Whatever happened to the talent war?

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Posted in: Talent

Funny, isn’t it, that you don’t hear many people using the phrase “$160,000 first-year associate salaries” these days? Along with its close relative, “$140 per barrel oil,” it’s a numeric mantra that enjoyed its heyday way back in that comparatively sunny era we call six months ago. Nowadays, though, no one seems to be talking much about what the next big lawyer salary bump will be. If you were decrying the mad escalation of compensation for rookie lawyers back then, you’re probably finding first-year salary deflation to be a small silver lining in the otherwise very dark clouds hanging over our heads.

Most of the talk thus far about the impact of the recession on lawyers and law firms has centered on clients: cutting back on legal work, clamping down hard on costs, and generally passing on their own fear and uncertainty to the lawyers who serve them. We’ve seen the first impact wave strike: associate layoffs at many large US and UK firms and the collapse of two California law firm stalwarts. Now comes what might just be the start of the second wave, news that global giant Eversheds has taken the remarkable step of suspending partner payouts for six months. All of it arises from the economy’s sudden jarring halt in the face of the credit market landslide and associated global recession.

But you know, the sun came up again this morning, and lawyers and law firms still need to think not just about today, but also about next year. Before the meltdown, the talent war was a hot topic in the profession, and the importance of matching the right lawyers to the right legal employers hasn’t disappeared. Things obviously have changed for both the buyers and sellers of legal talent; how much they change, and for better or for worse, depends on how much courage everyone brings to the table. Continue Reading

An overlooked recruitment opportunity

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Posted in: Management, Talent

At a certain point, a market’s inability to correct an imbalance becomes a competitive advantage for others within that market. In that spirit, allow me to illustrate an imbalance that innovative law practitioners can exploit right now.

We’ve all heard and said a great deal about how law firms need to better address the treatment of their new lawyers and associates. The volume of that conversation has grown sufficiently loud to capture at least a few firms’ attention, suggesting that we’re building towards a critical mass. Consider this update on Ford & Harrison’s successful decision to drop billable requirements for associates, as well as Denton Wilde Sapte’s move to give associates more control over their own business development plans and even Curtis-Mallet’s decision to start a recruting page on Facebook.

All well and good — nice to see a few firms coming to appreciate the importance of adapting their traditional practices to make best use of the incoming lawyer talent wave. Now, let’s see; we’re working on the associates, the partners always look after themselves … is there anyone we’re missing? Any significant group within the law firm that’s still being overlooked?

Employee survey reveals support staff dissatisfied, says The Lawyer in reporting the results of its first employee engagement survey. The poll “shows a chasm between lawyers and business services staff, with the latter feeling undervalued, underpaid and out of the loop. An overwhelming ­majority of business support staff -– 64 per cent -– did not feel that non-fee-earning roles are valued at their firm.” Read the article for the depressing details, including one recruiter’s characterization of how lawyers view support staff: “lackeys to ­support the real business of generating fees.”

I’ve argued before that most law firms come up very short in this regard. Lawyers are notorious for their habit of treating employees without law degrees as separate and lesser entities within the firm structure, less worthy of respect and collegiality. We’ve done articles in the magazine on sensitive topics within law firms, including advancement of women and associate dissatisfaction. But the only time we’ve ever been turned down flat by every potential interviewee was when we tried to do an article on legal secretaries’ views of their workplace. Not even the offer of anonymity could overcome the intimidation factor.

So what can you, the innovative legal professional, take from all this? Valuable members of your rivals’ firms are disaffected and alienated, seeking workplaces where they’re fully integrated into the firm’s business and culture. Build or reinforce those elements in your own operation, developing a deserved reputation for proper treatment and engagement of non-lawyer professional staff. When that reputation starts circulating in your legal community’s support staff grapevine (and there is one, believe me), you’ll have a major lead over your competitors in the pursuit of these underrated and underappreciated employees.

Firms work hard to rank highly in surveys of associate satisfaction, as well they might. There may never be similar surveys of support staff, but all the better for you: recruiting the best of these professionals in stealth mode means your lead will go unnoticed, and unchallenged, that much longer.

The questionable future of partners and associates

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Posted in: Management, Talent

The evidence is growing that neither “partner” nor “associate” is going to be a meaningful term in law firms of the future. Both of these hallowed pillars of law firms’ talent structure are starting to be used more as means to an end rather than as ends in themselves.

In terms of partners, consider this article from The Lawyer about firms trying to expand overseas but having difficulty persuading lawyers to transfer to the new offices (especially in Dubai). One tactic firms are employing is to offer lawyers who accept the foreign posting the opportunity to make partner much more quickly than they normally would. Think about that one for a moment.

