2021 State of the Legal Market Report

Transcript

[00:00:00] This is a fun talk where we'll talk about a lot of different things today. And this is from the perspective of a from someone that's in the legal placement industry.

[00:00:09] So I'll talk a little bit, what about that in a second? But what that means is that we, that the type of people that get jobs through us typically are the ones that  are most in demand in the market. And and  it's changed a lot this year. And we'll talk about that. And after I give my presentation today we'll take a quick break and then I'll come back and I'll answer.

[00:00:29]As many questions as people have, whether it's about market or really or any questions you have whatsoever is something that we  do here every week. And you can either type your questions or I can call on you and you can ask them.   This presentation is called the top 20 reasons.

[00:00:46]The top 20, the 2020 legal market was so unique. And and then I have a bunch of predictions about what's going to happen in the 20, 21 legal market. And each of these 20 reasons are also our predictions as well.   [00:01:00] Honestly this years market was in 2020 was probably the most unusual market I've ever seen.

[00:01:05]There were bumps in 2000 and late 2000 was a very bad market. 2001, obviously it was a bad market. And then the 2008, 2011 there were problems in the market. And in those markets, things were very predictable. And I'll talk about that in a second. And in recessionary environments, typically what happens is corporate slows down and first you generally see a slowdown in New York and Silicon Valley, and then it starts spreading around the country.

[00:01:30] But this market was much different and Honestly, it was a very good market and that was something I was. And if you stand the rules that are going on in each market law firms can make money and candidates that understand these rules can also do very well as well.

[00:01:48] It's very important to understand these rules because if you understand them you can hire the right people and your firm can grow. And also if you understand them No, you can stay employed and find a position. [00:02:00] So in the, as recruiters, typically what we do is. We have an understanding of, the kind of people that the market wants to buy, meaning they, law firms pay us for finding people for them.

[00:02:13] And so that's what we do is we concentrate for the most part on what people want to buy. And almost all legal recruiters, as long as I've been in this business, which is now over 20 years follows fairly simple rules in terms of the types of candidates they're interested in. And in 2020 those rules completely changed.

[00:02:32]No time in history of I've ever seen so many different types of candidates marketable and so many different types of firms willing to hire them. And literally,  this market is so changed this year that I would say. Statements such as the earth is flat or a fine machine is impossible, which were, at one time people believed th the rules are that out of the gate right now.

[00:02:53] And they're just really not appropriate. Honestly, almost every paternity in my belief is marketable these [00:03:00] days. And. What a recruiting firm does and what I do for a living and what everybody here does for a living is typically, we find a organization that needs a certain type of worker.

[00:03:10]And then we go out and we find those workers, or we have them in database this, or know who they are. And we look at people that seem like a good fit. And then if we find people that match what they're looking for, the firms will pay us. And, there's been recruiters in the time of the Romans.

[00:03:25] And even before that, it's just the way it works and, in the law firm market, it's a it's a smart thing for most law firms to use recruiters because they can make a lot of money with attorneys that they hire, if they have enough work. And in general, the cost of a recruiter is about 5% or sometimes less, sometimes a little bit more.

[00:03:43] Of what the average attorney will generate in terms of revenue for a law firm in a year.   I'm not gonna focus so much on numbers, this presentation, but I'm going to talk a little bit more about who is buying and who's getting bought. And I believe that those are the most important things to understand.

[00:03:59][00:04:00] So most legal recruiting firms that make permanent placements like we do. They pretty much focus on making placements in the largest law firms. And it's always been that way. And that means large law firms in big cities and they have large law firms in big cities have traditionally control.

[00:04:18]The legal market and who gets hired and smaller law firms and then law firms in niche markets. Typically didn't get the attention of recruiters and really weren't that used they didn't understand the value proposition because a lot of the attorneys came to them locally and they just didn't have the demand that large law firms, Ted for attorneys large law firms and major markets.

[00:04:39]Typically we use recruiters to generate what had been the money. They can make hundreds of millions of dollars a year with a good, with good right candidates. And so CA recruiters are traditionally in the largest cities and markets because that's where the buyers are.

[00:04:52] And. Just to give you a sense of what a big market would be. Urban Detroit is a pretty big market, but for years, there was [00:05:00] only one legal recruiter in the entire from just a solo recruiter working there because the market was so small and in major cities the law firms typically there's lots of recruiters because are competing for the same people and  large law firms.

[00:05:15]That use recruiters typically are the types that have had, major business. They represent major businesses. They pay high market salaries and, they're just the firms that are on the list of the most profitable firms and largest firms and so forth. And they're in practice areas like litigation corporate,  in real estate.

[00:05:32] And for the most part, they don't represent consumers. They only represent large businesses or, companies that you're generally heard of. And and then they have a fairly sophisticated recruiting departments and those recruiting departments.

[00:05:45] So a lot of cases are staffed by former lawyers, other big firms, and and they demand that they send them large. Candidates from large firms and top law schools and and that sort of thing. And then and then they won't really look at a lot of [00:06:00] times attorneys coming from inferior law schools or law firms and so forth.

[00:06:04] And and they have access to lots and lots of money from their clients to get the best attorneys. And so early on I taught myself something that I use to guide my work. And it was that large law firms. That we'll hire through recruiters are typically going to have clients that are going to be writing checks from, no problem writing checks for 50 to $250,000 per month without really even questioning the bills.

