Pandemic Slows Lateral Hiring as Firms Look for Guaranteed Winners
The COVID-19 crisis has cast a pall over the lateral market, but "unicorn" partners and groups in hot practices are still forcing firms into competition.
May 28, 2020 at 04:26 PM
5 minute read
Lateral partner moves between law firms have hit the skids, as most pre-COVID-19 deals have now run their course and both firms and partners are grappling with economic uncertainty and logistical barriers.
Still, opportunistic firms are looking to lure top prospects, and some partners are receptive.
Bringing on a lateral partner is a time-consuming and expensive prospect on its own, but because the pandemic has left a portion of the legal industry scrambling for cash, law firms are currently looking for proven winners—individual lawyers or groups that have high profiles or are known rainmakers, according to several legal recruiters.
"Firms are calling us just like they have previously, but firms have always expressed a preference for groups. Now I'm hearing only groups," said Lauren Drake, a partner at Mlegal Group. Drake said the number of deals her group is working on is down by a third, but the dollar value of the deals has stayed the same because they're working on eight group deals involving five or more lawyers.
Groups are preferred, Drake said, because they can generate revenue on their own without a lot of investment from the firm. Some firms might be running low on cash, so they don't want to make an investment in a lateral partner.
"It doesn't necessarily signal the firm is in crisis, but they're dealing with a lot of uncertainty about what their client activity is going to look like," Drake said.
Some firms have told Keith Wetmore, the managing director of Major, Lindsey & Africa's San Francisco office, that they're "out of the lateral partner market until they know what the bottom looks like." Other firms are slow-walking the process intentionally, he added.
"Other firms put on a good face and say, 'Oh yeah, we're definitely in the market.' And then you submit a candidate they would have drooled over a year ago, four months ago, and they will pass on them," Wetmore said. "When you scratch the surface, you find out the only thing firms are interested are what I call 'the COVID unicorn.'"
The COVID unicorn, as Wetmore puts it, is a partner with a practice in either bankruptcy and restructuring or in health care. Law firms are also interested in partners with experience in private equity and data privacy, said Sabina Lippman, a partner and co-founder of Lippman Jungers.
To be sure, lateral partner activity hasn't utterly halted in any practice area. This week, the co-chair of Williams & Connolly's patent litigation practice departed for Quinn Emanuel Urquhart & Sullivan, and Sidley Austin poached a 23-year Cooley veteran for its emerging companies practice, among other moves. Recruiters like Dan Scott, the director of the legal practice group at Angott Search Group, said if partners have an attractive practice, "someone is getting off the pot" and hiring them.
"The marginal people, we're not being told those deals are dead. We're being told: 'Wait,'" Scott said.
But lateral partner activity has certainly slowed down during the pandemic. ALM's Legal Compass, which tracks lateral moves, has shown a sharp drop in moves from Jan. 1 to Memorial Day 2020 when compared to the same time period last year. Alisa Levin, a New York-based recruiter at Greene-Levin-Snyder, said "nothing got started for the first month" when law firms were pivoting toward remote operations.
Meanwhile, publicity surrounding the steps many firms have taken recently to shore up their finances has lateral partners asking a lot more questions about the health of their suitors, Drake and Lippman both noted separately.
"People are paying a lot of attention to what firms are doing in terms of layoffs and pay cuts," Lippman said. These partners want to know if these measures—such as staff furloughs or reduced partner draws—are temporary, she added.
"Will they change it immediately, or is it a sign of a larger problem?" Lippman said. Drake noted that lateral partners her recruiting firm has placed are going to law firms that have enacted pay cuts and furloughs.
Despite the current environment, a number of recruiters believe the lateral market will improve as the economy improves and law firms have a better understanding of how they'll perform financially this year. Partners who are reticent about entering the lateral market right now can use this time to shore up their business plan, Wetmore suggested.
Some recruiters, whose livelihoods depend on a robust lateral market, were even more bullish. Levin said interest is already picking up "substantially," saying the disruption she saw was just a "pause" from firms focusing on moving to virtual operations. Lippman said more of her clients have asked her to resume the lateral partner deals and searches they were pursuing. Scott said he anticipates having a normal year, business-wise.
"When we do go back, the economy is going to roar," Scott said.
Christine Simmons contributed to this report.
|Read More
With Economy on the Brink, Will the Lateral Partner Market Dry Up?
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllQuinn Emanuel Has Thrived in China. Will Trump Help Boost Its Fortunes?
Law Firms Mentioned
Trending Stories
- 12 Years After Paul Plevin Merger, Quarles & Brady’s Revenue Up More than 13%
- 2Trade Fixtures In New York Eminent Domain Cases - What Qualifies and How Are They Valued?
- 3Rule of Law: Is Big Law Too Shortsighted?
- 4The Empty Promise of ‘Dubin v. United States’
- 5Weil Partner Exits Raise Questions About Future Firm Leadership
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250