Partnership, which was once considered the ultimate law firm goal, is being reduced to an incentive the firm dangles in order to get what it really wants — boots on the ground in fast-growing locations worldwide. It’s been a while since admittance to partnership actually was a genuine endorsement of a lawyer’s skills and professionalism through invitation to an exclusive, tight-knit community with common goals. But it’s still surprising to see the fast track to partnership deployed as just another behavioural incentive — especially since partnership really doesn’t turn so many associates’ cranks nowadays.

To get a sense of how firms view those associates, take a look at how the chair of Simpson Thacher responded to a rumour that his firm was culling 30 associates through poor midyear reviews, an attrition tactic not unknown to large firms: “This is something that was made up by that rag in the U.K., it’s just complete nonsense” — the rag in question being The Lawyer, not a newspaper normally associated with Fleet Street standards. Continue Reading

Associates and the bad table

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Posted in: Big Firms, Management, Talent

The opening words to a sporty 60-second video montage at Cadwalader’s US student recruitment site are: “Make no mistake about it. A career at Cadwalader is not for the faint of heart.” So it would seem, following news that the firm cut 96 lawyers on Thursday, an astounding purge that surpasses Sonnenschein Nath & Rosenthal‘s recent 37-lawyer, 100-staff cut, and comes several months after Cadwalader’s January move to drop 35 lawyers.

The most recent pink slips were handed out largely in the firm’s formerly high-flying capital markets and global finance groups, which have been brought low by the real estate finance and securitization market’s struggles, and were given almost entirely to associates.There’s no small amount of schadenfruede about Cadawalader’s position to be found in the blawgosphere at the moment, much of it based on this February 2007 article in the New York Law Journal, with the built-for-irony title: “Does the future belong to Cadwalader?”

But “layoffs” (read: you’re fired, but it’s not your fault) are likely to become more frequent at the largest firms (DLA Piper announced a few in London this morning) for the totally understandable reason that the really hot parts of the economy that powered these firms over the last few years have gone really cold.

What’s funny, though, is that during these hot streaks, when associates were so hard to find and cost so much, I quite clearly remember many law firms ruing their decisions to chop associates the last time an overheated economy tanked. All those associates we fired, they said, shaking their heads, if we’d held on to them, would be able to help us now. Perfectly right, of course — and yet, now that the short-term pain of lower profits looms again, the long-term gain of associate investment apparently becomes hard to remember.

Coincidentally, today also saw the release of the American Lawyer‘s midlevel associate survey, which paints a bleak but familiar picture of associates’ waning interest in partnership or indeed any long-term law firm goals. Interestingly, though, the fear of layoffs hasn’t much to do with this, nor do issues of salary or even “work-life balance” (a term I intend to put “in quotes” until it goes away). What’s driving associates away from firms is that the work stinks. Continue Reading

The other talent war

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Posted in: Management, Talent

Boston-based Goodwin Procter seems to be one of the more innovative and forward-looking firms out there (how many law firms have not one, but two people blogging on knowledge management?). They solidified that reputation earlier this week by announcing the appointment of a director of professional development and training for professional staff (HT to Legal Blog Watch). Jamie Krulewitz’s job, evidently the first of its type, is to oversee the professional development and training of the firm’s administrative and secretarial staff.

This is self-evidently a good move, because everyone in law firms needs training and development, not just the lawyers (and many firms don’t even provide lawyer T&D). Goodwin Procter recognizes that if it wants its lawyers to operate at their very best, it needs to ensure they can count on equally top-notch staff support. This is consistent with the firm’s refreshing approach to its website personnel listings which, again unlike many others, groups lawyers and non-lawyers together as both “professionals” and “people.”

What’s interesting, though, is to consider that the firm went to the trouble of a press release and announcement for a “simple” staff hire. Firms hire non-lawyer professionals all the time without any public notice, and I’m sure Goodwin Procter normally is no exception. Probably this was simply a matter of endorsing the new person and boosting her morale by giving her a high-profile welcome, consistent with what appears to be the firm’s staff-positive culture.

But try this exercise: read the announcement again, this time not as a press release, but as if it were a recruitment piece for non-lawyer professional staff: Continue Reading

Hacking the legal marketplace

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Posted in: Innovation, Talent

I missed this story when it first came out in May, so I’m now belatedly noting a new talent recruitment company called Bohire. Its business model is simple: every time you successfully suggest a person who lands a job with a company, the company will pay you a reward in the hundreds or the thousands of dollars. The more important and high-paying the job, the greater the reward you earn. Companies already look to their own people for recommendations of lateral hires; Bohire has basically turned that personal reference system into a Web 2.0 application.

