Nixon Peabody is offering a range of configurations, including 100% remote arrangements for some lawyers.

Many firms have presented their guidelines as applying from September through the end of 2021, avoiding longer-term commitments. That makes sense in an environment where firms understand the tight market for talent will require them to offer flexibility but it remains to be seen how much.

So where does that leave the typical associate? For those who prefer to work from the office, there isn’t much to worry about. Few firms are going to discourage a lawyer who wants to spend every weekday in the office from doing so. But for those who have enjoyed working from home and are not eager to resume office life, it’s a tougher call. You can sit tight and hope that market pressures will ultimately force your firm to permit frequent, if not total, remote work. Or you can try to lateral now to a firm that is committed to offering officially remote roles.

For those considering such a move, we at Lateral Link think it’s important to separate fact from myth when it comes to remote positions in Biglaw. We’re hearing from many associates who are keen to maximize flexibility but are not well-informed about the state of the market.

Myth: Many Biglaw firms are offering remote positions

In fact, most firms are not offering fully remote roles. There is a lot of misinformation on this point, driven in part by recruiters incorrectly telling candidates that a firm is open to remote work when the reality is different. You should understand that firms offering fully remote positions are outliers, at least for now.

Myth: Openness to remote work is the same across major markets

Law firms tend to be influenced by the cultural norms of their client base, so it’s not surprising that a split on remote work is emerging between east and west. In New York, most of the banks that serve as anchor Biglaw clients are calling their staff back to the office this summer, and most New York firms want their lawyers largely back in the office in September. In contrast, the tech companies that drive the Bay Area economy are taking a more favorable view of long-term remote work, and at least some Bay Area law firms are following their clients’ lead.

Myth: You can work remotely for a law firm located in another country

Hiring employees in a given state or country has tax implications for the employer. And in the case of transnational work, there may also be work authorization restrictions to consider. Even within the United States, remote roles are often limited to particular states where the employer has made provision to operate. So no, if you are a lawyer living in the United States, you very likely cannot work remotely for a firm outside the United States. And similarly, remote roles for American firms paid through American payroll are limited to United States residents with the legal authorization to work in the United States.

Lateral Link can help lawyers navigate the evolving market

It remains to be seen what the typical Biglaw workweek will look like a year from now. Based on what most firms are saying today, it will probably involve some days in the office and some days at home. That likely means that moving far from a major city will, for many lawyers, continue to require the tradeoff of leaving Biglaw practice.

However, we expect that policies will continue to evolve as firms survey the competitive landscape and (re)position themselves accordingly. In such a fluid situation, it’s especially important to have an advisor who is in constant contact with a range of firms and can give you accurate information about how the market is trending. If you are thinking about switching to a firm that better matches your remote work preferences, Lateral Link is happy to discuss the options with you.