[00:06:28]They're just very flushed clients. Money's no issue. And so they're typically large businesses that those types of law firms represent with high or highly successful entrepreneurs. And and because everybody's going after the same candidates and working for the same firms what happens is the, in the largest city, it's like New York, it's not unusual for, if there's an opening comes out for,  an attorney to get 10 calls and emails and so forth for every opening that matches them.

[00:06:54] That's just, it just happens. And it's always happened and the same thing and a lot of other markets, but. [00:07:00] What's really happened. It's interesting is over the past several years, and this is where this information is going to start getting useful this isn't really how people are getting placed anymore.

[00:07:10] It's a very hard way to make a living calling people. And we have recruiters that have been doing That type of recruiting that started doing it even in the 1980s. And and they've gone from making, 15 years ago, like 30 placements a year to only making a few now because it's just, there's so few so many people going after the same people for the large firms, so that doesn't really work for recruiters anymore.

[00:07:35]As much, and it certainly, there's probably some people with great phone skills that works, but it doesn't really work. Most recruiters believe that yeah, firms are only interested in attorneys or most recruiters. I'm sorry. Believe that law firms are only interested in attorneys matching their actual openings.

[00:07:49] And therefore, for the law firm doesn't have an opening. And the turn doesn't match what they're looking for. The recruiter is not going to try to.  Get the person interested. So that's one of the [00:08:00] characteristics of what  they believe law firms are interested in, they also believe that they're only interested in and he's coming from the best firms that are going to get jobs with large law firms.

[00:08:08]So only people from the largest law firms and not smaller firms are typically recruited. They want people from the best law schools are the top of their class. It's funny, I've always heard. People that are recruiters that are not even go to law school, always put down attorneys for not going to good law schools.

[00:08:24] And it's just, it's ridiculous. It's but I guess it's what it is, but that's typically because those are the people that would pay their bills. People would be interested in people from the best law schools or top law schools and other schools. Yeah, for top students from other schools. In addition typically if an attorney has between two and years of experience they're marketable if they have less than that, they don't really, a lot of their time has to be written off.

[00:08:47] They still need trainings. They're not marketable. And and anywhere between a one and six years of experience is typically good. And then over six years of experience recruiters typically are not interested in them. Because they're threats [00:09:00] to partnership and so forth. And then economically appropriate practice areas is another thing during a good economy.

[00:09:07] The most economically appropriate practice areas are always things like corporate or anything deal related. And so recruiters will be very active recruiting corporate people will good economies. And then and low interest rate environments. It's always been that real. Estate's been busy.

[00:09:22] And then when the economy is slow and having a bad issue, issues, bankruptcies generally busy. And then also the right practice areas there's certain big firm practice areas corporate real estate intellectual property litigation finance, and and then law firms have typically not like candidates coming.

[00:09:42] From consumer-facing practice areas, which are things like personal injury, immigration trusts and estates, Amway laws. So they those types of recruiters are candidates are often in the past have not been placeable. And then law firms also want to hire people who look like they're committed and it will stick around.

[00:09:59] And because it's [00:10:00] expensive when you hire people that are likely to leave. And so they look for stability or reasons that  the person's likely to stick around which we could be if the person's, for example, moving home to their home market from a major market, or if they're already in the market or if they're leading their perm for good reasons.

[00:10:18]And then in large cities law firms have always been interested in. Partners with a lot of business it's got the most prestigious firms and several million dollars here these days. And when I started, it was like one to two, but now, a lot of cases they want even more in some cases, even 10 and law firms want, when they hire partners, they want them to be self supporting to get work to their associates.

[00:10:41] And then they want to give them about 20 to 35% of their collections. And then the rest goes to support the firm. And then law firms traditionally have shied away from unemployed attorneys. They just believe that they're not committed. There may have been problems with their previous firm and so forth and and they, there could be, issues.

[00:10:58] And then the fact that they can't get a job [00:11:00] or having problem getting a job. Sometimes says something to their their ability to advocate for themselves. And then always  the, one of the more important things has always just been  the cost vacations, the attorney, not necessarily the personality and qualifications always taken been the most important thing for a lot of attorneys a lot of law firms hire an attorney.

[00:11:20] That's not necessarily the case. But these are the things  that law firms are traditionally wanted. And I spent the time just now going through those, because that's just, those are the rules that people have always followed in this industry and the legal recruiting industry.

[00:11:34] And literally since the industry started, which was in the late 1970s, early eighties, But, now the whole thing's changed and it changed this year. In 2020, almost everyone was buying everything, meaning, personal injury attorneys, we're hiring through us family law everything.

[00:11:52] And and all of these consumer oriented practice areas senior attorneys were getting hired. I've just never seen a market. So open to using [00:12:00] recruiters it's it was as if So the whole thing changed and  and the other thing that was interesting too, is that over 50% of our placements this year and the numbers been creeping up for years, but over 50% of our placements, even close to 60 were at firms that didn't even have openings.

[00:12:15]It's just a very strange market and No. And honestly the good news is if you don't think you're marketable or or you don't think you can get a job either. I believe that almost everyone that was not marketable before is actually now marketable.  The market is that different than does it mean You're marketable because large law firms who suddenly changed their hiring standards.

[00:12:35] But what it does mean is that that the market has opened up significantly and there's a lot more demand from different types of firms for our services for one that are, the people.  We've traditionally upset a lot of people because as recruiters, we've always followed that model of wanting people from big firms with a certain amount of experience, with not a lot of moves on their resume and all these [00:13:00] things that I talked about a minute ago.

[00:13:01] And and so we used to reject people. And and, literally, almost every person that came in, we would pride ourselves on how selective we were and of candidates, and only represent certain types of people. But the market has shifted so dramatically that at the end of this year, I literally, I spent  the week after after Christmas, between Christmas and new year, we just working on updated communication.

