Randy Block 2014-02-25 10:46:58
A recruiter’s perspective on hiring in the Texas legal market. INTRODUCTION Law firms, lateral candidates, and legal recruiters all must adapt to changing conditions that have led to the most competitive legal job market ever in Texas. In late 2008, the legal community took a tremendous hit across the nation. Even Texas—with its strong, diverse economy—was no exception. Throughout 2009, large Texas law firms made constant headlines for downsizing, not for hiring. Since I make my living as a result of law firms hiring attorneys, this was a potentially disastrous environment for my company. ADAPTING TO A CHANGING LEGAL MARKET Adapting was key for my legal recruiting company’s survival. But how did I do it? A friend at a big firm in Austin told me that he and his partners were actually spending as much money on client development as ever, even though their clients were spending less on legal services during the downturn. He explained that while other law firms were reluctant to spend during the recession, his firm saw an opportunity to stand out from the crowd. I listened closely and followed suit, culminating with an extravagant party when the Super Bowl was in Dallas. I rented out a large restaurant and hired former Dallas Cowboys legends to meet and greet my clients. I was operating at a huge loss, but the gamble paid off—clients remembered me once hiring in Texas started up again later in 2011. In fact, my slowest year was 2010, but it was also the year that I spent the most time in front of my existing and potential clients by giving speeches, producing CLEs, and spending time and money to ensure that I stayed on my clients’ radar. Another key to adapting was figuring out which law firms would be growing when the recession ended and which would continue to downsize (often involuntarily due to partner and associate resignations). I bet on firms by using a simple rule: always work with the firms where no attorneys are looking to leave even though raises and bonuses are being eliminated. THE CURRENT LEGAL MARKET My placements in 2010 through 2013 have totaled 25 to 30 people each year; but large firms now comprise only about half of my placements. In order to adapt, I also do tremendous business with boutique firms. Large-firm associates are more apt than ever to move to boutiques as larger firms’ billing rates have increased and business development is not as strongly encouraged. In the current market, law firms can strictly require the exact qualifications for the associate candidates who they hire. Prior to the recession, I was able to place litigators into transactional positions and vice versa. The demand for associates was greater than the supply, so law firms were willing to move lateral associates from one practice area to another, even though it meant retraining them. Now, firms expect and receive only the candidates that are perfectly qualified for an open position. As a result, I conduct nationwide—and, sometimes, worldwide—searches for my Texas clients. The law firms get the associates with the best grades from the country’s top-25 law schools, along with top law firm experience, often from outside of Texas. I used to place one out-of-state candidate per year. Over the past three years, I have placed five or six such candidates per year. Texas firms are thrilled to get new hires who are Ivy League-educated and have spent the past three or four years toughening up with 250 billable hours per month. I have a waiting list of Ivy League-educated and New York-trained associates who are desperate to move to the Lone Star State, where they can make just as much money but with a lower cost of living and fewer billable hours. Associates in Texas have more competition than ever for jobs, which means that Texas-grown talent must work harder than ever, while also proving that they can build, or at least sustain, client relationships. Firms are also requiring partner candidates to have at least $1 million in portables. Partners—when moving as individuals or in small groups—are almost always moving to firms with lower billing rates in order to stimulate their business. One of my clients has led Texas firms in lateral hires over the past four years. The firm has added so many new partners because these partners are seeking billing rates that are more in tune with what existing and potential clients want to pay. Partners without portable business generally stay put or, if asked to leave, are starting their own practices. Beckoned by our strong economy, national firms have been opening new offices in Texas at an increasing rate. In just the past few years, close to a dozen major firms have opened offices in Dallas and Houston, so there is more competition than ever for partners with portable business and for talented associates. For legal recruiters, this opens up even more avenues for placement. It also gives partners with portable business tremendous leverage to get maximum compensation from their current firms—or else bolt for the newcomers who are willing to pay quite well to establish their Texas foothold. When comparing the current legal job market to the pre-recession job market, there are not necessarily fewer jobs. But there are more unemployed attorneys due to more attorneys in the market. Recent graduates, as well as more experienced attorneys, have read the national news stories that repeatedly tout Houston, Austin, and Dallas as three of the strongest economies in the country. People without Texas roots will move here in the hopes of finding jobs, which is tougher than it seems on paper. FUTURE Large Texas firms are faced with increasing competition from local boutiques and incoming national firms. So far, the Texas firms that have adapted successfully have done so through a variety of methods: alternative fee arrangements, increased associate compensation, high compensation for lateral partners with business, and stronger marketing initiatives (just to name a few). I think that the competition will remain steady in the next few years as major Texas cities continue to top national publications’ lists of the strongest economies and best cities for relocation. More is expected from attorneys if they want to stay competitive in Texas, including stellar law school academics, exceptional hands-on experience, and significant portable business. As a legal recruiter, I must continue to work hard to identify the law firms that are growing, as well as the candidates who have the greatest credentials. RANDY BLOCK is the owner of Performance Legal Placement. He specializes in placing partners and associates at Texas law firms of all sizes.
Published by State Bar of Texas. View All Articles.
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