- Kate Reder Sheikh is a managing director in Major, Lindsey and Africa’s Associate Practice Group, covering San Francisco and Silicon Valley. Her focus is on providing a concierge level of service to associates and clients alike.
- She predicts that law firms may experience more layoffs in the months to come, as well as turn to touchless recruiting and smaller classes of summer associates.
- While traditionally the legal field has shied away from remote work, the pandemic has proved it’s possible and will only become more popular.
- “Law firm leases are huge resource vacuums, and if the demand for offices is down, it’s likely that firms may seek smaller, if not more modest, office spaces. A hot-desk system will probably replace the vaunted private office,” she adds.
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As we wait for a vaccine or a proven therapeutic to coronavirus, the law firm community sits in a holding pattern.
Associates, partners, and staff are working from home even as shelter-in-place orders are lifted. Each day, we get news updates telling us about salary cuts, furloughs, and the move to fully remote summer programs. It’s not hard to imagine that layoffs are close behind.
So, where do we go from here? What does the law firm of the post-coronavirus world look like?
Layoffs
Last year was a very healthy hiring year for law firms across the country. Per National Association for Law Placement’s “Perspectives on 2019 Law Student Recruiting” report, “Recruiting activity in 2019 was … robust, with offer rates coming out of summer programs reaching the second historic high in as many years. On many metrics, current BigLaw recruiting volume and practices resemble those measured before the recession.”
We were in a boom. It’s possible that some firms became a bit bloated and hired to excess. What will the adjustment look like?
It’s hard to believe that we won’t see more layoffs in the near term. Some firms that are well positioned will be able to take advantage of talent coming on the market. It’s likely that some of the talent that will be cut will come from the senior end of the associate spectrum — these are the most expensive employees, and partnership classes are likely to be significantly smaller in the years to come.
Firms would be wise to consider alternatives to layoffs, if possible, or at least a thoughtful approach to culling. As a 2018 article in the Harvard Business Review notes, “Companies that shed workers lose the time invested in training them as well as their networks of relationships and knowledge about how to get work done. Even more significant are the blighting effects on survivors. Charlie Trevor of University of Wisconsin–Madison and Anthony Nyberg of University of South Carolina found that downsizing a workforce by 1% leads to a 31% increase in voluntary turnover the next year.”
Layoffs can create a destabilizing cycle wherein the attorneys who’re retained feel both worried and angry and may jump ship at the earliest opportunity.
Leaner, touchless recruiting
There will still be targeted need for associates in the near term, though surely recruiting will be much quieter, likely much slower, and more cautious. Further, now that firms have seen that hiring via video conference can be effective, it’s going to be rarer for an associate to be flown in for interviews.
Before this pandemic, it was taken as a given that an in-person meeting was a required condition precedent to an offer. We will see this shift as a cost-saving and health-protecting measure, and as it’s now been demonstrated, it simply isn’t required.
Smaller summer classes
Firms will likely want to protect their statistics about the percentage of summer associates that are offered full-time positions, but to do so, they will probably bring in a smaller cohort to keep hiring at a sustainable pace.
Law school enrollment will likely continue to fall, as it has for the last decade — 2017 saw the lowest law school enrollments in 40 years — and 2021 may beat that 2017 stat.
There may be upside to these smaller classes for the participants — more hands-on training and more one-on-one attention. Further, mid-sized firms that survive the pandemic may benefit from the overflow of talented law students who aren’t selected to be summer associates at the top firms.
Remote working
Firms see now that remote working and providing top-drawer legal services are not mutually exclusive.
Some level of remote working will be here to stay. To the extent that there are technological gaps, Silicon Valley will rise to the challenge. Remote working provides protection for the health of lawyers and staff, cuts down on wasted commute time, and leads to cost savings on office space.
Borderless lawyering
In the last year, I assisted several Bay Area associates with job moves to much lower-cost cities (Boise, Las Vegas, etc.). Associates were finding that they couldn’t remotely afford what they wanted in terms of housing or schooling for their kids. There was already an exodus, and it will only continue after city living loses a lot of its luster in a world where population density is the anathema.
Will remote working lawyers decamp to Minneapolis, Denver, or Salt Lake City, but work for their San Francisco-based firms? It’s within the realm of possibility.
Smaller footprint
There are some truly glorious law firm offices, particularly among the upper ranks — juice bars, screened-in porches with a DJ’s selections playing, art collections worthy of museums.
Will this go away altogether? Certainly not. But in a world in which client meetings are also more likely to be remote, these show-pony offices lose some of their appeal. Law firm leases are huge resource vacuums, and if the demand for offices is down, it’s likely that firms may seek smaller, if not more modest, office spaces. A hot-desk system will probably replace the vaunted private office.
Law firms tend to weather downturns better than the overall economy, and the recent boom years should have left our most valued firms with war chests to ride out this unprecedented pandemic.
However, it’s hard to imagine an immediate return to the status quo. A combination of fear, revelations about the nature of remote work and hiring, and adjustments to a new economic reality will likely lead to lasting changes.
Kate Reder Sheikh is a managing director in Major, Lindsey and Africa’s Associate Practice Group. She covers San Francisco and Silicon Valley. Her focus is on providing a concierge level of service to associates and clients alike. Leveraging her background as a litigator in San Francisco, Kate has unparalleled access to roles and firms in the Northern California market. Kate is an avid traveler — she and her husband have been to 27 countries together since 2011. A San Francisco native, Kate spent three years as an ex-pat in Singapore and London before returning to the Bay Area in 2017.
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