Where normally this year Southern Californians revel in the harbingers of spring - longer days, the smell of jasmine and warmer nights, many legal professionals may feel as though they are still mired in a dark winter. Coupled with the seemingly inescapable media barrage of economic news are the daily jolts of firms around the globe laying off hundreds of attorneys and preparing for more, and commentators hastily announcing the demise of the traditional law firm model.
While there is no question that these are challenging times for all lawyers, and our community has sustained unprecedented hits, there are some practical observations, perhaps even hopeful ones, that we can take away from the current situation.
First and foremost is the not-so-shocking revelation that law firms, AmLaw 200 or otherwise, are, in fact, businesses. They are businesses with shareholders who hold equity investments in their particular institutions, with management whose directive is to increase the profitability of the entity, and in turn, deliver more to the shareholders. For some time these characteristics were somehow only ascribed to law firm's corporate clients, whose primary profit objectives were themselves supported by those same leverage-driven firms. Being let go from a law firm had an ignominious sting to it, associated with an absence of competence, productivity or propriety, and something difficult for an affected attorney to navigate or explain.
With the show over and the house lights shining harshly on this reality, the open truth should ultimately inure to the benefit of both newer and more experienced attorneys, if firms exercise the same clarity in rethinking hiring as they have reductions in force. Temporary, contract or assignment-based positions on resumes should be evaluated on their face, as experience no less important than that garnered in a permanent role. This is common practice in the Fortune 500 world, where downsized employees' project-based consultant work or part-time roles can actually help them land new, better positions, rather than being seen as second-class time-fillers. From this recognition will come the use within firms of more innovative employment structures, including reduced-hours staff attorneys and multiple non-track positions.
Law firms are not the only ones re-evaluating in this new era. Clients are actively examining their legal budgets, determining how to allocate a potentially smaller bucket of dollars more carefully and deploy hired guns with greater efficacy. What matters are worth a premium? What aren't? And who is the best talent to engage for the money available? These questions should not alarm partners as much as they should challenge and hopefully reshape outmoded assumptions about service delivery and competition. High times recently produced an environment where many firm's M&A web pages were filled with billion-dollar hyperbole and home pages of regional firms bragged of international representations. And, as the Internet boom of the late 1990s magically created fly-by-night "technology" groups cobbled together with litigators and securities attorneys who returned to their true roots after the bust, so now can firms recommit their operations to legitimate core competencies. Being "themselves" will allow partners to make the most competitive, compelling pitches to general counsel and in the boardroom, with the comfort that they are truly offering the best they have to executives who will be able to clearly discern the expertise.
So what does this mean for professional development within the firm context? With a less crowded leverage pyramid, there should be a more concerted effort to train and educate the next generation of leaders within firms. This may happen on two levels. First, associates can have more direct contact with clients, with exposure coming from non-billable time spent on conference calls and in certain meetings. One of the major barriers to associates learning about the entire representation of a client and the intricacies of all of the client's matters and transactions is a data time entry issue. Clients will still not want to be billed for training work, but partners can help associates to budget a wide swath of time to know a client inside and out. Much the same way a junior agent in the entertainment realm may spend weeks perusing the files and contracts of a significant representation to know them as well or better than the lead agent, lawyers should be enabling the same opportunities for those who might one day assume their practice.
Secondly, partners can begin training associates at an earlier stage on how to solicit and develop their own clients. An active and legitimate effort by associates in this area will increase the business of the "educating" partner, who will most likely be the beneficiary of the associate's development efforts. And, volume may increase as well should firms' reduction of bloat allow for a lower rate or retainer bar for client intake.
Career development also takes on a new and more rewarding perspective in this bottom-line environment, particularly for partners. The economic issues have backlit the well-managed, agile shops and exposed the weaknesses of those whose internal mechanics and models were not as sound. With the wheat separated from the chaff, managing and hiring partners are interested in engaging with potential laterals with openness not readily available during boom times, when a constant flow of money could explain away or obfuscate any potential issues. Those partners who have been able custodians of their practice, maintaining a diverse client base, are well-positioned to examine their current platform and ask what it is doing for them. There is no shame anymore in a litigation partner asking if he or she really needs an Abu Dhabi office or a very expensive tax group that sits idle waiting for private equity money to emerge from the cold. Similarly, a transactional partner consistently losing out on product liability matters that his litigators cannot handle has a good reason to explore firm scenarios that can accommodate those cases. Partners can ask if they are getting the best value for their contributed dollar or if they might be more productive and fulfilled as a bigger fish in a smaller pond.
Clients, while pursuing quality, are also in need of value, and are looking to their counsel, as a vendor, to respond. Where firms or practice groups do not have the dexterity to adjust appropriately, whether via rates, effective cross-marketing or otherwise, partners have an open and refreshingly honest marketplace to assess.
No one can predict the future, which is what makes the legal profession so dynamic and rewarding. Those of us who are involved in it at any level - attorneys, assistants, recruiters, jurists or students-do so because we are drawn in and captivated by the law in our own way. The rapid changes taking place in the realm can be daunting and confusing at times, but those with the drive and constitution can seize real opportunities and emerge far stronger on the other side.
Peter D. Ocko, a former corporate attorney, is a managing director in Major, Lindsey & Africa's partner practice group, based in Los Angeles, where he represents partners and groups in lateral transitions and firms in mergers.