Read this report and that one for more details, including the fact that some of Bohire’s clients are law firms: one of the big national outfits here in Canada, along with some smaller Toronto boutiques. At the moment, these firms are using Bohire to recruit legal assistants and law clerks. But if these hires work out — and so far, they seem to be — how much longer do you figure it’ll be before the firm starts hiring lawyers this way? And how do you think that will go over with legal recruiters, many of whom currently charge 20% or 30% or more of the position’s annual salary for a successful placement?

I wrote earlier this week about a “process revolution” underway in the delivery of legal services, but it’s more widespread than that: it’s affecting the whole law industry. Legal publishers are under siege by bloggers; legal research providers are being challenged by cheap or free case law sites; legal recruiters are having to cope with Bohire and its soon-to-come competitors. One of these days, the open-source movement is going to get around to the legal software industry, and that’s going to do to established software makers approximately what Google is doing to Microsoft.

And really, I used the wrong word. It’s not a revolution; it’s a hackfest. The legal industry is being hacked, just like the recording industry before it and the movie industry right about now. If you’ve ever visited Lifehacker, you know what I mean by hacks: shortcuts, productivity tricks, efficiency and convenience improvements that straighten and smooth out unnecessary obstacles. Third parties are hacking their way into the law’s traditional seller-buyer relationships to set up new efficiency shortcuts, perspective windows and alternative resources. Crowdsourced legal recruitment is just the latest example.

The traditional constructs of the legal industry — many of the products and services offered by and to lawyers —  are being deconstructed and rebuilt along 21st-century lines. Pay close attention to any tremors in the ground on which you’re standing.

Law schools join the talent war

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Posted in: Innovation, Law School, Talent

Northwestern University School of Law garnered a lot of attention last week by announcing a series of curriculum changes, most prominently the creation of an accelerated JD program that would allow students to graduate with a law degree in 24 months, rather than the traditional 36. While Dayton and Southwestern law schools have gone this route before, NU is the first “elite” faculty (ninth in the irrationally important US News & World Report rankings) to go this route.

Most of the reaction to Northwestern’s announcement centered on the new two-year law degree, which some observers (including many commenters at the Wall Street Journal Law Blog) misread as a decision to “drop the third year” of law school. NU Law isn’t reducing its courseload by a third; it’s squeezing the traditional three-year degree into two calendar years, by means of a summer semester, extra courses each semester, and mini-courses between semesters. It’s a far more intense and challenging experience, not the easier one that eliminating the final year of school would suggest.

Predictably, the traditional three-year degree has staunch defenders, including those at NU’s crosstown rivals, who call the new plan an irresponsible compression that will produce inferior lawyers. Others worry that the law school experience is already sufficiently intense, and that cramming it into two years will damage students. But Dayton Law’s Dean of Students Lori Shaw sees no evidence that her program’s two-year enrolees missed out on the full law school experience: “It’s fascinating to see how much they can do.”

Now, in reality, accelerating a law degree by administering it in two years isn’t that big a deal — it’s certainly nothing like the major innovations undertaken at Washington & Lee Law School, which made its third year entirely experiential as part of a massive program overhaul. What really caught my attention — and that of Douglas Berman at Law School Innovation — were other aspects of Northwestern’s announcement that generated much less fanfare. From the Inside HigherEd article:

Northwestern is adding three new required courses (to the nine currently required, largely following a traditional law curriculum), starting with the two-year program and eventually being required of everyone. The new requirements are:

  • Quantitative analysis (accounting, finance and statistics).
  • Dynamics of legal behavior (teamwork, leadership and project management).
  • Strategic decision making.

These topic areas were grouped by faculty members based on the focus groups of what legal employers need….

These are all key elements of any law practice that intends to succeed in the 21st century. Particularly interesting are the mentions of project management, a skill I’m seeing repeatedly referenced by in-house counsel as a must-have ability that most lawyers simply don’t, and teamwork, an essential ability in the new collaborative lawyer-client relationship. Then there’s Northwestern Law’s renewed emphasis on teaching communications skills: Continue Reading

Don’t blame the recession

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Posted in: Management, Talent

Bear with me for a moment while I start with a media story. The Washington Post has announced another round of buyouts of writers and editors, including several very senior and respected professionals. Commenting on the impact of the mass exodus is Post writer Howard Kurtz (HT to Rob Hyndman), who notes:

“The talented reporters, editors and photographers walking out the door are part of the heart and soul of a living, breathing organism. How do you replace a Tom Ricks, one of the best Pentagon reporters ever? Or a Sue Schmidt, the investigative reporter who revealed Jack Abramoff‘s dirty dealings? Or Robin Wright, who’s covered the Middle East for a quarter-century? What about battle-scarred editors with deep knowledge and a light touch?