[00:13:26] So we're not rejecting anyone because everyone now is placeable, every market is open to candidates. It's we've been making placements in Arkansas, New Mexico, and all these places that I've never even known before to that would use recruiters much less get multiple interviews.

[00:13:43] And we had one person from Colorado that was a family law attorney gets several interviews in rural Wisconsin. It's just strange. It's not the market is not like it's ever been and yeah. Years ago our, the people working here used to be snobs, and we used to believe that only the best, the best pedigrees where the [00:14:00] people worthy of our attention and and recruiters here, typically will look down on someone that they didn't follow the  the typical candidates people were looking for.

[00:14:09] And we rejected so many people that, job boards, attorneys, and others believe we weren't even a recruiting firm.  They couldn't understand. Why we were not working with more people. And the reason why is because there just weren't enough buyers there weren't the firms weren't buying only the firms that were buying before with the largest law firms and the largest cities.

[00:14:29] But now that's just completely changed. And I'm going to show you a bunch of. Statistics but it's just, it's been opening up considerably over the past several years. Niche markets and practice areas are getting very busy and they got even busier this year which were one thing.

[00:14:44] And then, this year in 2020, we were actually placing law students or people that had just graduated from law school and hadn't had jobs with placing. Lots of first-year attorneys, we've placed numerous clerks people clerking for bankruptcy, judge, even magistrate clerks.

[00:14:58] And we [00:15:00] placed lots of first-year attorneys. We play several senior attorneys, meaning people in their seventies with no business. And we placed lots of attorneys and consumer practice here, or consumer practice areas like workers' compensation tons of family law placements and more. And and we had, W, phones are just ringing constantly with law firms and the types of law firms who don't normally work for asking us to hire asking us to send the people.

[00:15:24]But in contrast to all this the largest law firms slowed down a lot and I'm going to talk about why I think that happened. I don't know if they slowed down in terms of all their re-up and. Definitely slowed down a lot of their lateral hiring. And I think that if people weren't laid off, I think there was a lot of the movement from the larger law firms slowed down as well.

[00:15:42] I'm going to talk a little bit about a ranking system that we've always followed with the attorneys that apply to us and how they're ranked. And this is based on Pretty much. It's how Harvard used to rank candidates. I don't know if they still do that come into them, but it's a ranking system between one and five.

[00:15:57] And and the reason I'm telling you this is [00:16:00] because I want you to see the types of, the different types of attorneys out there and the what. How they're looked at and and who's, placeable and who's not and who has been placeable in the past and who's not.

[00:16:11] So a five candidate is typically what you consider, like very big firm material. They yeah. They went to good schools. They're very suited to practicing law. You can pick that up in an interview with them, that professional motivated when they're leaving, they're not leaving due to problems relating to other reasons.

[00:16:26]When they're relocating, they just, the reasons that they're leaving firms tend to make a lot of sense know partners they tend to have about, at least 3 million in business and work with large national clients if they're associates about one years of experience.

[00:16:38] So those are the best people in the market, and those are. The people that most recruiters traditionally gone after, and those are also the people that the large law firms want, and it doesn't have to be 3 million of business. It could be two, but it's but those are the, what everyone's looking for.

[00:16:51] And then candidates who are forced typically will work in a four or five firm. And we have a similar ranking system for firms, which, you can get the idea [00:17:00] based on this or what those are like, I'm not going to spend time going over that, but for would be someone with strong, but not strong enough to get into the bearish strongest firms.

[00:17:10]And they're just.   They're good, but they're not like, exceptional. So just think, someone that went to a,  a good law school, but may not have been at the top of their class, may not work at one of the most competitive firms that working at a very competitive, AmLaw type firm and then threes are strong.

[00:17:25]But generally they're not as strong. They don't. They probably don't have the academic qualifications to get into the very, the top firms they are good attorneys and there's usually a couple of things that make them not suited to work in the largest and most prestigious firm.

[00:17:39] And they may not have done well in law school or law school might not be that great. They may have moved a lot. Might just be in a bad practice area. Maybe not been a summer associate or have too much experience or something or be a partner without that system. So those are threes. And then the two is just  what, Just  most attorneys are too, so it's nothing wrong with being a two.

[00:17:59] It's just [00:18:00] that's that there's just nothing, spectacular and their background. They may do a mix of business and consumer oriented work. It's just the majority of attorneys and a lot of it is going to be for low plate clients from individuals many times.

[00:18:13] They may not be able to fully do litigation or document transactions. There that work may be a little spotty, meaning there's going to be there'll be errors and things that attorneys from big firms would just, poke through. And it's not that they're bad attorneys, just that they're not as well-trained and their work isn't as  flush or as good as it could be.

[00:18:33] And and one of the reasons people work in large law firms is so they develop the skills that a two attorney would have and and that's just that. And then the one it's just someone with a lot of problems. Someone with that may have taken a lot of time off, they went to average port law schools.

[00:18:47]They'd never had any real training or haven't been trained. They are hired by firms that don't really have standards for the people that they hire. And they may not have a qualification to work most law firms, and this is the [00:19:00] majority. Of attorneys and small firms around the country and majority of solo practitioners, there's nothing wrong being a wan.

[00:19:06]You're still good at it. You can still be good. It's just that generally you would not be marketable through a placement firm and almost all the interviews that we've ever had in the past, it had been three or four and five candidates. So those are people, very good backgrounds.

