By Jean M. H. Fergus
The National Law Journal, September 24, 1990

With the current downturn affecting many segments of the legal marketplace, the total number of lateral hires has declined from the boom period of the mid-1980s. The fact is, however, that lateral hiring is still quite active, and established legal recruiters are vigorously seeking and screening experienced attorneys for their law firm and corporate clientele.

There are several reasons for the continued pursuit of lateral hires. Lateral hiring is necessary to replace attorneys who depart or retire. While overall expansion has slowed, certain practice areas are growing and need attorneys with expertise. And, most important, attentive managers of law firms and corporate legal departments see opportunities to upgrade their staffs with an eye toward long-range goals.

Less expansion has meant only that the focus on lateral hiring has shifted to other needs. Law firms and corporations are now clearly accustomed to the benefits of lateral hiring. The old-fashioned argument that once warned against hiring someone who was trained by a competitor and experienced in another firm's style of practice is rarely heard. Practical considerations in being able to respond to client needs without delay have made lateral hiring a constant.

Even when a law firm is focused on the bottom line, openings will occur because change is inevitable. People retire, relocate and readjust their career plans and personal goals. In order to keep existing clients, these vacancies need to be filled.

Unanticipated Results

In fact, one unanticipated result of the dismissals and layoffs occurring in the past six months in New York and other major legal markets has affected attorneys who have not been asked to leave. Many of these attorneys have had their confidence and their trust shaken. Others coolly begin to evaluate the firm's overall business outlook, the challenges of their work or their chances for partnership. They often decide that this is a time to leverage their experience for new opportunities in other firms or in corporate law departments.

When these senior attorneys secure another position and leave the firm, their old firms are left with new vacancies for which they had not planned and which they did not desire. These slots are often the most difficult to fill. The departing attorneys had skill and experience, were familiar with existing clients and were trained in particular specialties. This immediately narrows the pool from which a recruiter can search.

In addition, the departing attorneys were part of a system in which each individual played a unique role in the dynamics of the practice area and the firm as a whole. With additional economic pressure, firms and corporations become especially concerned about finding the right fit for these openings. They become far more willing to engage in extensive searches than to latch onto the first qualified person to come their way.

Certain practice areas are flourishing, even as other specializations shrink. The nature of law practice is cyclical, and business needs are in constant flux. For example, while the work in mergers and acquisitions is declining, demand in bankruptcy and environmental law has escalated.

These specialized practice areas need more attorneys with experience. Firms expanding in these areas want senior personnel who can add expertise and round out new teams. Lateral hiring becomes crucial to the growth of expanding practice areas, just as it had to a firm's overall expansion.

The experience of the past decade has helped motivate law firms to think creatively about these positions. In the 1980slSSOs, many firms vastly- expanded the scope of their recruitment to educational institutions not originally in their hiring profiles. The result was positive: Firms found many gems in these new mines, and now continue to be receptive to candidates with varied backgrounds.

Upgrading Talent

Another phenomenon that has reshaped the lateral hiring marketplace is "the upgrade." Law firms and corporations are now in a buyer's market.

Many quality attorneys are available because their own firms have cut back in staffing or because they are dissatisfied with their prospects in a narrowing market.

Of course, the stellar attorney is always an asset. Law firms and corporations engaged in long-range planning are beginning to see the opportunities existing at the moment. A soft market means that firms and corporations have the chance to pull in top talent and people who previously may not have been available.

Firms with no current openings should also recognize that now is the time to upgrade their legal staffs. Managers who honestly evaluate their firm's needs and capabilities invariably come to the same conclusions. Even the most solid teams include a few top performers who rate nine or 10 on a 10-point scale; there are several good performers who rate a seven or eight; and there is at least one satisfactory. but in no way outstanding, performer in the five or six range.

An upgrade means adding one or more attorneys at the top of the scale. The advantage of an upgrade is not simply that these attorneys can contribute high-quality work, but that their abilities can ultimately improve the productivity of the whole group.

What is unusual about today's market is that excellent performers are looking for new positions and considering job moves. To the surprise of many recruiters and law firms, the psychology of a weakened market has had an effect even on the best talent.

When these proven performers begin considering new possibilities, the most competitive firms and corporations should be able to capitalize on the opportunity. Most law firms and corporations recognize that if there is a slump in business, it's temporary. Law firms are in business for the long haul, and planning cannot simply cease.

Improving a firm or corporate law department by means of lateral upgrades requires perspective. Firms and corporations should realize that when business improves, it will probably do so without advance notice. By looking for solid lateral candidates, firms and corporations can be ready, when the economy changes, to develop new business and take advantage of client growth.

Some firms, while not ready to commit themselves to upgrading, have left the door open for possibilities. These firms may not place a specific "order" with an executive recruiter, but instead let recruiters know that they want to be notified if personnel with high-level abilities are on the market. Essentially, these "open-door" firms want to make sure that they have a fair chance in bidding on exceptional talent.

As for high-grade lawyers, what many seek from a new firm is not a salary increase but the assurance that they will be put on the fast track to partnership. Law firms interested in signing them on can often do so by guaranteeing a partnership review sooner than the firm they would be leaving.

Many of these attorneys practice in slow-growth areas and want work that is more satisfying. A firm or corporation that can offer particular opportunities - in work with clients, involvement in major cases or the chance to build a new specialty area - will have a good chance of luring them to join.

Particularly in the upgrade market, law firm managers need to remember what makes a job attractive to most attorneys. The issues are generally not about compensation, but about stimulating work, intellectual challenges, appreciation, respect and a compatible culture.

Law firms and corporations in the 1990s are taking a tough, business-minded approach to the practice. Firms and corporations that are thinking beyond the here-and-now have recognized the genuine benefits to be reaped from the tight job market. They realize that lateral growth will become the basis of strength and stability for the next decade in law firm and corporate legal management.

© 2003 Fergus Partnership Consulting Inc.
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