Early last week I interviewed Eric
Sivin, a founder and principal
of Sivin Tobin Associates,
a legal search and recruiting firm based here in New York. (And
yes, that is their ad that has been running in the right-hand column
of my site for a couple of months now—but this piece is not motivated
by or part of any commercial considerations whatsoever; it’s an effort
to better understand the evolution of legal search from the perspective
of someone who’s been doing it for over 30 years.)
Eric is on the Board of Directors and Treasurer of The National Association
of Legal Search Consultants (NALSC),
which describes itself as "the only organization representing the legal
search profession." With 173 member firms in the US,
Canada, and overseas, NALSC developed and adopted (nearly twenty years
ago) a "Code
of Ethics", which members
must subscribe to.
Eric did not go straight into legal search, but, after Brandeis and
NYU Law School, was a commercial litigator for 10 years, starting at
Kronish Lieb. An active intercollegiate debater and national
semi-finalist in moot court competition, Eric hoped that being a litigator
would allow him to use his skills of rational persuasion in real-life
disputes but, as many of us also discovered for ourselves, the life of
a litigator in a large New York firm rarely involves actually trying
a lot of cases.
When Eric embarked on his career in legal recruiting, the industry was
in its infancy. At the time, there were only seven or eight legal
search firms in New York, and very few if any elsewhere; the only work
was placing second to fifth-year associates. Lateral partner hiring
was nonexistent. Even firms that used recruiters for associate
hiring did so "holding
their noses."
Aside from social customs, also constraining lateral partner recruitment
was the relative information vacuum (always an obstacle to markets’ clearing
efficiently). The era was pre-The American Lawyer, pre-
public information on law firms.
Eric vividly recalls learning
of an opening at a prestigious New York firm for a mid-level litigation
associate and calling to ask if he could be of assistance. When
invited to help, he asked about expected salary levels, type of work,
and representative clients: Each and every one of those was "proprietary"
and would not be disclosed outside the firm!
Also, in those pre-Internet days, learning who actually worked at which
firm could be like solving Rubik’s cube, and the annual publication of
Martindale-Hubbell was a red-letter day. But
even Martindale did not reveal all; in many cases, associates were not
listed with their firm but only as individual attorneys admitted to practice
in New York, in the back of the book. One would then have to deduce
from the office address (say, 919 Third Avenue) what firm they might
be with (Skadden).
What a difference a few decades make.
Q.: When, I asked, did lateral partner recruiting start to become
a material part of the business? A.: It started to surface
in the late ’80’s, was promptly kiboshed by the recession of the early
’90’s, and didn’t really come into its own until the mid-90’s.
Q.: Which
practice specialties are hot now and which aren’t? A.: Nothing
is hotter than private equity, but securities litigation has been strong
for a long time. Various aspects of corporate law, especially financial
services, mutual funds, ’40 Act and hedge fund experts are hot. Real
estate and tax work are just bubbling along, but specialists in tax aspects
of real estate investment trusts will always find a home. M&A is
healthy, but not red-hot; and bankruptcy is actually cold, except for
firms looking to staff up in the trough in anticipation of the next crest. And
IP, I asked? IP is very hot; "it’s nothing less than the present
and future of economic growth," and it’s an area where many major firms
feel they do not have all the people they need; in other words, the "roll-up"
of the IP boutiques by the AmLaw 100 has not completely played itself
out.
Q.: International? A.: Very strong; everyone is talking
about the far east and China, "even if no one is making any money there." And
the demise of Coudert Brothers had everyone running around to seize opportunities.
Q.: I assume some firms do lateral recruiting relatively well
and others relatively poorly; what are the differences? A.: Absolutely! The
key distinctions are:
- Firms poor at lateral recruiting often really don’t know exactly
what they want or why they want it; they’ll take people because their
specialty is in fashion or because they come across someone unhappy,
but with a nice book of business. The problem is if there’s no
strategic fit, which "becomes self-evident during the process as the
candidate receives mixed messages." - Firms also vary in sheer managerial competence; some simply run the
search process more effectively than others. Searches extending
out over five or six months or more "are not atypical; inordinate
amounts of time go by and people lose interest." - Some firms don’t trust recruiters enough to give them all the information
they need to accurately characterize a situation or to keep a candidate
informed of where they stand. A common situation is that of a
firm marching almost up to the altar with Candidate 1 only to begin
conversations with Candidate 2; and the most popular, if less-than-candid,
method of dealing with this is simply to stop returning calls asking
where Candidate 1 stands. "These things happen all the time." - Conversely, the best searches are when the recruiter and the firm
actually work together, collaboratively, to define the position and
the opportunity, and to map out what the profile of viable candidates
would look like.
Q.: Post-search, as well, I assume different firms handle the
integration better or worse? A.: "There are certainly
some firms that do this very well. In
the majority of cases, happily, it works out even if the integration
is less than ideal—’good
enough’ does the trick." Still, in most cases integration
is "not done cohesively." There are many reasons for
this; lawyers are busy, they have the attitude that they’re "professionals"
and disdain "being business-like," there’s not a corporate
reporting structure or anyone to enforce follow-through on integration. "Most
firms could do a far far better job."
And, considering the amount invested in a search—from what can
be an inordinate amount of otherwise-billable hours, to the recruiter’s
fee, to the reality of their being a three to six-month breaking-in period
without any fees being collected—the lack of attention to effective
integration is astonishing.
Q.: Is there activity not on the lawyer side, but on the "C-suite"
side, recruiting senior law firm management? A.: It’s not
something Sivin Tobin has chosen to do; we prefer to focus. But
yes, that’s an increasingly active area, and firms are getting more sophisticated
about the level of professionalism they need in their management ranks.
Q.: Are dedicated legal search firms such as yours experiencing
competition from the Korn-Ferry’s and Heidrick & Struggles’ of the world? A.: Sure,
those firms are more interested than ever; let’s face it, there’s more
money at stake. But Eric doesn’t believe they can compete effectively
unless they change their fundamental, underlying business model. They
strongly prefer, if they do not simply insist, on doing exclusively retained
and not contingency searches. "You basically cannot do legal search
for law firms strictly on a retained basis." Why? Because
"without the constant contact and flow of information on who’s
who, what they’re thinking, how they’d respond to a hypothetical scenario,
and generally just taking people’s temperature," a recruiter isn’t in
a position to conduct an effective search. Doing contingent searches
ensures that the recruiter is in the marketplace talking to potential
future candidates all the time.
Q.: And the future of recruiting? A.: It’s getting
more and more professional all the time. "When I started, I think
I was the only recruiter who’d really practiced as an attorney," and
now that background is extremely common.
So what is the economic function of legal recruiting? Recall
that I mentioned the difficulty of markets’ "clearing" efficiently in
an information vacuum. The converse of that is that the more accurate,
timely, comprehensive, and germane is the information at one’s fingertips,
the more one actually has a fighting chance of deciding wisely.
Law firms are not in the business of keeping their finger on the pulse
of everyone who might potentially join them some day, but when strategy
and opportunity intersect, they need a hasty education on who might be
receptive to an overture, how their practice has developed, and whether
there might be cultural alignment between the firm and the potential
lateral. Good recruiters provide that essential information
brokering function.
I’ve remarked before that the dynamics of lateral partner mobility becoming
a reality "changed everything," and recruiters are indispensable to that
marketplace functioning well. As such, the Eric Sivin’s of the
world have a vital place in the ecosystem we all inhabit.