[00:19:19]In 2015 through 18, it was about 85% of our candidates. If you fall into the four or five range, you would be marketable by us. And then the previous years, it was well in the ninth percentile. And then when I started at this job which was a long time ago 2000 or something, it was well into the under the ninth percentiles, but let's look at what happened in 2020.

[00:19:39] And this is what makes this just so extraordinary. 7% of our interviews almost were with one love, one rank candidates. This means that not one to 10, but a lot of people that. Honestly had no idea what they're doing and didn't have very good work product and so forth. We're getting offers.

[00:19:58] We're a permanent placement [00:20:00] firms, so we make permanent placements. So these are people that. Have very spotty work histories. They were getting permanent placements through us. One rank candidates to rank candidates, mean people that, you know, that if you were to read their work product, there might be some issues with it.

[00:20:16]Pro probably wouldn't be and  we're getting interviews through us and, that's 22%. This is amazing. And if you think about that, and then, yeah. And then the three candidates, which are the majority of candidates, look at the placements, the number of interviews they were getting.

[00:20:30]It's almost, 39, 33%, which means this is your average attorney. So are all of a sudden we've gone from, from an area where, you know, 85%. Of our placements for all and interviews were informed and fives and suddenly we're in the exact situation, opposite situation where.

[00:20:52]67% are of average too. Not very good attorneys. And I, these are just, we're just doing this because we're getting, this [00:21:00] is the market feedback we're getting. And I think it's, I think it's just amazing. I don't I don't understand it. I, I. But it, this is what the story is.

[00:21:07] And I've been through these numbers several times and it's it's what it is. So what this means all of a sudden is that there's a lot of demand on the market for attorneys that aren't necessarily coming from the largest firms. It also meets, and there's a lot of ways to look at this information.

[00:21:22] But it can also mean that the hiring slowed down a largest firms, which could be because of overhead and so forth and less movement when people are making more money and in the largest firms and all sorts of reasons. But whatever, the reasons that this hiring has changed dramatically. And so because of this, I honestly, everybody almost everyone is marketable.

[00:21:43] Even people that don't believe their marketing we used to tell people, to go look LA crossing, which is another company that we have. If we didn't, if we couldn't help them right away. And it was a company was initially set up to help people. We couldn't get jobs for BCG or that we didn't have [00:22:00] anything for at the moment.

[00:22:01]And the tradition just been a very massive Arkadin inefficiency. That's made our jobs difficult because we could only place the best people, but now almost everyone seems to be marketable. It doesn't matter where they live their practice area or in many cases, their seniority.

[00:22:16] Now that's not to say that we can get every single person in that job, but it does say that the market has opened up in a major way. And despite less hiring to 2020  even the larger law firms were often willing to bring in candidates that traditionally would not.

[00:22:29] So traditionally,  the largest law firms would only interview four and five candidates who may be very rare. For someone that was like a three or two,  to get an interview at a major law firm. And these, keep in mind, again, all of our interviews and placements. These are for, like associate and partners positions.

[00:22:45] We're not placing, we don't place contract attorneys. We don't place,  attorneys and temporary roles who only place permanent positions. But look at these interviews. So 18%. We're fives which is, fine. And 4% were forced, but look at the [00:23:00] threes, 39%. So larger law firms were actually yeah.

[00:23:06] Larger law firms were actually interviewing many more average people and I don't understand how a one got into a law firm or how many ones. So that's a lot of ones because we have, Hundreds or thousands, interviews throughout the year. But but even they were inter even interviewing once.

[00:23:21] And sometimes that could be something like in patent prosecution or something that where the person may have rare skills, but even ones were getting interviewed by large law firms. The majority of candidates that were getting interviews were three, meaning there was something a little, they weren't.

[00:23:36] They weren't,  the type of candidates and traditionally get interviews. So that was very interesting. So even large law firms were becoming much more willing to to water down their traditional hiring criteria, which again, this is not something I expect it now is some of this due to us being better at what we do.

[00:23:53] Some of it is we're  we're spending a lot of time making sure that our recruiters are, marketing people a [00:24:00] certain way.  We have a lot of statistics that we track our recruiters and how they're doing, and we're also, becoming very good in terms of our research.

[00:24:07] And we've been doing this a long time, so our research keeps getting better and better, but but th the same time, regardless of what we're doing, the market is buying. And I think that's what makes it very interesting, larger law firms. Are hiring people with qualifications that they wouldn't necessarily have in the past, which is interesting.

[00:24:25] And then Which may mean can mean a couple of different things. It could mean that there's more demand or it could mean that they're just more willing to look at people and think outside the box. But it's  it's very interesting and and I would, say this is a sea change.

[00:24:40] The market, in some extent we made just as many placements last year in 2020 is we made the previous year. Now there were fewer placements at large law firms. So it didn't have a major effect on our revenue, but at the same time it definitely there still is many placements that could be made.

[00:24:57] Out there,  it's almost as if the [00:25:00] fabric of the legal markets change and and more types of people are employable than ever before. And it's almost like a social movement or something. I don't know what's going on, but it's changed. The market itself. And even in the week before Christmas one of our new recruiters, meaning a recruiter that's been with us less than six months, made four placements in the week leading up to Christmas.

[00:25:18] And then I think in the week after Christmas, she made a placement. And this is someone that, has been trained and working with smaller firms and so forth. But it's just if attorneys know where to look then you can be very successful. I was funny. I was talking to a Very successful partner over the weekend that has a major book of business.

