Legally Speaking – Legal Recruiter Blog

Let’s be honest – many firms aren’t exactly silver-tongued at articulating what sets them apart from their competitors. They don’t always adequately impart the distinguishing characteristics that would “seal the deal” for lateral partner candidates. I think the primary reason for this is the firms want their plug to be optimistic and appetizing, and the most harmless way to do that is to use nonspecific statements or observations. For example, depending on the partner candidate, they may or may not be acquiescent to variable partner compensation. Some firms may think they are more attractive when they avoid the “nuts and bolts” specifics that may sour candidates who may be interested in the firm.

So…what’s a lateral to do?  Well, in today’s legal market, I believe it’s a good idea to go back to the basics.  It’s easy to get caught up in the complexities of the firm, but if the basics aren’t addressed, the more complex issues won’t be, either.

The first priority is to determine the pros and cons of your current situation. Second, determine what you’d like to see in your next opportunity. Once your list is complete, it will be the ruler you will use to measure each new situation you investigate. It is important that you take the lead by showing the firm how to characterize and promote itself. In order for you to determine if the opportunity is the right one for you, you MUST ask the meaty questions that will provide you the right information to ascertain if the firm: 1) is financially sound and has a well-defined outline of who it is and where it is going, 2) shares your view of how law should be practiced and 3) provides you both a financially beneficial situation and the atmosphere and opportunity to further grow your practice.

The following questions are to ask that will help you track the process and will either assist you in understanding the dynamics of the partnership or, at a minimum, will aide you in narrowing the field of firms. Some issues will be deal-breakers, others will allow for negotiation and compromise.

What business focus are you targeting? The uncertainty in today’s economy makes this a mandatory question to ask. Is the firm attempting to think ahead of the market in an attempt to anticipate the practice areas that will be most in demand in the future? How much does the firm rely on any particular practice areas? If the market for any of these legal services dwindles, what other practices will pick up the slack?

What are the firm’s plans for future growth and expansion? Any plans for new and existing satellite offices? What is the time-frame? We know expansion through mergers and acquisitions has become critical in the last several years. However, as we struggle through a recessionary economy, I think we’ll see increased attention placed on those law firms that have been conservative in opening new offices. After all, the geographic decisions a firm makes say something about the firm. This may or may not work for your practice.

How much debt does the firm have? Capital investment and ongoing debt obligations of partnership are critical issues in joining a firm as an equity partner. The prospective firm should be forthcoming about its debt and use of lines of credit. In today’s legal arena, profit per partner figures, on which we’ve relied heavily in the past, will not be as reliable as forecasts of future success. The key will be how the firm manages its business on behalf of capital partners.

What is your partnership structure? Today’s predominant structure is a two-tiered partnership. With the meaning of “partner” has changed considerably over the last decade, becoming an equity partner has, in some ways, become more difficult. Two-tiered partnerships may offer a firm more flexibility to promote lawyers without having to divide the profits. It usually also raises the entry bar to the equity level. Be sure to ask why the firm has chosen its partnership structure and if the firm has de-equitized partners in the past, and under what circumstances this occurred.

What is the firm’s compensation model? We are all acquainted with eat-what-you-kill, merit-based and lockstep partnership systems. Though we know that one is not elementally preferable to another, a firm chooses its compensation model for a reason. It speaks volumes about the firm’s culture and its business practice. I’m certain some will be more desirable to you than others. You will also want to ask who decides the compensation and if partner compensation figures are open or closed. Third, you will most definitely want to ask if aspects that are important to you (i.e. referring work and cross-selling) are rewarded in the firm’s compensation model.

How would my compensation be affected by a down year in my book of business? If your business is one that fluctuates with the ebb and flow of the economy, it is important to ascertain how a more modest year of collections will be viewed by a new firm.

Does the firm have a mandatory retirement age? Just like partnership models, the mandatory retirement age issue has been one in transition at many firms.  

Once on board, what programs does the firm have in place to facilitate my integration and aid in future success? You have a plan for growing your practice, but it is critical to know how the prospective firm plans to support you in this endeavor. The uncertainty of the direction of the industry makes this a mandatory question to ask.

