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Stop Making Sense: Hire! Fire! Hire Again!

Vivia Chen

August 19, 2010

Waste_Basket Some people find silver linings in life's misfortunes. Me--I tend to find dark linings even when the news seems bright and cheery.

Recently, there's been a flow of upbeat stories about how firms are giving out offers to 100 percent of their summer associates, faster than yesterday's baked goods. Among the 100 percent club so far, reports Above the Law: Latham & Watkins (110 offers!); Ropes & Gray (82 offers); Kirkland & Ellis's Chicago office (32 offers); Shearman & Sterling (27 offers); and Skadden Arps's Washington, D.C., office (11 offers).

What's more, firms are announcing that they'll be increasing their summer associate classes for 2011: Cleary Gottlieb; Milbank Tweed; Weil Gotshal; Cravath; and Skadden Arps are some of the firms on this list, according to The Am Law Daily.

All terrific news, so why am I not feeling the good vibes? Simple: Some of those same firms that are now so bullish on new hires made some nasty layoffs not that long ago. Latham & Watkins cut close to 200 lawyers, White & Case almost 300, and Milbank Tweed about 50--to name just a few that stand out.

Call it intuition, but I'm betting that few of those laid-off lawyers are being invited back. I checked with some headhunters recently, and they confirmed what we all know: Laid-off associates are still struggling, even though there are signs of life in the lateral associate market.

"There are firms that laid off associates that are getting back in the market," says Palo Alto recruiter Avis Caravello. "There are jobs in the midlevel." She adds that firms complain that  junior associates  "lack experience" and that senior ones are "too expensive." As for laid-off associates, big firms generally aren't even taking a look: "There are candidates with great credentials, but there are too many out there."

It's basically the same situation on the East Coast. Some laid-off lawyers are "Harvard across the board," says New York recruiter Bonnie Miller. And "they are doing contract work, or whatever they can. It's awful." Adds New York recruiter Katherine Frink-Hamlett: "Prospects are good for currently employed laterals," but deferred and laid-off associates face "market difficulties."

Let's see now--firms need bodies, and laid-off lawyers need jobs. That should be an easy match, right? Which brings up this obvious question: Why won't firms hire back some of their own laid-off talent? Wouldn't that be easier than investing the time, money, and energy in wooing a whole new crop of baby associates?

That might be logical, except "law firms hire by class year," and hiring back associates is considered too expensive, says Miller. But wouldn't some of those laid-off associates be willing to step back their class year in return for a decent job? Probably, says Miller, but she says she doubts that firms would ever show that kind of flexibility: "They don't look at the big picture."

Everyone knows that associates are fungible, but this whole pattern of hiring/firing/hiring seems ridiculously wasteful--in both human and organizational terms. Maybe firms just want shiny new toys and think nothing of spending big bucks to play with them. If firms are tightening their belts, why are they being so rigid, short-sighted, and wasteful about their talent pool?

Of course, I'm not at all savvy about the mysteries of law firm management. I'm sure there's a brilliant business strategy behind all this. Won't someone explain this to me?

Do you have topics you'd like to discuss or tips to share? Email The Careerist's chief blogger Vivia Chen at [email protected].

Photo: Alexey Stiop/Fotolia.com


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Kids, the future is over. Sorry you were lied to about going to good schools and passing tests being the key to success, but GW and the banksters took all that away from you.
Our company hires lawyers at the going rate - $15.00 per hour. We have lots of top tier school grads to choose from with great biglaw experience, and they are grateful to get the work.
That's the market - we did not create it, we just live in it and try to keep our Americans employed.
So to all you Lexus driving D-bags, we say only this - boo hoo too bad so sad, welcome to the future.

To Stephen Seckler:

Guess again.

To John Timecks:

This was not your usual recession. The layoff numbers were huge and a lot of very good associates were laid off. Your laid off people are shit assumption may save time in evaluating candidates but that attitude is ruining lives.

To R. Louis:

My top 20 firm laid off half of my 60 person class, as first years, four months after everyone started. There was no work so I don't know how they could have reliably selected the "talented" from the "less talented."

As for the "badmouthing" or other problems with hiring laid off associates, I really, really doubt that destroying a bunch of careers is going to lead to fewer of these problems than a simple layoff that people can come back from.

There is also the issue of whether laid off associates would want to return and how many of the most talented ones have moved on to greener pastures. There are certainly a percentage of those let go who are still in the job market and would be happy to have their jobs back; but for some, being asked to leave was merely a catalyst for making the kind of change they knew they would want to make some day.

Large firms only provide good long-term career options for a small number of attorneys (relatively speaking). I suspect that a percentage of those "let go" have already "moved on" psychologically and are now prepared for careers in-house, in government, at non-profits, at smaller firms or in quasi-legal jobs.

There is another reason. The economy was merely an excuse to get rid of certain associates, i.e., the weaker performers. The partners don't want these people, so they aren't going to be brought back when the economy improves.

1. The laid off associates were perceived as being less talented, and the firm is more comfortable rolling the dice with a new set. Some of the newbies will surely be less talented than those laid off, but who knows? Law firms are used to churning through people. Why change?

2. Even if the recalled associates are perceived as talented, the partners fear that recalled associates will have low morale, badmouth the firm, assume they are first in line to be canned again and will blab incessantly to Above the Law. Oddly enough, software houses, manufacturers, and most other employers don't seem to have those problems with recalling laid-off employees, but lawyers must be special.

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About The Careerist

The Careerist takes an inside look at how lawyers shape their careers and manage their lives. The blog aims to dissect developments in the profession, provide useful information and advice, and give lawyers a platform to voice their views. The goal is to provide a fresh, provocative take on the state of lawyering.

About Vivia Chen

Vivia Chen

Vivia Chen, The Careerist's chief blogger, has been covering the business and culture of law firms for a decade. A former corporate lawyer, Chen is fascinated by those who thrive (as well as those who don't) in the legal profession. Her take: Success in the law (and life) doesn't always travel a linear path. If you have topics you'd like to discuss or information to share, contact her: [email protected]

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