[00:25:35] And he was saying to me I was like, how do you get out of this work? And he's  cause I'm not afraid to, pick up the phone and just, call the the CEO of a major corporation or the general council. And tell them about myself and ask for work because no one does that.

[00:25:48] Everyone thinks you need to go through channels. And in this market, I would encourage people to. Apply to as many places as you can, because even if you don't think you can get in there you, you may be very surprised.  Just have never [00:26:00] seen a market that is really this open to hiring people.

[00:26:04] And this is more that I've seen in my career.  And the thing is too, is law firms are also doing a much better job of getting their jobs out there. They're posting jobs on career sites. They're posting their jobs, publicly and job boards, and many attorneys are applying to these jobs regardless of whether or not they have openings, but there's still doing a lot of buying.

[00:26:23]So this is some of the hiring an interview statistics, bye. Back to Syria. And I'm going to this is all by the way, going to be published. And  this what we'll be publishing this. On our site shortly but you can see here some of the growth and practice areas workers' compensation was a very active practice here for us.

[00:26:43] And there was a lot of growth and then certain practice areas like tax went down dramatically  patent agents typically is the only non,  attorney thing we place other pro other, which means other very niche practice areas litigation even increased labor and employment went down quite a bit, which we didn't expect [00:27:00] patent prosecution  increased which is interesting.

[00:27:03]Typically there's less investment in that kind of stuff during that sort of time all forms of IP increased. Bankruptcy  there's definitely some growth there and then other things like you would expect like entertainment, not doing well and that sort of thing.

[00:27:18] So this again, will be published. Antitrust went up quite a bit. And then and then these are the, just the placements. The former was if you look at the placements which increased the only play only practice areas that really went down in terms of placements were tax municipal law, labor and employment was down a lot.

[00:27:35]Turns defense and coverage. Healthcare was down risks and executive compensation. Entertainment was down corporate was down and construction and banking and finance. But other than that, there was a lot of growth in terms of placements and in almost all practice areas.

[00:27:50]And then these are interviews same thing happened. You can see where the interviews were down. But look at some of these practice areas. It's very interesting. If you look at what happened to family law, family law. [00:28:00] Went up by 750%. Immigration went up by 250% and that's despite the fact that there was a  the borders were closed.

[00:28:09]Who can figure that out? That's insane. And then education even went up and that's, despite the fact that schools were closed.  Lot of stuff in healthcare went down Despite the fact there was a healthcare crisis, labor employment went down, which was unusual because you would think that labor and employment will go up.

[00:28:26] People are losing their jobs, but that didn't happen.  That doesn't make a lot of sense. And then these are some regions in terms of what happened to us regionally where the interviews and so forth by region. You can see here and I think these are pretty good statistics.

[00:28:39] Our recruiters work all over the country.  You can see that the Midwest was very slow. The West was it didn't really grow very much in terms of the number of interviews. The Southwest  did some to some extent and that's by region. And then and then you can see here, these are growth and so forth by region.

[00:28:56] I'm not going to get too far. Into this right now. You can just [00:29:00] review this for your practice here, but I will send this over in this when this comes out, it'll come out on I think probably Friday or Saturday, we'll be publishing this on our site. And these are growth and areas by different practice areas by region.

[00:29:15]Okay. Now I'm going to start talking about what I think is the most interesting portion, and I hope that background I gave you it's helpful to understand how much the market's opened up and whoever you are. This, I think it's very good news because typically,  these have been very dry conversations where  the news wasn't that great for a lot of attorneys in the past.

[00:29:33] I think the news this year is.  Very interesting. When the virus hit initially, I know a lot of people didn't understand what was going on. And I did a, a long webinar and I did some videos on it and I did wrote a long article about it. And I just, most of my conclusions were that it was going to be a normal recession.

[00:29:52] I've made some something, I had some other conclusions that were to do with zombie companies that were being supported by loans and so [00:30:00] forth. But for the most part, I, I expected, a fairly normal recession, I didn't think that much would be different than what had happened in the past, but I'm gonna List five reasons I'm going to break this up this five or six assumptions that I'd always made in the past and what happened.

[00:30:15]And then I'm going to list the second section. I'm going to talk about some reasons that the two 20 to 2020 market was much different than I ever could have anticipated. These are just things. And this is by the way, if you're. Watching this, or if you're a young attorney there's a lot of things to learn here because  there's patterns that repeat during recessions and it's good to be prepared.

[00:30:37]If you're a corporate attorney, knowing if you're in a recession, that's a good time to, To make sure that you have a job in the air and a safe place when, because there's always a lot of layoffs with corporate attorneys pay sessions and there's just rules, but things that happened at recessions.

[00:30:51]But these are some assumptions that I've always made in slow economies. Make the following assumptions. So in a slow economy You assume there's going to be a lot of layoffs in large [00:31:00] law firms. And small law firms would take work away from large law firms.

[00:31:04] And and the reason for that is just because large law firms are looking to cut corners, looking to cut costs. And so they can use recessions as a way to get rid of poor performers attorneys that are critical and other people that they want to get, the people that partners who might be overpaid You know, and then sometimes we'll even get rid of practice areas, and the reason for this is that the companies tend to start watching their legal bills more closely. So they this whole concept of waterfalls and money that I talked about earlier, these companies that are, no problem writing checks from 50 to $250,000 or more per month without even thinking about it they start managing their expenses a little bit more closely, and this can adversely affect the revenue at law firms.

[00:31:44]And  what I assumed happened larger law firms did lay off a lot of people and but not as many as I expected and the largest markets really were the worst for layoff. So if you were in a major market, I used to at a much a much better chance of losing your job than if you were in a smaller [00:32:00] market, smaller markets, for whatever reason.

