By Xiumei Dong

Law360 (June 16, 2020, 7:45 PM EDT) -- With the legal industry hit hard economically by the coronavirus, law firms have pivoted their hiring strategy from making "investment" hires to focusing on high-profile partners who can increase their revenues, recruiters said.

Many law firms have stopped recruiting associates and have frozen staff hiring as a large portion of the legal industry deals with the uncertainty caused by the pandemic, according to these market observers.

With a growing list of firms implementing layoffs and pay cuts to tighten their budgets, the downturn has paved the way for some opportunistic firms to scoop up some of the "rainmaker" attorneys they have been longing for, recruiters said.

"A lot of firms are using this as an opportunity to be strategic and continue with their hiring, and they know that most of their less strong competitors are likely not going to be in the same position to do it," said Jeffrey Lowe, a managing partner at Major Lindsey & Africa. "So it's oddly and ironically a time of opportunity."

Unlike the previous recession, where the economy went into freefall because of the collapse of the financial markets, Lowe said law firms are much more patient this time because "everybody knows the exact reason why things turned."

As a result, there's a concerted effort to lure "higher priority" prospects, particularly partners or groups that can bring large books of business, Lowe said.

Just this past week, New York law firm Paul Weiss Rifkind Wharton & Garrison LLP landed two of Boies Schiller Flexner LLP top litigators, Karen Dunn and William Isaacson, who are known for representing tech giants like Apple and Uber. Two months earlier, Boies Schiller, a firm known for its litigation bench, lost what became a 15-partner group in California to King & Spalding LLP.

"For firms that are well-positioned, this is going to be a very good opportunity for them because there very well may be candidates who come into play, who have some concern maybe about their firm and their firm's financial condition or ability to compete in the new world of order," echoed legal recruiter Frank Michael D'Amore, principal of recruiting firm Attorney Career Catalysts.

D'Amore said some of the law firms that had strong financial reserves during the Great Recession actually grew partnerships, while other firms focused on keeping the costs down and froze hires.

"Some firms really transformed themselves in the Great Recession," D'Amore said. "I think that will happen again, and I think it will be more of a focus on partners and groups, and it'll be a fair amount of law firm consolidation.

Because of the economic slowdown caused by the COVID-19 pandemic, there has been a greater urgency for law firms to bring in high-revenue-generating partners, even if that means paying "a premium" for the laterals, D'Amore added.

"What that means is for the foreseeable future, the only moves are going to be 'elephants,'" said California-based legal recruiter Daren Wein of Panorama Legal Consulting, giving an example that partners making less than $2 million will be less attractive to the firms now.

"The partner X who has a modest book of business that is making mid to high six figures, is a nice hire, but it's nothing that a firm is going to be interested in right now because the risk is too great," Wein said. "There's no upside to taking that risk."

In the past two months, Wein said he had seen some of the firms in the AmLaw 20 "aggressively" going after the market for admirable candidates.

"They're going to try to cherry-pick," he said.

Several other BigLaw firms have also made moves in recent weeks. Quinn Emanuel Urquhart & Sullivan LLP picked up the co-chair of Williams & Connolly LLP's patent litigation practice in Washington, D.C. Fox Rothschild LLP nabbed a seasoned litigator from Akerman LLP to boost its employment law footprint in California.

McDermott Will & Emery LLP had opened a new Atlanta office after hiring five partners and two counsel from DLA Piper, Jones Day and Kasowitz Benson Torres LLP.

And of course, candidates whose practice area is in demand at the moment might also have more leverage. According to recruiters, the highly sought after candidates are partners in the bankruptcy, labor and employment practices. Other hot areas include cybersecurity and privacy, litigation, white-collar, health care and government work related to the $2 trillion Coronavirus Aid, Relief and Economic Security Act.

However, the lateral partner activity across the industry has slowed down during the pandemic.

According to data from Leopard Solutions, a database tool used by recruiters and law firms, the number of partner lateral moves tracked in May at the top 200 firms in the U.S. fell nearly 58% from 224 partners in 2019 to 95 in 2020, and the April numbers were down 52% year-over-year, from 282 to 136.

Similarly, associate attorney moves were down 59% compared to May 2019, the data show, falling from 658 moves to 267. In April, associate moves were down 25%, but in March, around the time when lockdownsbegan around the country, 692 moves were reported, almost double the total from March 2019.

"Right now, what they're doing is they're trying to do lateral recruitment for business development because everybody needs business development right now," said Laura Leopard, CEO of Leopard Solutions. "Even if they have to elbow people around to fit them into their firm, they're going to want those people."

"So right now, all of the big people in their fields, I mean, this is where they get to write their own ticket," Leopard added.

While the work-from-home setting also added challenges for the firms to bring on new hires, recruiters said firms are still willing to take meetings and onboard good candidates remotely.

"On top of that, everyone is working from home, so they're just a lot more open to talking right now," added Avery Ellis, a California-based recruiter at Mestel & Co.

Ellis said the remote working environment gives the attorneys more flexibility and privacy to interview for new jobs, noting that he recently closed a hiring deal that was done entirely remotely.

"I think it's really going to have a lasting effect on how firms do recruiting," Lowe said. "I think they're going to be much more comfortable with people meeting via Zoom, especially in lieu of making them go to foreign offices."

However, as the firms are making big bets for the high-profile partners, not being able to meet in person has created some setbacks for them and the recruiters making the placement, Lowe said.

"There really is no substitute for an in-person meeting and just the feeling that you get when you meet people," he said. "Perhaps that's a skill that we'll all learn to cultivate, the more we live in an online world."

--Editing by Jill Coffey.

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