Is the job market turning around for transactional attorneys?

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WEEKLY RECRUITER SPEAK

Is the job market turning around for transactional attorneys? [byEamonn Markham] Transactional attorneys were the hardest hit when the economy went south, but with hopeful economic forecasts for the new year, the market, recruiters say, may be looking up.

Question

firms that didn’t announce plans to down-

the past few years, attorneys in these areas

I’m a corporate attorney at a law firm. Over

size used more subtle techniques: attorneys

have frequently worked 2,500-plus hours

the past few years I’ve talked to a number

were informed at their review that they were

each year.

of recruiters and they have consistently said

performing below class levels, and were

that, unless I am a bankruptcy attorney or a

asked to quietly leave. Consequently, a large

“So what?” you may well ask yourself. Well

real estate attorney, it will be hard for me to

number of qualified transaction attorneys

let’s get to the good news. My fellow recruit-

find a new job. What should I do?

have been available to the legal market for a

ers and I have noticed a sharp change in the

limited number of positions, making a lateral

current legal market within the past few

move difficult.

months. We have seen much more activ-

Answer

ity and a larger appetite for transaction

First, if you are a transaction attorney at a law firm in the United States, take a deep

Although it might appear that the legal

attorneys than we have seen in the previous

breath and take stock of the hard work that

market has been stagnant over the past few

two years. Recruiters with my agency have

has kept you employed in a terrible legal

years, it has been incredibly dynamic as a

seen an increased number of transactional

market. Then, if you are considering moving

whole and there has been a lot of growth

attorneys receiving interviews with many

firms, dust off your résumé, because market

in some areas. Associates have often been

larger firms for an ever-widening number of

indicators are signaling that the legal market

asked to assist with busier areas, or to move

practice areas. Many of these areas haven’t

is gearing up and more lateral associates

to busier locations. Law firms have opened

had a job opening for a number of years.

will be hired as firms become busier.

offices in a variety of locations, often absorb-

For example, a number of major firms have

ing practices from local offices that were

recently interviewed and hired licensing at-

I think nearly every attorney in the United

in difficulty or, in some cases, completely

torneys, a niche specialty offering very few

States would agree that the past few years

disappearing. I believe this merger activity

opportunities until recently.

have been hard times for many associates in

demonstrated that law firms are bullish on

the legal profession, especially transactional

their legal markets, as law firms are busi-

News sources have continuously indicated

attorneys. Since the transaction market

nesses and do not go to the considerable

the United States economy is picking up

peaked in 2000 there has been a steady

expense of opening offices without a strong

steam for a recovery. This is important

decline in jobs as the size of law firms that

expectation of growth and profit.

because a service industry such as the legal market is in constant flux as it responds

galvanized the legal market in the late 1990’s dwindled. Initially, firms quietly informed at-

One robust practice area has been bankrupt-

to clients’ needs. There will, of course, be

torneys that they should leave, as they were

cy and its supporting areas, as companies

further cycles when the market is booming

no longer producing at the level expected. In

withered due to economic and other pres-

and transactional attorneys are busy while

an unprecedented move, many large firms

sures, including bad management. Support-

their bankruptcy brethren are less busy.

announced that they would lay off large num-

ing practice areas have included corporate

In fact, many new corporate partners have

bers of attorneys - sometimes entire class

finance as companies have restructured

been forced to remember the recession that

years - because the firm didn’t have work.

debt. Corporate finance attorneys have also

existed when they started their careers in the

Other firms assessed the fallout, but as more

been busy as their clients have raised debt

early 1990’s.

firms laid off junior and mid-level associates,

as other capital-raising avenues have closed.

