As the economy picks up, midlevel associates are in demand

By Mike Rosen. He was a contributing writer for California Lawyer.

After years of job cuts and career stagnation, there’s good news for (lawyer) associates: Lateral hiring is on the rise as law firms look to fill available positions with lawyers who have a proven track record. And associates are responding. Those who hesitated to risk a move during the economic downturn are now venturing into the job market.

“During the recession, every associate was clinging to their desk, figuring ‘you’re better [off] with the devil you know,’ ” says Barbara Kott, managing director for the San Francisco office of Major, Lindsey & Africa, a legal recruiting firm. “Things are finally picking up to the point that some are feeling comfortable with braving the market again.”

The numbers certainly confirm it. Movement of associates between firms dipped sharply during the recession, but a study by the National Association of Legal Career Professionals (NALP) found that lateral hiring was up 48 percent in 2011 – and associates accounted for most of those 2,800 hires nationwide. California in particular saw an increase in lateral moves by associates in significant markets across the state: They were up 29 percent in Los Angeles, 55 percent in San Francisco, and 79 percent in San Jose.

Associates are also benefiting from the effect of the lateral market for partners, who continued to move between firms during the recession. Partner hiring has held fast in California and increased slightly nationwide. And partners who changed firms during the recession are now in a position to recruit their former colleagues.

Sixth-year associate Erica Brand Portnoy left her firm last February to join Sideman & Bancroft in San Francisco. “I thought I could get more client contact in a smaller firm,” says Portnoy. “So I contacted a former partner who had made the move [there] to ask her advice. Months later, she reached out to me when there was an opening.”

An Enviable Position

Mid-level associates are in the greatest demand, due to the economy’s drastic impact on new law school graduates. Since the beginning of the economic downturn in 2007, firms have hired very few recent graduates.

“There’s now a dearth of third- and fifth-year mid-level associates” in the job market, says Kott. “We’re seeing a bigger focus on on-point experience, because firms don’t have the time to bring new lawyers up to speed.”

Lateral associates generally are seen as a safer investment than lawyers just out of law school, since they typically can start producing for a firm without much training. In lean times clients are more likely to balk at paying legal fees they perceive as going toward training new lawyers, so firms are increasingly turning to the lateral market to find associates who have relevant experience.

Great Expectations

Being in demand, of course, comes with new pressures. Until recently, firms could expect that any mid-level lateral would have a certain level of legal competence. But during the downturn there was such a severe dip in transactional work – where many associates earn their stripes – that some recruiters have found that assumption to be wrong. Some firms now are carefully questioning potential lateral associates about their substantive legal experience.

Associates these days are also expected to carry a larger workload. “From 2004 to 2008, we saw a dramatic increase in [the number of] associates and a decrease in billable hours per associate,” says Eric Seeger, a principal with Altman Weil. Seeger coauthored a report on 2011 hiring trends that found many law firms are now moving away from the “growth for growth’s sake” that characterized the boom years of the ’00s. “There were too many associates, and the recession has prompted firms to match associate count to workload.”

In 2010, associates lucky enough to be employed at a large firm billed an average of nearly 2,000 hours, according to NALP. And last year that figure rose by about 50 extra hours a year as associates shouldered more of the load to make up for the smaller work force.

Move On Over

Some associates who took a lateral job say they recognized an uptick in the demand for laterals, but they said that had little to do with why they moved. Brand Portnoy moved to the smaller Sideman & Bancroft firm because, among other things, she wanted to devote more time to raising her family. And Sara Colón, now a third-year associate with Weingarten Brown in Los Angeles, left Simpson Thatcher in New York this year to work in a small-firm atmosphere where she could get more face time with partners and more quickly accumulate substantive experience. “I was ready to move for my own personal reasons,” says Colón. “But I was cognizant [of] the economy and how that made it an easier time for change.”

California associates especially are poised to see more opportunities as the economy recovers. The tech start-up companies in Silicon Valley that clung to life through the lean years are finally going public, so they’re on the lookout for associates with corporate and intellectual property experience.

The Specialists

Elsewhere, companies need specialists who can complement existing practice groups and fill gaps left by the recession years. In Southern California, labor and employment, banking, and transactional real estate associates have become hot commodities.

“Law is becoming a profession of specialists,” says Pamela Schock Mintzer, recruiting partner for Wendel Rosen Black & Dean in Oakland, adding that “laterals are already specialized.”

Different law firms, of course, have different needs. Wendel Rosen looks for associates who have accumulated a depth of knowledge about real estate, construction, litigation, and transactions. Los Angeles’s Arent Fox grows primarily by hand-picking laterals who specialize in litigation or in health care, automotive, or international business law. Winston & Strawn seeks out specialists who fit within its existing practice groups, including intellectual property, labor law, and energy regulation.

“There’s a general slow-down in hiring out of law school, but that has not impacted the need for talented laterals,” says Charles Birenbaum, managing partner for Winston & Strawn’s San Francisco office. “It’s hard to find new associates with that deep expertise, so the lateral market is the best way to fill the hole.”