I'm a fifth year M&A associate at a top law firm in New York. I get calls all the time from headhunters trying to pitch me jobs, and seems like a crazy time to leave. In this economy, I consider myself lucky to have a job. Every day other firms are laying off lawyers, and I feel safe here. I am staying busy - my firm is actually getting slammed with work from the financial bailout. I have great credentials from a top law school, so I figure I can leave if I need to down the road. In the meantime, I have plenty to do, a bonus coming in a few months, and partners who like me. I have to wonder who would be nuts enough to start all over at a less stable firm in this financial crisis. If any firm can weather the storm, it will be my firm.
Staying Put in the Economic Meltdown
Dear Staying Put:
Your attitude is great and your thinking makes a lot of sense at first blush. The answer is complicated, and depends on your specific situation - the work you're doing, the relationships you've developed at your firm, the loyalty you've engendered in partners there, and how much influence they wield. For me to give you a reasoned, thoughtful answer, of course, I'd like to talk through every aspect of your circumstances, along with your short-term and long-term goals and the personal issues that play an important role in influences your decisions. In the absence of all of that, I'll take a stab at your excellent and timely question in the abstract.
It is commendable that you are grateful to have a job; many associates take their jobs for granted, even as their classmates are losing theirs, through no fault of their own. This economic crisis is unsettling, and it is like nothing we have ever seen. I have been in the legal professional, career counseling and recruiting for over twenty years. I started practice in mortgaged-backed securities in the fall of 1987, and even Black Monday didn't create the law firm layoffs we are seeing now.
The rush of work that your firm is seeing from the bailout is probably making your hours even more crushing and unpredictable, and you seem to be taking that in stride. I applaud your positive attitude during a stressful time. On the positive side, while many transactional lawyers are sitting around with nothing to do, you continue to learn, and your training is as cutting-edge and marketable as it comes.
You are in the midst of historical deals - the remaking of our financial systems. Perhaps you are working on the government take-over of Fannie and Freddie, or the acquisition of Bear Stearns, Wachovia or Washington Mutual. The bailout is spawning an alphabet soup of regulatory schemes (HERA, EESA, TARP, CCP). A new generation of regulatory experts in every aspect of the statues, from accounting to tax to executive compensation, won't be far behind. The regs. may have been written in haste, but they will be unraveled, construed and adjudicated for years to come.
The downside is that you may find that the bailout transforms the work you do into something less interesting to you, less suited to your skills, or farther removed from your partner mentors. Naturally, over the first days and weeks of the crisis, your partners were behind closed doors; even senior associates wouldn't be expected to be involved those high level meetings. Watch out for the signs in the coming months. Have the deals become so huge that you have less access to the partners? Are there more moving parts to the transactions - is it harder for you to get a sense of the "big picture" of the deal, much less be "in the room" when important negotiations are underway?
As a fifth year associate, you are quite senior, approaching that time when you will make important decisions about your future, whether you'll make a run for partnership at your firm. (The firm probably already has a good sense of your prospects.) In the current economy, the in-house market is shaky - layoffs abound - and lawyers represent overhead ripe for the cutting. As a law firm associate, there are no guarantees, but you are a revenue producer, and better positioned to keep your skills sharp.
Let me address some of the myths that surround making a move in an economic downturn.
Myth 1:An associate with top credentials will always be marketable.You should be proud of your hard-won accomplishments. They will never cease to be important, and you will always have that prestigious firm on your resume. However, the lateral market is very different from what you experienced in law school. In the harsh reality of lateral hiring, your marketability has a "shelf life." For example, law firms at the present moment are focusing on experienced M&A lawyers, but not too experienced. Most firms will not look past fourth or fifth year associates, because firms require a three year look to partnership. Firms also don't want to bring in senior associates to "jump the line" in front of their other senior associates, who are patiently (or not so patiently) awaiting their own shot at partnership. In this economy, the partnership race has become even more heated. In the boom years, attrition was high, and senior associates jumped ship for greener pastures, leaving open spots for other senior associates to upgrade. Now, attrition has ground to a halt. That is one of the factors leading to layoffs. In boom years, firms fight to stem attrition. Now, they've got the opposite problem - the natural attrition process isn't happening.
In your case, assuming a top 5 law school and strong overall grades (no Cs or Low Passes) that won you the job at your top 5 law firm, you are still at your "sweet spot" from a recruiting perspective right now. Our role as recruiters is to maximize your options. It is always disappointing when someone comes to us as a sixth year, and we have to tell them "If only we'd spoken two years ago; your options are much more limited now." The lawyer is always nonplussed. How could they be so highly-credentialed, and so young, and already be limited in their options? Believe it or not, planning has to start early, and it is never too early to start plotting out your career plans and priorities with a trusted recruiter and career counselor.