[00:32:02]Probably because of a lower cost structure in the or salaries and the fact that people tend to protect each other more are always more isolated from my office when things get slow and.  In terms of smaller law firms though  the work picked up a lot and much more than I could expect it.

[00:32:17] Many of these firms just barreled through the recession and just kept sending us job orders and they were coming from all over the country. Small towns in Nevada. You name it. Hawaii and ordinarily Smaller law firms don't use recruiters, but here they were just very eager to use recruiters.

[00:32:31] And and the majority of our placements were with smaller to mid-sized firms and large firms were hiring, but. I believe they were more negatively affected by the recession probably because of their cost structure with offices. And, she'll talk about it a little and lots of staff than others and and smaller law firms who are enthusiastically use recruiters.

[00:32:51] They didn't, they were just very interested in hiring people. And and here's some information about I'll show you a table [00:33:00] later in the presentation about firms interviewing people in different sizes. But this was very interesting. If you're a smaller law firm I think that.

[00:33:08]It would be smart to hire more attorneys. Right now, if you have to work, I think that small law firms have an opportunity to grow. I think that they're taking a lot of work away from small firm, larger law firms w what happens a lot of cases as companies and other people will send a lot of work to smaller law firms because their billing rates are lower.

[00:33:28] And so they're just trying to save money. And so that's happened a lot with smaller law firms. I also believe that, this virus and everything associated with it will probably be going on for several months, if not a good portion of this year. You should seriously consider working in smaller law firms.

[00:33:44] The most important thing for any attorney is to stay employed. It's more important than where you're working and to get experience. And small law firms are hiring in smaller markets and. You really have an opportunity in a small firm as well to build a book of business, which you may not [00:34:00] have in the largest firm.

[00:34:01] I also assumed that in addition to smaller law firms and smaller markets that work with slowdown in major markets for lateral attorneys and get busier in smaller markets. And just like I said, a second ago, the, the billing rates are lower legal work doesn't necessarily stop because of recession.

[00:34:15] So companies will send work to smaller. Less expensive firms and they're off those firms are often in smaller markets. And again, smaller markets are busier than ever seen. They were just very hungry and and even in markets like, I had never even heard of cities of 10,000 or less people.

[00:34:31]We had some candidates that were getting multiple interviews with every firm in the city and it's just, it didn't make it. It's just like nothing I've ever seen. And we were talking about Marcus, like Aspen and, just places that. You typically wouldn't think that there's a lot of legal jobs.

[00:34:43]And  believe that if you're a law firm in a smaller market, you should be hiring as many people as you can. You can grow and hire. Talent attorneys, you might not otherwise be able to attract and and if you're interested in relocating or you're trying to stay employed, it would make sense to expand your search to [00:35:00] smaller markets.

[00:35:00]You really have to look at smaller markets there's this is where the activity is. And I do believe that there's probably going to be more of a permanent move to, to virtual people working virtually and from home then there's that been a lot of these office parks and stuff would become ghost towns.

[00:35:15] And I think that people are getting used to working at home and setting up home offices and so forth. And and and I think that they're going to want to continue doing this.  And this is some bad news. Sure. A junior attorney I expected as happens in every recession, a lot of first-year layoffs.

[00:35:32]I also believe that there would be a massive cancellation of summer programs that summer programs would be canceled all over. And and and it's exactly what happened.  The reason that law students, recent graduates and junior attorneys tend to be laid off or lose their jobs is because they require a lot of supervision.

[00:35:53] And and the idea that a law student could do work at home I'm supervised has just doesn't make any sense. And [00:36:00] they need to be able to ask questions and. A lot of learning comes from interacting with other attorneys. And a lot of their time needs to be written off even when they're in the office.

[00:36:09] So junior associates. Many times are not marketable. A lot of people in summer programs don't make money for firms, so they canceled those. And  when they're trying to save money that the summer programs are often the first to go and and junior associates as well.

[00:36:24] And when I gave a presentation on this early in the coronavirus, I was. Attacked by several law students or junior associates believing that this wouldn't happen and I was wrong and so forth. But and I wish I was, but this is exactly what happened. We were seeing so many. Know, law students and 2020 graduates and others that haven't been able to find jobs.

[00:36:43] And it's not a good situation by any stretch of imagination. Most law firms did cancel their summer programs. So the major firms there were lots and lots of layoffs and many more laps and I've seen it in the past.  Advice for law firms that is that, I don't think it makes [00:37:00] sense to cut down all of your your hiring necessarily.

[00:37:04] I think that that if you do that, then  you're going to be in trouble later on what happens is. The, what the market will pick up again. And when it does all these people will be in demand. It'll be much harder for you to make money.  Would, if I was a law firm, I don't think I would be canceling my summer programs for letting go of all my junior associates.

[00:37:23] I would try to find other work that they can do to help the firm. And I think they should be careful that would be my advice. And find other work that they can do or other ways you can help your clients do things. That may not necessarily be billable hours who build your brand or marketing and all sorts of things because the cost of an attorney is very high, but there's also a lot of works that they can do that they might not normally, that you.

[00:37:45]In any way. And then and then I also think that attorneys should be careful about the law firms. They join and join ones where they're going to be safe. You're much better off being in a affirm where you feel like you have employment stability than one where you lose your job.

[00:37:58]All sorts of people go into these [00:38:00] major markets, whether it's New York or. Or Palo Alto or Chicago, and then they moved there from other parts of the country and then they lose their jobs, which is not pleasant. And and because of there's so many attorneys in large markets when markets do slow down, it becomes even harder to find a job in a large market than it might be.

