California Regional Firms Expect to Sell Talent on Stability and Flexibility in 2023
The Recorder, December 30, 2022
By Jessie Yount
This is the second story in a two part series on Am Law Second Hundred and regional firm leaders’ expectations for 2023. Read part one here.
Despite layoffs that hit Silicon Valley lawyers in 2022, several firm leaders at California’s Am Law Second Hundred and regional firms have had little to say about layoffs. In the context of lawyer headcount, they’ve mostly talked about opportunities rather than challenges.
Hanson Bridgett, a California-based Am Law 200 firm, has “no plans whatsoever” for layoffs, according to managing partner Kristina Lawson, and she doesn’t expect to see widespread layoffs among midsize firms.
The firm leader said she’s hearing reports of continued strong demand for mid-market law firms, and the economic indicators don’t seem to warrant layoffs. “As a midsize firm, we don’t bulk up in terms of talent in the same way that Big Law does, for example, so we just don’t have the same sort of issues facing layoff potential,” she said.
Instead, Lawson and other firm leaders anticipate opportunities to hire well-trained and high-quality associates who’ve been laid off from Big Law firms or are disenchanted with Big Law.
“Last year was extraordinarily busy, which led some firms to hire feverishly and it gave people leverage to move,” said Jeff Patterson, managing partner of Allen Matkins Leck Gamble Mallory & Natsis. “Those firms may now find themselves in a position where revenues or hours per attorney might be slightly off.”
“My sense is that fast-boil has cooled,” he continued. “We’re returning to a more normal recruiting environment.”
At Allen Matkins, “our folks were working at a pace that risked burnout,” Patterson added. “Everybody is working at a more comfortable pace now, although we would like to see higher client demand than current levels. To the extent we can expand the business, hire more people and keep them busy at a comfortable, but not crazy pace, we’d be very happy about that.”
Cox, Castle & Nicholson managing partner Dwayne McKenzie agreed.
“We see 2023 as having more opportunities than challenges,” McKenzie said. “We expected that once the high demand for talent over the last couple of years tapered off, there would be opportunities to find and acquire excellent talent as firms that hired in excess right size.”
Cox Castle plans to continue its long-term approach to hiring, he said, with the hopes of finding candidates who will spend their career at the firm and benefit from the firm’s real estate-focused platform.
“Challenges remain the same, retaining talent,” McKenzie added. “But this is where our long-term view and commitment to professional development resonates. The stability and opportunities for growth that we provide looks even more attractive when other firms are conducting layoffs.”
Bonus: “You Get a Bit of Your Life Back”
While stability is no doubt a major draw due to current economic unpredictability, it’s not uncommon for associates to seek out the training and growth opportunities—and in some cases, the more reasonable pace of work—offered by firms that don’t fit into the Big Law mold.
Some midsize firms have said they’d welcome laid-off attorneys, according to Jenny Swan Meyer, the chief operating officer of Swan Legal Search. Meanwhile, others could see opportunities because associates might be disengaged with Big Law.
“Midsize firms offer an attractive sell—a true path to partnership, less conflicts, and potentially a lower hourly billable requirement,” Meyer said. “Compensation is generally lower, but you’re not billing 2,200 hours and you get a bit of your life back.”
Smaller firms also tend be less homogenous than Big Law, and thus more willing to experiment with different partnership tracks or billable hour requirements. Hanson Bridgett, for instance, rolled out an updated associate salary grid for 2022, with 12 tiers and ranges from $170,000 to $300,000.
The firm also launched bonus programs, such as additional pay for discretionary/extraordinary contributions, and a sabbatical bonus for associates who have been with the firm for at least three years. Lawson said the firm is not planning to make any significant changes to its associate compensation system for 2023.
“We may have a couple of clarifying tweaks made to our overall program because as you get into implementation, you discover a couple of details you may have missed as you were developing it, but we do not intend to make any wider changes to that compensation system or to the specific U.S. dollar figures in the salary,” she said.
Last year, associates in California jumped from Big Law to midsize firms because of the better work-life balance, flexibility and business training opportunities, they said.
One associate who moved to Los Angeles-based Greenberg Glusker Fields Claman & Machtinger last year described the firm’s culture as one “that gives you your evenings and weekends.”
“It contrasts sharply to the always-on culture of some larger firms, and that is tremendously helpful for unplugging and taking time to recharge,” they said.
https://www.law.com/therecorder/2022/12/30/california-regional-firms-expect-to-sell-talent-on-stability-and-flexibility-in-2023/