the floodgates opened and a large number of

There has also been a strong demand for se-

Current indicators of a robust economy

transaction attorneys were without jobs. In

curities litigators, commercial litigators, and

include:

some cases the firms actually folded. Many

real estate transactional attorneys. During

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1.800. 973. 1177

WEEKLY RECRUITER SPEAK

Other indications come from the public secu-

associated with attorneys who have been laid

• A growing U.S. economy in the first nine

rities markets. Although only 69 companies

off because the legal market perceives them

months of 2003 with a 7.2 percent annual

went public in 2003 (one of the lowest tallies

negatively because, the logic goes stars are

growth rate - the highest growth rate since

in nearly 30 years), 2004 has considerable

never laid off, therefore the lateral candidate

1984 - with consumer spending accounting for

promise as a year where some large issues of

must not be a star. Frankly, I disagree. How-

two-thirds of this growth;

stock will occur. Companies to watch include

ever, being laid off is now part of your résumé,

• Labor Department figures for first-time

Google and Genworth Financial - the insur-

akin to the law school you attended -remem-

claims for state unemployment benefits have

ance division of General Electric. In addition,

ber that everyone did not attend a top five

continued to drop - November 2003 had the

December 2003 had a significant increase in

law school. I also believe that firms are more

lowest number of such claims since before

the number of registration statements filed

likely to look beyond such experiences than

the economy slipped into recession in January

with the Securities and Exchange Commis-

they have in the past because the economy

2001;

sion. Hence, we anticipate an increased need

has been so bad.

• Commerce Department estimates that new

for securities associates, especially those

orders for costly and long-lasting manufac-

associates with Sarbanes-Oxley experience.

Consequently, procuring new employment is

tured goods climbed 3.3 percent, far ahead of

Other areas of the law in which we anticipate

frequently a matter of reorienting your job

the 0.8 percent gain forecast by Wall Street

to see growth include areas that support the

search. Of course, if you were asked to leave

economists;

increasingly busy capital markets, private

a firm after a period of reviews that say you

• Signals that firms are loosening their purse

equity and M&A areas, such as tax attorneys,

were unsatisfactory, then perhaps you should

strings: notably “non-defense capital goods

ERISA and employment attorneys.

take a long look at whether you fit into a law

orders, excluding aircraft” - economist speak

firm environment, or whether you even want

for the tendency for businesses to expand

One advantage of the increase in hiring is that

-has shown consistent gains;

it will create a robust lateral market for asso-

• The improving job market, which has

ciates. Many attorneys believe that they have

All in all, I anticipate a robust lateral associ-

buoyed consumer spirits with a number of

been stuck at their current firm because the

ate market, so now is the time to start looking

consumer indices consistently rising;

opportunity to move has been limited. As as-

for that position you have always wanted! Best

• And, although there are some cautionary

sociates begin to move laterally between firms

wishes for a successful search.

signs including the weak Christmas season

and in-house, additional lateral opportunities

and a decrease in personal spending, many

will be created. If the economy continues to

Eamonn Markham is a recruiter for BCG At-

analysts conclude that a sustained pickup in

improve, we anticipate that this will be a busy

torney Search based in New York City, and he

the United States economy is imminent.

year for law firms and consequently for lateral

can be reached by calling (212) 232-0400 or by

associates.

e-mail at eamonn@bcgsearch.com<

How will this affect attorneys? With a rebounding stock market, the capital markets

So now that you’re ready to move and the

are ready to free their financial resources

market for laterals in your practice area has

and it is often the capital markets and M&A

improved, what should you do? My first piece

areas that recruiters see get busy at first.

of advice to anyone considering changing jobs

Many companies need robust credit ratings or

is to start looking and apply broadly. If you

cash income streams or an increase in their

can, contact a recruiter and have them assist

stock price before assets can be purchased.

you in honing your resume. Make sure your

Additionally, companies would rather wait for

resume is perfect. Find a recruiter who can

an improved market so that they can generate

review your resume critically and one who

higher prices for assets to be sold. With in-

understands your market. Next understand

creased flexibility in the capital markets, com-

that a job search is a process and takes time.

panies will consider a sale of assets because

Realize that you may need to stay where you

acquiring companies can more easily raise

are for the time being.

the capital to fund purchases. Consequently attorneys who service these markets are the

Finally if you have been laid off, or are un-

first to see their work load increase.

employed, your chances for finding work are increasing, too. There is generally a stigma

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to be an attorney.