[This article was prepared by Justin Flowers, a director in Lateral Link’s New York office.]

Last Friday Lateral Link gave the ATL audience a unique and wide-ranging Job of the Week that reflected the number of bankruptcy positions in this otherwise dismal market. These positions cut across several geographic regions. I, like many of our consultants here at Lateral Link, have been answering a tremendous number of questions from candidates about bankruptcy for weeks. Most of the questions have centered around a few main topics, which I discuss below. We’ve also been hearing a lot of blatantly wrong advice and information from other sources that our members are bringing to our attention. In order to help clear the air a bit, I wanted to put something out there this week that would cut through the fog of misinformation that is clouding the market regarding these highly sought-after positions. This information is based on the cumulative experience and substantial collective hours logged by the Lateral Link team speaking and meeting with recruiting coordinators and heads of practices in markets across the country. It’s based on the reality of what is happening right now in the market, on the rules, not the exceptions (although I’m sure at least a few readers know “some guys from their high school” who’ve pulled off something incredible in contravention of all of this).

Which groups/practices are hiring?

This depends on where you are geographically (or where you are looking). New York is definitely the center of the bankruptcy lateral world at the moment and the place where there is the greatest depth and breadth of opportunities. Firms of every size and type of practice (more on that below) are currently looking in New York for partners and associates. Strong needs for both partners and associates are also available in every major market (and many non-major ones), but there are fewer of them in each market. As noted previously in the Job of the Week, Boston, Chicago, Los Angeles and San Francisco all have openings. That’s kind of obvious, but where else? Miami? Count it. Vegas? Oh yes, and plenty of cheap housing too. Indy? Indeed. And there’s more where that came from.

***More after the jump.

How much experience is necessary?

New York opportunities run the gamut from more junior opportunities to more senior slots for genuinely experienced Bankruptcy or Restructuring attorneys. With the burgeoning numbers of failing and distressed companies, mid to senior level bankruptcy and restructuring associates are experiencing a heretofore unseen clamor for their services. Even junior associates with excellent credentials and a substantial amount of bankruptcy experience have some options in this market. Generally two years of experience is the minimum level needed, but there are a handful of options where slightly less experience will still put you in consideration. The bar in terms of experience is a little higher in other markets, however, at midlevel and above there are many opportunities for associates with strong bankruptcy experience and solid academic pedigree to make a move in these markets.

What are my chances of re-tooling as a bankruptcy associate from a corporate/litigation background?

The massive and repetitive rounds of recent and on-going lay-offs, combined with the dearth of real openings in many key practice areas, have turned the legal hiring market into something akin to a hellish game of musical chairs without the chairs. Many attorneys have turned their attention to the few areas where needs appear to be both real and plentiful. For those scrambling to get back into the firm world as quickly as possible (or those looking to forestall what might seem at this point to be an inevitable future reduction in force) but who lack the hard science backgrounds to parlay into an IP career, that oasis might appear to be bankruptcy. After all, the fact that there are aspects of both corporate transactional work and litigation to a broad bankruptcy practice give it an almost universal appeal and the sense that it is a tantalizingly simple re-tooling opportunity.

Unfortunately, that has not been the case in the lateral market thus far. While this New York Times headline was attention grabbing and generated some excitement among candidates seeking to re-tool (it was mentioned to me numerous times shortly after it came out), the article describes internal staffing shifts that have dominated the market until now. Many firms are coping with any real increase in bankruptcy work by channeling more junior associates into the practice, either directly or by staffing associates from other groups on bankruptcy cases. One top New York firm states clearly on their website that while the firm has approximately 100 attorneys dedicated to their Corporate Restructuring Group, they also have over 100 additional attorneys from various other firm practice groups that contribute regularly to bankruptcy and restructuring matters.

Recruiting coordinators and partners at top firms have expressed to us that they are far more likely to re-tool a junior associate from within their own ranks than they would be to do so for a lateral. This is the case regardless of whether an attorney attempts to self submit or is submitted through a recruiter. Throughout the recruitment cycles of the last few years, firms have exhausted large amounts of time, money and other resources in recruiting high caliber legal talent. The unwinding of law firm leverage and adjustments to the economic events of the last 12-18 months have resulted in the bloodletting of late 2008 and all that we have seen of ‘09 so far. While there are unfortunately a growing number of talented attorneys now thrust into the market, largely through no fault of their own, it does make sense that firms would have a vested interest in trying to retain and re-train the talent that they have already invested in rather than bringing in a lateral re-tool.

In order to consider a successful move into the Bankruptcy field, you must possess at least a year (and more is always better) of bankruptcy experience in at least a cross-over role. A candidate with no demonstrable Bankruptcy experience, whether acquired through an earlier rotation or through serendipitous work assignments, will have a very difficult time obtaining an interview.

That’s all for this week, but next week I’ll be laying out some predictions and analysis for what the near future holds for the world of bankruptcy and how it might affect hiring this year, as well as ways to strengthen the case for successfully making the jump if you are not a mid-level bankruptcy associate at this moment.

As always, I am happy to answer questions as quickly as I can. If you have further questions or are interested in discussing some of the current opportunities in more detail, feel free to contact me at jflowers@laterallink.com.