November 7, 2011
THE DAILY JOURNAL
By Casey Sullivan
The legal industry added just 400 jobs in October, mirroring national employment numbers across public and private sectors that show the economy mending at a snail’s pace.
According to this month’s data compiled by the U.S. Department of Labor, legal jobs rose from 1,112,500 to just 1,112,900, less than a half percent increase. The stagnant numbers reflect conservative hiring at law firms in reaction to clients continuing to cut back on services.
The overall economy, which added only 80,000 jobs in October and saw the unemployment rate drop slightly from 9.1 percent to 9 percent, is healing more slowly than economists predicted. Sluggish job growth has continued to affect law firm recruiting strategies, which currently aim to snatch business away from other firms rather than cultivate young talent, according to legal consultants and recruiters.
Sluggish job growth has continued to affect recruiting strategies, which currently aim to snatch business away from other firms rather than cultivate young talent, according to recruiters.
Some law firms have recently laid off staff, including O’Melveny & Myers LLP cutting 75 staff members in October, and most firms are focusing on lateral hires. The trend of “growing sideways,” as Bill Brennan at legal consultancy Altman Weil puts it, has seen firms become increasingly aggressive in poaching business from rivals – both lawyers and their clients.
“Law firms have been aggressively targeting clients at other law firms, offering them free in-house seminars, recruiting them, networking with executives of those corporations and doing everything they can to get an opportunity to get one case to prove themselves in hopes of taking away all or most of the business of that company from incumbent law firms,” Brennan said.
He added that he expects the economy to shoot higher next year, at which point law firms would most likely become “less cannibalistic.”
For now, recruiters are gearing up to reap the benefit of the downturn as firms anticipate resumed lateral hiring following a slowdown in the third quarter.
San Diego-based legal recruiter Larry Watanabe of Watanabe & Nason LLC, said that based on current discussions he’s facilitating between lawyers and law firms, he expects more lateral partner movement at the end of the first quarter of 2012 than he’s seen in the industry over the past 12 months.
But the downturn still may not be finished wreaking its havoc on the industry.
Watanabe said he expects it to also leave its mark on offices being picked apart by other aggressively recruiting firms.
“For some firms, the economic downturn will undoubtedly evidence its impact as I suspect a few offices of major national and international firms may ultimately fail,” Watanabe said via email. “In addition, I strongly suspect a few firms seeking merger options will fail and that will create movement into the market as well.”