Recently in Laterals Category

To be clear, 2011 was marked by stability in the world of BigLaw only in a relative sense, 2009 being characterized as perhaps the most tumultuous year in the history of major law firms and 2010 by paralyzing risk aversion and the refrain "flat is the new up."  Lateral hiring of associates and other service oriented attorneys picked up a trickle as the strongest of our major players sought to regain some of the bench strength they had let go in the aftermath of the 2008 Wall Street collapse, the leading pack ever thinning.  Trimming and efficiency remained priorities as corporate clients continued to enjoy growing leverage over their law firm advisors, and law firm mergers and acquisitions were abundant as more players found themselves struggling merely to stay afloat while those not fortunate enough to accurately gauge the dangers around them or find healthier players on whom to link were swallowed up by the relentless waters around them.

Our long held view that BigLaw is among the most conservatively run and change resistant industries on the planet seems understated in light of the tornedos that we've been experiencing of late.  That said, 2010 served to raise awareness of issues critical to our long term viability such as globalization, diversification of practices as well as personnel, alternative billing and work-life balance and it appears that by and large, while still far from healthy, BigLaw is a better place to live and work as we enter 2011 than it was a year ago.  

Listen carefully and you will hear BigLaw breathing a collective sigh of relief as we continue to distance ourselves from the worst financial crisis since the Great Depression and the ensuing havoc that characterized the legal market of 2009.  

While "tepid stability amidst continuing uncertainty" may best define the state of the legal market during the second quarter of 2010, stability of any sort has come as welcome relief from the historic tumult that characterized the brutal legal market of 2009.  

It would hardly be an overstatement to say that the 2008 debacle of Wall Street hit the world of BigLaw like a tsunami.  In October of that year, Thelen's management -- which was already on its last legs after its ill-fated acquisition of Brown Raysman only one year earlier -- began parcelling out entire sections of their firm.  At the same time Heller Ehrman, whose partners had voted to dissolve on September 26, was closing its cafeterias and starting to remove coffee machines from its numerous offices nationwide.  Like falling dominoes, one firm after another began throwing as much baggage overboard as possible in seeming desperation.  By the end of the month, Katten had laid off 21 attorneys, Sonnenschein 24 and Clifford Chance 20.  Even firm captains were jumping ship.  Thacher Proffitt's Vice Chairman lateralled to Greenberg Traurig and Thelen's Chairman was reported to be in talks to join Howrey.  Firms across the board were scaling back and in some cases eliminating their summer programs outright, forcing law students everywhere to consider debt forgiveness programs and alternative careers even before graduation.   

After almost a decade of continuous ascent in the categories of revenue, profits, salaries and bonuses since the last deep doldrums we experienced following the collapse of the dot-com bubble, BigLaw's current plunge from the stratosphere feels to most of our players to be more perilous than ever.  The prevailing sense of fear was exemplified this week by the venerable Stroock & Stroock & Lavan in announcing that as part of its keep-the-boat-afloat strategy, it is offering its incoming associate class a $75,000 payout to any rookie who elects not to jump on board, eclipsing the significance of Skadden's historic offer earlier this year to pay associates at a rate of 33 percent of base to take a premature sabbatical. 

In the midst of these current turbulent market waters, a total of 2509 partners at AmLaw 100 and 200 firms managed to successfully jump ship in 2008.  The biggest winners were K&L Gates (185 partner acquisitions), Reed Smith (74), DLA Piper (58), Jones Day (57) and Alston & Bird (53), while the biggest losers were Akin Gump (59 partner defections), Heller Ehrman (47 pre-dissolution), Thelen (46 pre-dissolution), Mayer Brown (45), and, K&L Gates (again) (40).