LEGAL: Local industry bucks national downturn in job trends.
By JOEL RUSSELL Staff Reporter
San Fernando Valley Business Journal
By some measures, the law industry is a shrinking career trap. You just wouldn’t know it from the employment figures of the largest firms in the greater San Fernando Valley.
The 40 firms on the Business Journal’s list, ranked by number of attorneys, collectively hired 35 attorneys last year and employ 690 lawyers. Consider Sanford Michelman, executive chairman at Michelman & Robinson LLP in Encino, the No. 2 firm on the list with 54 attorneys.
“This year we’ve hired more in our Encino office, and we have three more attorneys starting in August,” he said. “Our business is growing in corporate law, employment, business litigation and banking. We are firing on all cylinders in every department, and not just in Los Angeles.” So how does that square with the dissolution of Howrey LLP, a national law firm with about 750 attorneys that filed for bankruptcy in 2011? Or law schools from the University of Pacific in Sacramento to Northwestern in Chicago, planning to cut the size of their entering classes? Or alumni joining in class action suits against 14 colleges, including Southwestern Law School in Los Angeles, arguing that the schools recruited them using exaggerated job-placement rates?
Well, many of the problems have hit larger firms with high billing rates that traditionally were charged to corporate clients that revolted against the high costs during the recession. By contrast, Reape-Rickett Law Firm in Valencia, the No. 34 firm on the list with six attorneys, plans to beef up in November. The firm focuses on family law, especially divorce and custody cases.
Partner Jim Reape said that during the dregs of the recession, people couldn’t afford to contemplate a divorce and business declined. Now that trend has reversed. Also, the population in the Santa Clarita Valley is steadily increasing and he expects his business will grow in step.
“The profession is changing, and what I call big law – the multinational firms – are shedding lawyers like crazy,” he said. “It hasn’t affected us because we are consumer-oriented specialists. We are most affected by demographics and the economy. Within the next year, we will put another lawyer in the queue and support staff will grow by one and two.”
Economic disruption The Bureau of Labor Statistics forecasts there will be about 74,000 job opening for U.S. lawyers during the next seven years. During that time, the 200-plus law schools accredited by the American Bar Association will graduate about 44,000 lawyers annually. Even accounting for retirements, the job market for legal experts appears oversaturated.
David Gurnick is an attorney at Lewitt Hackman in Encino, the No. 9 firm on the list with 24 attorneys, and president of the San Fernando Valley Bar Association. He believes several factors have combined to put a temporary squeeze on the legal job market. Aside from the recession, document services and website companies have allowed would-be clients to handle simpler legal matters themselves at lower cost. Gurnick calls this “the illegal practice of law.” “The convergence of those circumstances has disrupted the market, but that is a temporary condition,” he said. “Overall, people continue to find it difficult to identify a lawyer with the particular skill set that they need at an affordable price.”
Michelman, the Encino attorney, points out that statistics on law school graduation numbers can be misleading. He said it’s assumed law students want to become lawyers. In fact, many go to work in government, education, or the business affairs departments of corporations. These positions don’t require bar certification or official lawyer status.
“Law school enrollment doesn’t equate to too many lawyers,” he said. Sandy Lechtick, president of legal recruiting firm Esquire Inc. in Woodland Hills, said that he sees some light at the end of the tunnel with hiring picking up after the long recession. However, the typical large law firms in downtown Los Angeles or Century City doesn’t have the time to train new attorneys, and their clients don’t want newbie lawyers learning on their dime. As a result, attorneys with experience can find jobs but new graduates can’t.
“The magic number seems to be three years experience,” he said. “But some of our clients are looking for associates with four to eight years experience. It’s still challenging for recently minted law school grads, and we see that trajectory increasing.”
Mid-sized firms like those on the Business Journal’s list also are looking for talent with experience. However, in addition to legal acumen they want rainmakers who can instantly make a contribution to the top and bottom line. “Those firms tend to focus more on bringing in revenue-producing partners who have their own book of business,” Lechtick said. “The small- to mid-sized firms are more inclined to look for talent with business development skills and a track record of generating business.” Reape at Reape-Rickett said his firm tries to train every lawyer to bring in new clients, but the program doesn’t turn every legal eagle into a rainmaker. And it can lead to new competition for business.
“If they want to be on partnership track, we look at their ability to bring in clients,” he said. “We don’t push it on people. If it works, they either become productive or they leave and open up their own firm because we have taught them how to get clients.”
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