Looking for more helpful information? Need expert career counseling? Visit www.grimeslegal.com or call 800-875-3820.

We all know today’s legal market continues to evolve and it certainly presents unique challenges. With the uncertainly still looming over the financial markets, many law firms continue to streamline their ranks and trim compensation for partners whose business has fallen off. It is not uncommon to push partners into early retirement or into counsel positions for those who are no longer producing at an acceptable partner level.

So…in light of these not so attractive elements, how do you stay nimble and place yourself in a position to exact the most benefit from the current market situation? How do you maintain a vital position and keep your firm enamored with you?

Answer: Do some soul-searching and ask yourself these thought-provoking questions. If you answer them honestly, they will help you determine if you should stay the course with your current firm or start to look for new digs.

1. Are you satisfied with your firm’s reputation in the legal and business communities?
2. Is your firm well managed?
3. Are you optimistic when it comes to the financial health of your firm? Do you believe management is making the right decisions regarding the firm’s future?
4. Does your firm provide the platform you require for building your practice? Does your practice coincide with the strategic vision of the firm?
5. Is the firm committed to marketing? Does the firm provide you with the resources you need to successfully market your practice?
6. Are firm billing rates compatible with your specialty and your clients and has your firm adopted a flexible billing program?
7. Do you have the opportunity to participate in important departmental or practice decisions? If you desire a leadership role in the firm, is that a real possibility?
8. Do you feel you are compensated fairly when compared with your peers at your current firm and with those at similar firms?
9. Is your firm a good cultural fit? Do your peers share your views of work/life balance and superior client service and reputable character?
10. Does the firm’s physical surroundings provide an atmosphere where you can be productive?
11. Do you feel respected and valued by your peers? Do you respect and value your colleagues’ legal work? Are you comfortable referring your clients’ matters to them?
12. Do you receive adequate support from other partners, associates, paralegals and support staff in order to get work done in a timely fashion?
13. Is the firm committed to pro bono work and community service in a way that coincides with your values and beliefs?
14. Does the firm have a fair policy for recognizing cross-marketing and service to yours and others clients? Is there equality regarding how much work you receive from others as opposed to how much work to you throw off to others?

The National Law Journal reports that as of mid-January there was a 20 percent decline in applicants for seats in American Bar Association-accredited law schools, and the AM Law Daily speaks of the recent British law firm lay-offs and poses the question: Will U.S. firms be next? From massive firm lay-offs and talks of restructuring legal departments to an immense decline in the number of law school applicants, the handwriting is definitely on the wall – the legal industry is changing. So I ask you: Are you prepared to change with it? Are you ready for the new “normal”? While it can be difficult to determine what to do in this new market, it is crucial that you explore creative solutions and determine which options will best suit your goals, personality and skill set. There are many options, but doing nothing isn’t one of them (check out our blog post to learn why).

An up-and-coming trend you may want to consider with endless rewards and possibilities is contract work. An independent contractor (IC), as it relates to the legal industry, is a lawyer who, instead of being a salaried employee with a particular law firm, is “contracted” to work on particular cases or for a designated time period for one or several law firms. Working as a contract attorney could be your safety net until you determine which direction you’d like to go in your career.

You are only as good as the people you know in today’s job market. One of the benefits of contract work is that it provides you the opportunity to make connections and get your foot in the door of many notable firms. Making these connections with recruitment coordinators and partners may be just what it takes to give you an edge when it comes time to recruit new lawyers. It doesn’t hurt that the employer gets to see a few samples of your legal work, either.

Besides helping you make connections, another perk contract work offers is flexibility. You control how much time you spend working on projects and how many projects you take on. Contract work can be used to supplement the income you are already receiving at your current firm or you can make a full-time job of it. It is also flexible in that it allows you to work on projects from any location – the office, from home, the hotel while on vacation or while visiting your mother.

You may be thinking, “OK, I’m listening. So how do I even get started working on projects for these law firms?” Fortunately, I have the answer for that. GLI/Global Legal Recruiting network has a sister company called GTS that has potential projects in 30 different locations in the U.S. as well as in more than 77 countries, which means we anticipate a continuous, steady stream of interesting projects. If you are interested in working on projects or have any questions regarding available opportunities or contract work in general, I would be happy to be of assistance. The legal world is changing – wouldn’t it be more savvy if, instead of getting wiped out by the title wave, to instead be prepared to ride the wave in the sea of change. Isn’t it great to have choices!