So what are the options? There are very few corporate jobs at present; a fraction of those that existed a year ago, or a year before that. However, for a savvy associate with an even savvier recruiter who can find you opportunities with firms focused on the future of the economy, you could be taking advantage of your current marketability. In a few years, the market will turn around (see Myth 2); and then what?
Myth 2: It makes more sense to wait until the market turns around. Three words: Transformation. Relationships. Training. The reality is that no one knows when the economic market will turn around and the legal market will rebound. Doomsayers are putting the recession at more than two years, you will be a seventh year by then. You will have invested countless hours and enormous energy in developing close relationships with the corporate partners who can sponsor you for partnership at your firm. That is the smart strategy even if you are not sure that you are committed to that goal; it is critical to demonstrate loyalty to the firm and your team, particularly in an unsteady market. Maximizing the good will with partners in positions of influence and enhancing your skill set are the smartest moves you can make to insure your job security. With your firm taking on larger and more complex transactions, your firm is sure to undergo a transformation. You may find that your role changes; you may have less opportunity for deal leadership and partner contact. At the same time, other firms are investing in the New Economy, focusing their practice expertise on middle market deals, private equity, IP and technology, energy and other areas that promise growth even in the face of recession. These areas of transactional practice tend to favor smaller deal teams, early responsibility and different skill sets than public M&A and large transactions.
As you while away the next two years at your mega-firm, the market is being flooded with the resumes of other associates with credentials similar to yours. (We at SJL can attest that law firms are only interested in seeing highly credentialed candidates from recruiters at present, and in this economy, it is a buyer's market.) With the market saturated, you may decide in the coming months to jump in, and find that the firms in which you are most interested have made their choices, and closed their corporate searches. Unfortunately, we are seeing this more and more often with some top candidates. At SJL, we never push or pitch our candidates, but we do speak honestly about the likelihood of missing out on great opportunities by waiting too long to make a move. "If you snooze, you lose." Even top associates who have waited as little as a few months have found their options greatly reduced, and it is our job to maximize your long-term career options. Looking doesn't always equal making a move. It might be worth considering dipping your toe in the market for a reality check, just to see what options are there for you. Test out your assumptions before you come to any conclusions about the advice anyone offers - including me!
Myth 3:Good will is everything; I shouldn't squander it by leaving.Good will is important, and you are wise to recognize the value of partners whose respect you've earned. Consider the track record of partnership at your firm in your practice area over the past ten years, through a few business cycles - good and bad. How many associates are left in the fifth year class? Where would you rank yourself among them? If your firm is one which doesn't monitor hours closely and offers "guaranteed" bonuses, you may struggle to answer that question. In the competitive law firm market, it is helpful - critical, actually - to know where you stand. Not that law firms should be competitive, sharp-elbowed places, but management does associates no favors when it pretends that they are not. After all, after 10 or more years, only a small fraction of a large associate class will be elevated to partnership.
If you can answer the question and say with certainty that you have been told in your reviews that you are "a superstar" or "leading your class" and "far exceeding the expectations of all of your supervisors," that is meaningful feedback. Just being told that you are "on track" or "doing fine" or "meeting expectations" doesn't mean much when firms expect you to exceed them. If your class has not experienced a great deal of attrition at this late date, it is crowded - and will have to be winnowed at some point. That's why the comparison of your record, reviews and relationships to those of other fifth years in your group is so important. If your personality does not lend itself to schmoozing partners in a large firm, you may thrive in a smaller environment, and there is no time like the present to start building good will in a new firm.
If you wait until the market recovers or you hang around until you learn that partnership is not in your future, you will be quite senior and considerably less marketable. Making a move at that time means that you have fewer options, and less time at your new firm to develop the crucial relationships both within the corporate department and in the firm as a whole that you'll need to be sponsored for partnership. Most firms require a three year look and a rather involved process of committees, meetings and coaching that starts as early as your fifth year. Move later and you're likely to take a "haircut" in your class year and compensation. You'll also have to work that much harder, both on deals and in business development and "citizenship" work - recruiting, firm committees, pro bono. You always want to leave your former firm in good standing - building bridges, not burning them. But think of all the good will you worked so hard to nurture in those two years, when you could have been building good will with partners at your new firm, investing in your future.
I know that the old adage is powerful, "there's no place like home." Our economy is changing with lightning speed, and the legal marketplace is undergoing a transformation like none we have seen before. The headhunter calls won't stop coming, but stop and speak to a few. You owe it to yourself to engage the services of a trusted recruiting professional to explore the market and educate yourself about your unique situation and your long-term goals, both personal and professional. Meet in person with several recruiters until you find someone who understands both where the market has been and where it is going. Even more importantly, seek a seasoned professional with integrity who understands you and your priorities. In good markets and bad, honest and thoughtful advice is priceless.
I wish you all the best, and I hope you'll keep in touch and let me know how you're doing.
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