Value investing is a strategy that seeks out fundamentally sound companies (with strong balance sheets and price earnings ratios) and is becoming increasingly popular during the economic downturn. Because the good times inevitably follow the bad, value investors reason that over time they will be less susceptible to ups and downs and create less long term growth.
Similarly, the demand for lawyers has returned to a focus on fundamentals, such as education, expertise, and drive. Their skill set being their primary asset, lawyers should focus on building value during the down times to prepare their careers for the return to good times. Call it “value lawyering”.
Firms have stopped filling their ranks with lawyers to perform due diligence in IPOs and private equity and, of course, securitisation deals. Proposals for modifying lockstep pay for associate have surfaced and been adopted. Indeed, a recent article on an legal news website cited a proposal by one law partner to return “value to clients” by having junior associates pay their firms for their training until they become “productive” after three years. (Presumably the firms will return the investment should the associates stay.)
Despite the current economic downturn, the fundamentals of lawyering have not changed. Associates with top law school backgrounds, top grades and large firm experience, will remain (if they wish) relatively secure in the top tier of firms and practice groups for which demand remains strong, such as private equity, certain types of structured finance, patent litigation and, of course, bankruptcy. Many others, having had a taste of big firm practice and compensation, will have to retool for the new economic climate of “downsizing” – casting off unprofitable practice areas – and flat compensation. In either case, the buyer’s market requires lawyers to emphasise basic skills and to pay serious attention to career decisions.
Value lawyering – how to do it
Do a vigorous self-assessment:
• Objective (what can you do?): How do your credentials stack up objectively (rank of law school attended, honours, clerkships, etc).
• What are your skills (what are you good at?): Are you organised, analytical, and outgoing? What non-legal education and work experience and skill sets do you have that will help you enhance or retool your practice?
• Legal experience: Drafting, negotiation, research and writing, depositions, participation in trials or arbitrations.
• Subjective (what do you want to do?): What are your career goals and priorities, both near and long term? Do you want to stay in the law? Do you want to maximise your compensation or your personal time?
• Do you prefer a more or less structured work environment? Do you want to be a “headliner” or a staffer? (Be honest with yourself.) Do you like working with lawyers?
• Get the necessary information on what jobs are available: How do they stack up against your current job and your dream job?
A good career counselor or recruiter can aid you in appraising your skills, experience, goals and creating a search strategy. We are not magicians. The good ones give you the tools to evaluate your situation and determine the way forward. That requires you to examine closely (and simultaneously) what you want to do, what you can do and what is available.
Only after you have done an assessment of your skills, and goals and laid out a strategy (or strategies) should you move forward.
1) Find a need and fill it: specialise as deeply as you can, even in the areas which are not hot right now (like M&A) working on lower profile deals and basic corporate matters instead of fleeing to new a new hot area insolvency or structured finance unless these really appeal to you. For instance, litigators should consider plaintiff’s work which generally is less credentials focused.
2) Use school to retool: Education is a worthwhile investment. This is particularly true of professional education such as a Masters of Law degree in tax, environmental, labour or trade regulation. Even if your prior practice does make you a specialist in a certain field, a degree in the field goes a long way toward establishing your bona fides. Just be certain the area you choose is one to which you are ready to commit. Remember, you have a long career ahead of you.
3) Invest in yourself: If you have always wanted to start your own practice, now, believe it or not, is the time. With big firm training (and perhaps a few bucks set aside), you can offer quality service at lower rates than larger firms, and may snag business from clients of your former firm with whom you have built trust and who appreciate more reasonable fees for certain matters. The younger and less encumbered you are, the more risk you can take.
4) Establish a strategy based on your fundamentals: Your experience, skills, priorities and goals and current, accurate market information can grow your build a “portfolio” that matches you personally and professionally. You can do nothing more important for your career.
David Bargman is president of Baum Stevens in New York