Every day we make decisions; we choose a path…a course of action. Some are simple and take little thought, such as “What should I wear? What should I have for breakfast? Should I take the train or carpool? Should I grab takeout for dinner or make a quick stop at the grocers on the way home?” Not life-and-death choices, are they?

Unlike these decisions, sometimes we’re faced with heavyweight choices and those are often career and/or life-altering. Thomas J. Stanley, author of the book The Millionaire Mind wrote: “It is only when you exercise your right to choose, that you exercise your right to change.” As you, no doubt, have noted with technology, anything that isn’t consistently changing tends to fall by the wayside. For instance, the iPhone 4 was quickly abandoned when the “new and improved” iPhone 5 was unveiled. The same is true with your practice, and with the economy back on the rise, you must prepare yourself so you are not caught off guard. Below, I have compiled a list of thoughts you may need to consider if you are not quickly adapting to the new economic dynamics and getting ahead of the game:

1. While others are firing up their engines, anyone who is not adapting to the new economy will be left far behind. Although more cautiously than before, companies are still spending money when they see it’s a worthwhile investment. Are you that fresh opportunity?
2. How far behind are you now that the recovery is moving full-steam ahead? Will you be able to quickly adapt to the new landscape that is occurring? Or, will you be one of the many partners scrambling to regain your footing?
3. Perhaps your firm decided to freeze salaries and table bonuses this year. Don’t be surprised if the firm winds up investing that money (and then some) to replace those “valued” rainmakers who no longer feel appreciated by or connected to your organization.
4. Are your clients investigating innovative new programs and/or alternative means to meet their needs? If they took a close look at your practice, would they see the inventive ideas they are looking for, or are they left wanting?

So what is it going to be? Will you choose to stand in place and hope the winds of change don’t blow you away, or will you use the wind to help your practice move forward more swiftly? It’s all about the combination of the right timing and the right opportunity. At GLI, we’re always working on pivotal open positions in a wide variety of practice areas. We are creative, which gives us the ability to think differently and work outside of the boxes which constrain solutions for so many others. Our creativity allows us to see things others have not seen and thus show new directions and new possibilities to both clients and candidates alike. The most important question we can ask you is: “What if …?”

So, get the most out of 2013!  Enhance your performance with our tips. Check them out for free below.  

By Andrew Lu on June 21, 2012 5:02 AM

Solo practitioners in Oregon have it worst, while 11-20 person firms in New York had it among the best in terms of getting paid for legal hours worked. This according to a new survey on attorney billing efficiency.

The survey looked only at small to medium sized firms with less than 50 lawyers. So the big firms with endless resources were not included. Though you can probably bet those firms milk every last penny out of their clients (and their attorneys).

The survey looks at attorney billing efficiency for firms, reports The Wall Street Journal. Billing efficiency means how much time you are actually paid relative to the amount you put in. So if you work nine hours, but only get paid for six, your billing efficiency would be 66%.

Not surprisingly, solo practitioners and two-person firms were the lowest on the efficiency scale nationally. What is surprising, is just how inefficient solo and two-person firms are, billing only at a 39% rate. Solos are expected to perform a lot of non-billable work like marketing, rainmaking, and administrative duties, so this may explain the low number. Additionally, solos probably don’t have enough resources to hire secretaries and assistants to perform the unbillable work. But getting paid for only half your time seems ridiculous. Perhaps this should motivate you to hire some help.

Sadly for attorneys in Oregon, all attorneys who responded to the survey only billed at a 40% efficiency rate, reports the Journal. If all attorneys in Oregon are only billing at a 40% rate, one can only imagine what a poor solo in Oregon gets.

On the opposite spectrum, lawyers in Delaware billed at 94% of hours worked. New York, Colorado, Utah, Louisiana, and Mississippi also ranked high on the list, reports the Journal.