I know, I know. The future is digital. … That’s why The Post (and every other paper on the planet) is beefing up its online presence and why I write a daily blog for the Web site. But — and stop me if you’ve heard this one — newspapers matter. … The economics of the Web, for now, won’t support a staff that can hold public officials accountable across the region and still cover every Nationals game.

Now, if these talented, even legendary professionals are the heart and soul of a great newspaper that does important work, why exactly is the Post is clearing them out? Does a struggling manufacturer discontinue its best products?

Yes, I know newspaper circulation is down, at the Post and elsewhere, and that the web is the future. But good reporting on the web requires the same courage and tenacity demanded by print reporting — and with those qualities not yet in abundance in web journalism, that’s all the more reason the Post should retain its best assets and further strengthen a powerful brand-name advantage that’s the envy of most other newspapers.

“No one yet knows how to monetize web news,” the Post could have said, “but we figure outstanding journalism matters no matter where it appears. We’re going to lean into the wind and reinforce our prize-winning team in the face of change and contraction.” Instead, the message the Post has sent comes down to: “Times are tough, so we’re jettisoning our best and brightest in the hopes that lower costs will restore our profit margins.” That kind of thinking isn’t the Internet’s fault.

This brings me back to the law, because the Post‘s plight reminds me of a number of stories in the legal press about law firms “de-equitizing” partners, cutting associates, and even firing secretaries with the recession setting in. Continue Reading

The evolving costs of young lawyers

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Posted in: Big Firms, New Lawyers, Talent

In conversation the other day with a longtime friend of mine, a mother of three on hiatus from the practice of law, the subject of articling students came up (for those outside Canada, articling year is a required apprenticeship period after graduation but before the call to the bar, and no, it doesn’t work as well as it sounds). She opined that the annual salary for such students in Toronto (circa $70,000 — almost twice what my friend and I made in that city when we articled 14 years ago) was outrageous, especially considering how little new graduates actually know and can actually do.

My response was that (a) people pay what the market requires for a product or service, and that (b) if law firms needed to pay three times that much for articling students, they could (the amount of money swimming around in most law firms is astonishing) and they would (especially if they could price such students out of the range of rival firms). That’s why I think a lot of talk about starting associate salaries, including the latest volley from London, is so much hot air.

The same goes for the dreaded associate attrition trend, about which people continue to fixate. Most associates leave their law firms by the end of five years! Why, yes, they do. If they didn’t, you’d have quite a problem come partnership time, wouldn’t you? A group of lawyers from Stikeman Elliott made this and other good points at a presentation during the NALP meeting last week — firms need associate attrition. Not all your early hires are going to work out — people change, especially during their 20s and early 30s when you first hired them.

The amount of money firms spend on young talent, and their evident disinterest in taking serious action to staunch associate outflow, just confirms to me that talent has been almost a discretionary spend for law firms up until now. Young lawyers would need to cost a lot more than they currently do before partners really started feeling the pinch, and in no way would that cost threaten the overall financial viability of the enterprise. And considering how little rigour is brought to the new lawyer recruiting process generally, it’s no wonder there are so many more misses than hits over the first several years.

Two things are going to happen to change this. The first is that talent will become scarce, and good talent even more so, driving its real costs through the roof and making its departure much harder to bear. This, in turn, is going to force firms to pay much more attention to the new lawyer intake process and give much closer scrutiny to exactly who leaves. As the traditional pyramid structure of heavily leveraged associate starts crumbling, firms will hire fewer new lawyers, but they’ll need to keep them longer.

And firms will realize that the most important thing about associate attrition is not how many young lawyers leave, but whether the wrong ones are going.

NALP: the future of law firms

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Posted in: Big Firms, Clients, Innovation, Talent

Back from a lengthy trip, I have a lot of catch-up blogging to do. Just to get the ball rolling, here are my speaking notes from last Friday’s plenary session at the NALP Annual Education Conference in Toronto, in case they’re of interest.

I was honoured to be part of a distinguished panel of speakers, moderated by Ida Abbott and including Ron Friedmann, Rick Matasar, Tim McManus and Vernā Myers, on the future of law firms. I’ll pick up on a few of the points raised during the wide-ranging 90-minute plenary later on, but for now, here’s what I prepared in advance: Continue Reading