Will Market Turmoil Boost Bankruptcy Practices?
Get ready, because bankruptcy attorneys are due for another upswing in hiring. Are you prepared?
Ed. note: This is the latest installment in a series of posts Lateral Link’s team of expert contributors. Michael Allen is Managing Principal at Lateral Link, focusing exclusively on partner placements with Am Law 200 clients and placements for in-house attorneys.
With uncertainty in the global markets and the Dow ping ponging like a bad Weight Watchers diet (FYI, WTW is close to a 52-week low itself), several counter-cyclical practices should realize a bump in their workflow. In particular, bankruptcy attorneys are due for another upswing.
Since the market is difficult to forecast, especially long-term trends, law firms are typically reactionary to cycles as opposed proactive according to their predictions. That said, given the number of bankruptcy attorneys in the market today, like most specialized practices, we should see a run on the good ones at the start of the next cycle.
During the height of the recession, bankruptcy laterals boomed while all other practice areas tanked. However, during the resurgence in 2010, bankruptcy laterals fell while other practices flourished.
This trend however, does not paint a full picture. In 2009, there were approximately 50 bankruptcy associate positions opened by Am Law 200 firms, according to our internal database. In 2010, around 100 more positions were opened, and the next year, demand rose to 150. Firms were unable to fill these positions with the supply at the time. Firms that anticipated the deteriorating market conditions early were able to hire top partners and associates to stopgap losses from other practices and beat the herd. Most firms acted too late and failed to beef up their bankruptcy practice after the cycle commenced. Compounded with the difficulty of consummating a partner move, and the likely six months it takes from start to finish, the more proactive firms are more likely to reap the rewards of predicting counter-cyclical practices before the rest of the market pilfers the existing supply.
Bankruptcy partners are tied to the market since conditions dictate demand, and a dearth of work from partners also means fewer associates needed to service their work. As market conditions have improved, associate bankruptcy lateral movement has slowed, while partner movement has slightly increased.
The bottom line is that firms should keep their current bankruptcy partners well fed and happy since their market value is bound to peak over the next few years. If firms are low on talent, they should consider reinvesting today before there is a run on talent.
Ten percent of bankruptcy partners are at or past usual mandatory retirement ages. However, the overall distribution of partners is fairly young with the median age of around 50.
The biggest bankruptcy practice belongs to Kirkland & Ellis, with Weil, Jones Day, Skadden, and Akin Gump rounding out the top five (click to enlarge).
However, in terms of practice share, Brown Rudnick leads the pack with 12% of their firm devoted to the bankruptcy practice (click to enlarge).
For firms looking to proactively prime their pump while watching the market, feel free to call me to discuss your hiring strategy.
Lateral Link is one of the top-rated international legal recruiting firms. With over 14 offices world-wide, Lateral Link specializes in placing attorneys at the most prestigious law firms and companies in the world. Managed by former practicing attorneys from top law schools, Lateral Link has a tradition of hiring lawyers to execute the lateral leaps of practicing attorneys. Click ::here:: to find out more about us.