Attorney billing efficiency varies wildly from state to state and among different sized firms. The fact that lawyers in Oregon bill less than half what their peers in Delaware do is shocking. If you’re a small firm attorney, you should consider hiring assistants. This may be a case where spending some money, will help you make a lot more.

Article originally appeared in:

The economy may be slowing, but billing rates continued to rise, according to information provided by 127 law firms that responded to billing questions submitted as part of the NLJ 250, The National Law Journal‘s annual survey of the nation’s largest law firms.

Billings climbed by an average of 4.3%, 70.6% of firms increased billings this year, and one firm broke the $1200 an hour mark.

The average of the average firmwide billing rate for 2008 was $363 per hour, compared with $348 in 2007. The average of the median firmwide rate this year was $350 per hour, compared with $347 per hour last year.

More Here…

Will law firm bonuses follow the leaders this year?

 Cravath, Swaine and Moore and Sullivan & Cromwell are usually the first two large law firms to announce associate bonuses and set the standard that many large firms follow.  Last year Cravath paid a year-end bonuses of $35,000 to $60,000 in addition to special bonuses of $10,000 to $50,000.

 As clients seek discounted legal fees in the midst of an economic downturn this year may not see $100k bonuses for associates.  During a meeting of law firm managing partners hosted by Citigroup Private Bank in August (before the economic crisis) one law firm leader came to the conclusion, based on discussions at the meeting, that while year-end bonuses would remain unchanged, special bonuses will be eliminated at many firms.

As for Cravath, Swaine and Moore and Sullivan & Cromwell, they’re not saying yet.

The NLJ 250 is out. 

The National Law Journal’s annual survey of the country’s largest law firms shows (no surprise) that hiring slowed significantly in 2008.  Seven large firms announced layoffs this year and two major firms on the list, Heller Ehrman and Thelen, dissolved, affecting about 1200 attorneys.  DLA Piper stayed at the top of the list and K&L Gates climbed into the top ten firms

Among the findings:

Growth is down.  The top 250 firms increased attorney ranks by 4.3%, compared to 5.6% in 2007. 

16 firms entered or left the list with several firms from the south and east entering the list and several from the Midwest leaving.

K&L Gates grew significantly, becoming one of the ten largest firms for the first time through mergers and lateral hires.

The credit crisis led to layoffs at several large law firms.  Seven large firms announced layoffs totaling more than 200 attorneys.  Hundreds more lost jobs with the dissolution of Heller Ehrman and Thelen.

It’s no longer raining cash on the legal idustry.

Dan DiPietro, client head of the Law Firm Group of the Citi Private Bank reaffirms some of the conclusions of the group’s Client Advisory, published jointly with Hildebrandt International this past January, updates others, and gives us a summary of their report for the first half of 2008.

From 2001 through the first half of 2007 law firms have reaped the benefits of a strong economy. Expenses grew, but profits outpaced them. Starting last year, however, expense growth, driven by continued hiring, started to outpace profits.

Despite a slowdown in demand firms continued to add lawyers, leading to a slowdown in productivity not seen since Q2 of 2001. ”The increase in total lawyer counts, coupled with the decline in demand, caused productivity, or average hours billed per lawyer, to drop by 5.5 percent in the first half of 2008.”

The advisory issued in January predicted profits of three to five percent this year, but profits are now predicted to remain flat or even fall by as much as ten percent across the industry and to fall five to fifteen percent at the AmLaw 100.

DiPietro suggests the silver lining of what promises to be a bad year for the industry is that firms will have to say goodbye to unproductive lawyers and get a better handle on expenses.

For recruiters and their rainmaker candidates the silver lining is that competition for top producing attorneys will increase.

Bruce MacEwen, Adam Smith, Esq.

Put these trends together, as reported by this month’s issue of The
American Lawyer, and what do you get?

• Midlevel associates, despite their pay jump since 2006, aren’t
  satisfied with with their compensation;
• New York City salary levels have
  penetrated every major market across the
  country;
• The annual midlevel associate survey “shows
  associates eyeing the door;”
  and
• Howrey is continuing its revolutionary efforts to end
  associate lockstep.

I suggest you get what could be the beginning of cataclysmic cracks in the
associate compensation/promotion/professional development model.

Shall we start with the easy stuff?

Read the rest…