Category Archives: Laterals

BigLaw’s Heartbreak Hill

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Anyone following the market of BigLaw is aware that over the course of the past two decades, AmLaw 100 firms have collapsed or been acquired at the rate of one every year-and-a-half or so, remembering with either nostalgia or disdain once venerable names like Brobeck, Coudert Brothers, Heller Ehrman, Thelen, Brown Raysman, Thacher Profitt, McKee Nelson, Dreier, Howrey, Dewey & LeBoeuf, Wolf Block, Bingham McCutcheon, and Chadbourne.  The demise of most of these firms can be attributed primarily to one fatal flaw which manifested during the various crises we’ve collectively experienced since the onset of this millennium: irrational exuberance and the dot-com bubble, greed and the sub-prime bubble or lack of practice area-diversity and the great recession. Others took stock during periods of relatively stability, arriving at sanguine decisions to salvage what remained viable and attach to a stronger ship or simply dissolve. Either way, the market of BigLaw is contracting quickly and in constant flux, the current pandemic offering no respite.

At the onset of Covid-19, BigLaw by and large halted lateral partner hiring. But as the pandemic continued on with no end in sight, while weaker and more risk-averse firms stagnated on the lateral partner acquisition front many simultaneously suffering increased rates of lateral partner departures, stronger and less risk-averse firms solidified their respective bases acquiring aggressively on the lateral partner market thus increasing revenue and profitability gaps and rendering weaker and less aggressive firms more vulnerable and further diminishing their ability to effectively compete.

Specifically, over the course of this pandemic during which lateral partner activity has dropped approximately thirty percent from pre-pandemic rates (see https://www.law.com/dailybusinessreview/2020/10/08/dragged-down-by-finance-and-energy-the-lateral-market-has-cratered/), firms that have pushed hard and achieved net gains on the lateral partner acquisition front thus widening the gap between them and their competitors include King & Spalding, McDermott, DLA, Greenberg Traurig and Cozen O’Connor (see https://www.law.com/americanlawyer/2020/10/12/opportunity-in-crisis-these-firms-seized-on-an-unusual-lateral-hiring-market-in-2020/, citing data accumulated by legal consultancy firm Decipher)). In contrast, from January through August 2020, Boies, Schiller & Flexner hemorrhaged 50 of its 142 partners or over one-third of its partnership while only adding two lateral partners during the same period. (See https://www.abajournal.com/news/article/these-larger-law-firms-had-the-most-partner-exits-one-firm-says-pandemic-changed-career-plans/).

Over the next few months we can expect to see more firms coming out of lateral partner hibernation and anticipate hiring approaching pre-pandemic rates, with continuing strong lateral activity in bankruptcy and data privacy and increasing movement in labor and employment, white collar and other regulatory specialties. That said, as our fiercely competitive market works its way through these current challenging times, the pack of leading firms will continue to dwindle in number and distance itself from weaker or more risk-averse firms, some of which will inevitably be acquired or dissolve as BigLaw further contracts.

Thankfully and much more importantly though, now with an effective Covid-19 vaccine apparently only months away, we may finally be approaching the top of this particularly excruciating Heartbreak Hill. In the meantime, we at Hanover Legal remain on call and available to assist law firm managers and partners with whom we are privileged to work towards the achievement of their goals with respect to the market, as we have during the previous challenging periods we have experienced together since our founding in 2000.

Stay safe and healthy and Happy Holidays!

Recruiting During the Corona Pandemic

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As the world struggles to cope with the Coronavirus pandemic and societies world-wide adapt in order to minimize risk of infection while remaining as productive as possible under the circumstances, most major law firms continue to recruit. What has changed primarily during this highly infectious crisis is merely the basic mechanics; firms are increasingly opting for telephone interviews instead of in-person meetings.

Perhaps more significantly, law firms like other entities are employing a gamut of strategic approaches to this crisis as in any other crisis; some viewing it as an opportunity to take advantage of diminished competition to recruit even more aggressively and realize gains that may have been unattainable in a relatively calm and stable environment, others plodding forward as if it’s business as usual, while a few more skittish players have paused recruiting altogether promising to reconvene only once the crisis has stabilized. We remind the attorneys we are privileged to represent that while we live in interesting times and how we react during heightened uncertainty can be defining to us, the same applies to the firms they are considering joining, this time of crisis providing a rarely available window for due diligence with respect to a firm’s culture and their way of conducting business.

We urge our law firm and attorney clients alike to proceed with the mindset that this too shall pass, and to resist the temptation to put recruiting on hold. On the contrary, view this as an opportunity to make particularly attractive gains in a largely panicked market that will likely be unavailable again until long after we have come to grips with this crisis as we have all the others that have preceded it.

Since Hanover Legal’s founding is 2000, we have together survived a number of other crises and can fully expect to see a few more once this one too has faded into memory. We assure all of you that as our understanding of the Coronavirus continues to evolve, we will remain on board with you here as well and eager to assist you in any way.

Wishes and Predictions

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While we are all relishing our last day of this holiday season and gearing up for 2019 and the inevitable challenges the new year will bring, we thought it may be worthwhile to offer a few predictions as to the landscape of BigLaw during the year to come:

  • At least one AmLaw 50 firm will dissolve or be acquired;
  • At least two AmLaw 100 firms will dissolve or be acquired;
  • There will be a record number of lateral partner moves among the AmLaw 100 firms;
  • There will be a record number of law firm mergers among the AmLaw 200 firms;
  • All but one of the current AmLaw 50 firms will post increased revenue over 2018;
  • 48 of the current AmLaw 50 firms will post increased profitability over 2018;
  • AmLaw 50 firms will see record numbers of partner departures leaving to join boutiques or start boutiques of their own;
  • No transatlantic merger of Global 50 firms will be consummated.

With those predictions on the table, we look forward to reviewing each of our major firms’ reports of their own 2018 performance and tracking their respective performances in 2019 — wishing all of them the best of luck as the gun goes off bright and early tomorrow morning and while we commence our own 19th year of offering support to their attorneys and managing partners as they face their inevitable challenges over the course of the upcoming twelve months!