[00:38:18]And a smaller market. Than it would be because there's just so many people can, competing for the same positions. So I would be careful about the markets you joined, you shouldn't, or the firms should join, you should join someplace where you feel like you're going to be safe.

[00:38:31] And and if you're at a firm where you feel like you're not safe, you shouldn't think about. Markets that you will be safe. And people like are always very concerned about how much money they're gonna make and things like that. But honestly, like in a smaller market, you don't need to have a lot of money to feel like you're doing well.

[00:38:48] And or even in a smaller firm. And the difference after taxes and stuff of even a 50% salary difference, isn't going to make a huge. Difference in your life. And especially for younger [00:39:00] attorneys, your goal is really to to learn the trade, to get as much experience as you can. And if you're laid off can't stay employed in a large firm.

[00:39:07] That's not a good thing.   Also assume that larger law firms will slow down in specific practice areas. And I talked about this earlier, like corporate and other practice areas pick up like bankruptcy, litigation and employment, and then some practice areas remain steady. Like Pat. And and this is typically what happens.

[00:39:24]Corporate always slows down during recessions because there's not as much deal activity to companies don't want to do deals when money is tight and buyers in the side and so forth. And then raising money is more expensive. Bankruptcy picks up because companies go out of business and this creates bankruptcy work.

[00:39:40] Litigation picks up because companies look around at other companies who may have wronged them in a good economy. And then when the economy soured, they may have started filing lawsuits. This increases important condoms, and then often decreases a good economy when good, when, people are more likely to brush stuff off or the pursuing lawsuits, because, [00:40:00] they, there's more, it's better for their time to worry about making money than what was taken from them.

[00:40:05] And then employment just tends to pick up and bad economies. When people lose their job employment becomes a busy practice area and and then employers need to counsel employers about how to reduce head count and that sort of thing. And then real estate tends to if the interest rates stay low and there's not a recessionary environment, army inflationary, but if a high interest rate environment then it can do well.

[00:40:27] So this is what happened with corporate in corporate. We saw  slowdown, but it wasn't really anywhere near as much as I expected. And, you have to keep in mind that a lot of this, these statistics are our posts pre COVID versus, post COVID. But  some practice areas actually got very busy capital markets got busy and almost all forms of corporate work continued.

[00:40:48] So it wasn't if you look at 2019 versus 2020,  the plate number of placements was down significantly. And or the number of interviews, but it wasn't nearly as bad. As I would have expected it to event [00:41:00] and in some markets like New York and the Bay area they still had work and they were still hiring people.

[00:41:05] Whereas before on previous recessions the New York and the Bayer always been really good barometers of. What's happening in the economy because things tend to happen there. First, when there's recessions, Texas is always lagging and then oil and gas prices are high. It's it just barrels through recessions.

[00:41:22] But this time all three were fine.  Real estate surprisingly got more busy. I  don't understand that. It just seems to me like, the sudden high number of vacancies and reduced VAT, values and nervousness that it would have gone down. I don't, I'm not an expert in the economy by any stretch of the imagination or how real estate works, but I would have expected it to go down.

[00:41:45] It actually went up to terms of its activity. You can see that there. Litigation, I became very busy in smaller firms, but in larger firms, it it really slowed down. Massively, to the extent that certain markets and large firms like New York, Chicago were [00:42:00] just dead. They they were, I've never seen him that bad.

[00:42:02]Los Angeles was even slow and large law firms  just became very out of favor. I don't know why that is. I don't. No why large law firms  We're having so many problems and it was almost like the litigator sometimes for the best publications were the most out of favor.

[00:42:17]Here's what happened in litigation litigation by the way is always the most busiest practice group. And it's the busiest practice group because most attorneys are litigators. And last year 36% of our placements  and 38% of our interviews were with litigators and that definitely increased quite a bit.

[00:42:35] And  and but most of that was driven by interviews at smaller law firms. And bankruptcy on nothing much ever happened with that. It just didn't get that active.  Assumed that there would be widespread bankruptcies and corporate failures and and and I just didn't have any.

[00:42:52] Idea that things would slow down as much as they did. And and we recruited bankruptcy clerks and current bankruptcy attorneys and [00:43:00] other people because we anticipated there was going to be a huge boom and we had a massive stable of candidates. At one point, we were working with an awful lot of candidates and we placed a lot of clerks which we've never had before.

[00:43:13]Bankruptcy clerks. And I think in previous years we never placed bank credit cards, so there was work but it was much less than we expected. Now you can see that it certainly compared to prior years did grow an awful lot. Our 4% of our placements were bankruptcy versus 0.6, 7.7 for for interviews and the previous year.

[00:43:32]So we were doing very well. In bankruptcy and it did increase by, what does that 10, 20 times in terms of, I dunno, 10 or, five, eight, seven times or something, but, so it was very busy, but it wasn't, I expected just a massive rash of bankruptcies and and we didn't see that.

[00:43:50] And then labor and employment was very unusual. I thought labor I'm very busy. I thought that people will lose their jobs and start coming after employers. And there would be a [00:44:00] Bonanza of legal work for employment lawyers and this just never materialized and. And and at least I didn't see the hiring tobacco it up.

[00:44:09] And so we recruited labor and employment attorneys very aggressively. And but they were just very much less successful. Our placements, you can see here in 2019, a 17 and a half percent of our placements were. Labor employment attorneys and then, and 2020, it was 6%. And then in 2019 we had 12% of our 12 and a half percent were over interviews.

