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What Becomes of Laid-Off (and Retooled) Associates?

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Big Law associates feel like they’ve been treading water for more than a year as layoffs have rolled through many firms—some recently. While we do not know the official number of associates that have been laid off, it’s safe to say it is significant. What’s more interesting is the impact it will have on these lawyers for the rest of the careers. Will they switch practice areas? Will it change the way they manage down? Will they flee firms, assuming that going in-house (or going in another direction) is safer? If they were let go from an Am Law 50 firm and found they had to accept an offer at one outside of the Am Law 100, will they be able to claw back up the rankings (if that is a priority for them)?

There are lessons to be learned from what happened to associates who cut their teeth during the financial crisis of 2008-2010. It’s helpful to look at today’s layoffs through that lens, to try to predict the direction of lawyers’ careers.

In conversations I’ve had with associates, I have never heard morale be as low as it is right now—it is more extreme than what I heard when people were working with smoke coming out of their ears in 2021. It is worse than when the first round of layoffs happened. There is constant wondering: will I be next? Every 1:1 meeting with a partner could be the end.

To retool or not to retool. Some associates will certainly retool, though the market isn’t yet allowing for that. Retooling typically happens when a practice area has more roles than candidates. Because of pent-up demand for jobs, most firms are finding themselves inundated by candidates with spot-on experience. Retooling is expensive and time-consuming for firms, so it is not the port of first call. But it does seem like some areas (like labor and employment, patent litigation, privacy litigation, etc.) are heating up, which could lead to these opportunities. For those who retool, it’s generally a one-way street—it’s pretty hard to go from corporate to employment litigation back to corporate. So associates should think long and hard about retooling, and whether their new practice will make them happier and safer in their roles.

In the financial crisis, a lot of young lawyers retooled into what was in the hottest demand. Many a bankruptcy and restructuring partner was born out of the financial crisis. I spoke to a partner who said that his practice is “not at all what [he] pictured,” but when he had to find a new job after being laid off in 2009, he decided to retool into a practice that felt stable to him. He has excelled at it, but he said it isn’t what he would choose if he had it all to do over again. He says he didn’t have “that luxury.”

Associates may become different lawyers than they thought they’d be. I was practicing (and laid off) in 2008. I was extraordinarily lucky to lateral very directly to a firm that was in the same tier as my previous employer. I left the law as a counsel, without significant managerial responsibilities. But as a mentor, I encouraged those coming up to focus on building grit as part of their toolboxes. It was what carried me through. Associates in 2024 are being called upon to demonstrate that grit from the jump.

An associate who is laid off now will both develop a thicker skin, and it will change the way that they manage down when they move along the track to partnership. Based on my conversations with those who were laid off in the financial crisis and are now partners, a few common themes emerged.

They may caution against over-hiring. The boom-and-bust cycle in Big Law is nothing new, but it did seem that this class of partners was less likely to have over-hired. One mentioned that he begged the firm to bring in contract attorneys in 2021 rather than make permanent hires. Of course, these will be just a few voices against a much louder chorus of other partners asking for more permanent associates yesterday, if not sooner, when things are very busy. They may scream into the void anyway.

They may not want any part in layoff decisions. Two partners I spoke to said that they had something akin to PTSD, and they wanted nothing to do with the decisions regarding who would be kept and who would need to go. They were asked for input and couldn’t bear to offer it. One expressed to me that she knew that some of the decisions weren’t what she would have recommended, but she couldn’t bring herself to put her fingers on the scale. “In some cases, it’s like choosing between your children,” one said.

They may try to preview concerns to their team. One partner I spoke to said that when he saw the writing on the wall, he took his (local) team out to dinner and told them that he was concerned by all of the layoffs across the industry. He asked how everyone was feeling. He gave them tips on how to boost their hours, and told them who to ask for work (both for the hours and for political reasons). He said he didn’t want them to be blindsided the way that so many of his colleagues had been. In the end, his team emerged mostly unscathed.

They may do the exact opposite. One partner I spoke to said that she had to sink or swim, and today’s associates would have to do that same. This thought process is not uncommon in Big Law, where many things are justified because “it’s how I learned” or “it’s what we’ve always done.” (It’s worth noting that this mindset is one of the chief complaints from associates at the top firms.)

Is in-house the panacea? The associates I talk to feel stuck between a rock (staying at a firm) and a hard place (going in-house). Last year was a moment of dramatic cuts to in-house legal teams, especially in tech. Some associates will go in-house not because it feels safer, but because it’s the first job they get. Others will feel that staying in a firm—where legal work is the raison d’etre, and not a cost center—is safer in the long run. For those who go in-house, they will be able to bounce back out to firms if they wish, as long as they had some significant firm time under their belt before they left. For those who go in-house junior, it can be more of a slog to come back to a firm down the line. For better or worse, most firms believe that the training they offer is superior to what a young lawyer receives in house.

Can you climb back up? If a candidate moves “down market” after being laid off, can they shift into the Am Law 50 later? The lawyerly response is that it depends. Firms will factor in how long they were at the higher-ranked firm before shifting over, their educational pedigree, and whether their practice area is in-demand down the line. This is one reason why those who decide to (and have the opportunity to) retool may wish to consider a countercyclical practice, rather than something like general corporate. A niche practice, like privacy litigation, will also make them more remarkable (and thus marketable) down the line.

Only time will tell if the patterns that came out of the financial crisis are repeated by today’s associates. But if history is a guide, there will be a significant impact on those who are let go or are simply waiting for the other shoe to drop—both as professionals and as people.

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