[00:44:31] And then it went down to 4%. So labor and employment just slowed down. It came to a screeching halt compared to where I'd been before. And believe that if you're a law firm it's probably the best idea to look at that demand because of the demand is something that tracks what's going on in the market and you should be hiring and markets where there's demand and and in avoiding.

[00:44:54] Markets where there's not demand. And I also believe that attorneys should be careful about the [00:45:00] practice areas that they're in and the firm they're practicing it with. And if you're a bankruptcy attorney, or, whatever your practice area, you want to be very careful about the practice area.

[00:45:10]You know that your rent and I'm going to do this fifth one, and then we'll take a quick break and then come back and do the, some other assumptions that didn't. That we didn't, I didn't think of this year. So the fifth thing that happened is I assumed that laid off attorneys would have a difficult time finding new positions, the equivalent firms ever again.

[00:45:28] And this is just something that's always happened when when, when attorneys lay people off it's very bad for the attorney laid off traditionally because there's a perception that they weren't valuable enough to keep around that they didn't have. They may have done something wrong, they didn't build the flowers.

[00:45:43]They may have an attitude problem. They're not good politically. There's just all sorts of kind of warning signs that, someone's been laid off and that's, unfortunately, what's happened in a lot of recessions. In 2000, 2001 and 2008,  when people started losing their [00:46:00] job, a lot of those attorneys that were especially junior associates that were corporate attorneys and stuff, couldn't find jobs and did things like move home and started other careers one guy and I became a truck driver human in a major New York law firm.

[00:46:11]It's just, it's, it can be very hard when you lose your job. And and it's always been a challenge even in recessions and because law firms just avoid them. They assume that they may have sour grapes or I don't know. Or they may take a job, at a firm that they normally wouldn't and then leave when things get better.

[00:46:28]So it's always been a challenge, but.  This time, it was great. Law firms showed a surprising, willingness to hire unemployed attorneys and enough law firms. Let people go that it wasn't really that much of a black Mark and it made it. Making hiring impossible in the past. Now there are certain markets like New York and the Bay area and Chicago and Houston, to some extent, where there's just so many people in the market that law firms still prefer employed attorneys, but.

[00:46:58] At the same time, even in those [00:47:00] markets, people were getting hired. So it, this is really a good thing. I think that a lot of law firms realize that this virus is what drove in it, wasn't performance. And and it's just not really as negative as it once is it once was, and that changed this year. I had never seen so many unemployed people hired in the past.

[00:47:19] And one week we had one recruiter. A very good recruiter of ours placed I think over a 10 day period three attorneys that would good firms that were unemployed. And and there's been a lot of periods of long unemployment for attorneys. That really has changed and that's a great thing.

[00:47:35] So I think that law firms would be smart to look and unemployed attorneys, especially if they've lost positions. Now I do think that, if I was a law firm, I would, look at it, how hard is that person working to get a job and, and did they seem like they were a good fit and are they going to be grateful or are they just going to be.

[00:47:51] A problem, you get a sense of their attitude. But I would definitely look at unemployed attorneys very closely. And I think, if the attorneys lost their [00:48:00] job before, I think a lot of it, especially if they're motivated and they did lose it because. The law firm just didn't have the work they're going to come in and do an even better job than they might've normally done.

[00:48:10] And they're going to take it. They're going to be very grateful for the work and not take it for granted and they maybe stand up performers. And then I believe that if you've been laid off, you need to go all out and get a job. So you need to look at openings, non openings, remember 50% or more of the placements that we made the share with the firms.

[00:48:28] That didn't have openings. So that means that firms are hiring opportunistically and also hiring opportunistically through recruiters. Meaning we're identifying firms that we think would be good fits. And even though the firm doesn't have an opening and they're saying, thank you, that's great. We'll hire that person.

[00:48:43] And we're also going to pay you a finder's fee. So that means that there's a lot of work out there and you should be applying a foreign wide to law firms. As much as you can. Okay. So I'm going to take a quick break for about two minutes to give everyone time to take to take a quick break and get some I'm going to [00:49:00] get some coffee.

[00:49:01]Also I, right before the start, it was pretty funny. I got bitten by a dog. Like two minutes. I was almost late. I was playing with a dog But anyway, so I will be back in about two minutes and we'll take a quick break, then we'll come back into the 15 assumptions. And then there's and this will go fairly quickly and then just be prepared with as many questions as you want.

[00:49:21] And traditionally, I stay as long as people do have questions. So I'm happy to answer questions about the market or your career. Prefer to answer questions about the market to start. And then I'll answer career questions later, but I will answer all the questions today, but I'm taking a, take a quick break for just a couple of minutes probably.

[00:49:37]Let's see. Maybe like 1105. I might. Thanks.

[00:49:42]Okay.

[00:49:43]All right. So I am going to get started. And the next part of this presentation is the 15 assumptions I didn't make or think about that happened 2020.  So the various things that I, talked to you about earlier, I just couldn't have imagined happened. [00:50:00] And and, in.

[00:50:01] Because this is something I think that we haven't seen before what happened this year? There were definitely a lot of surprises. The first, the biggest surprise of all was the consumer-facing practice areas that got busy trust in the States, personal injury, family, law, and immigration.

[00:50:16]These typically are not busy practice areas for people in the legal recruiting and placement industry. And it's It's pretty easy to see why th  the fees aren't very high. The fees that the consumers pay consumers are limited. They can't continually write checks.

[00:50:32] They take a lot of t