BigLaw firms slow down recruiting and hiring amid changing political landscape
Law firms, and particularly those in BigLaw, are reexamining their business models to determine which practices are more likely to sustain them for the next four years and which might dry up or aren’t worth the scrutiny of President Donald Trump’s administration, law firm observers say. (Image from Shutterstock)
After a chaotic presidential transition and with a potential recession looming, BigLaw firms are rolling back their hiring and recruiting efforts, observers say, as the economic impacts of skirmishes with the new administration remain unclear.
Law firms, and particularly those in BigLaw, are reexamining their business models to determine which practices are more likely to sustain them for the next four years and which might dry up or aren’t worth the scrutiny of President Donald Trump’s administration, law firm observers say.
Some firms may be reevaluating the strengths of certain practices, such as regulatory and compliance and white-collar criminal defense, along with their pro bono work. In addition, some firms are scrubbing their diversity, equity and inclusion initiatives while others are repositioning their programs and efforts.
“What we’re hearing about is tremendous uncertainty and apprehension,” says Lauren Drake, a partner in the Washington, D.C., office of legal recruiting firm Macrae. “Firms are taking time to reassess their internal priorities and planning, and that slows recruiting.”
In the weeks after Trump targeted specific law firms in executive orders, pulling security clearances and curtailing the firms’ ability to conduct business with the federal government, the legal industry is divided about whether to fight together or separately or negotiate agreements with the Trump administration.
Several firms have settled with the government in advance of any executive orders singling them out. Other firms have fought back with lawsuits and amicus briefs.
Jeffrey A. Lowe, market president of CenterPeak, a legal placement firm, says the executive orders have had a “chilling effect in Washington.”
“There’s a ripple effect as firms try to figure out how to stay out of disfavor and whether hiring certain people will put them in disfavor,” Lowe says. “Law firms tend to take the conservative approach in their businesses.”
‘Feels different’
During a typical administration change, there is turnover, with government lawyers looking to switch to private practice, according to legal recruiters. During that time, it’s not unusual for firms to reexamine their business goals as they determine where to grow and whom to hire.
“Changes in administration affect business, and when companies face uncertainty, they can have a lot of questions for lawyers,” Drake says. “That uncertainty can be good for law firms.”
But, Drake adds, this current era “feels different.”
“The uncertainty this time is about how law firms conduct their business under so much scrutiny,” Drake says. “The scope and lack of clarity within law firms about how to proceed is unprecedented to me.”
And with mass layoffs of federal employees, firms are overloaded with resumés from federal government lawyers either looking to get out or recently fired.
“There’s a combination of firms being more deliberate than normal and a flooded market of lawyers leaving the government,” says Jordan Abshire, who founded the Charlotte, North Carolina-based Abshire Legal Search.
Defining moment
When he took office, Trump went on attack against some of the most prominent and powerful law firms in the country. In March, he issued an executive order aimed at Perkins Coie for representing Fusion GPS, the company that commissioned the infamous “Steele Dossier.” He also targeted Jenner & Block and WilmerHale, two firms that had hired members of special counsel Robert Mueller’s prosecution team.
In his executive orders, Trump threatened to revoke the security clearances of these firms’ employees and limit their access to federal buildings. In addition, Trump through the executive orders threatened to derail the government contracts of targeted firms’ clients.
Another executive order directed the attorney general “to seek sanctions against attorneys and law firms who engage in frivolous, unreasonable and vexatious litigation against the United States.”
On March 26, more than 50 state, local and specialty bar associations joined with the American Bar Association to release a statement defending the rule of law and rejecting efforts to undermine the courts and the legal profession.
“We support the right of people to advance their interests in courts of law when they have been wronged,” the statement said. “We reject the notion that the U.S. government can punish lawyers and law firms who represent certain clients or punish judges who rule certain ways.”
After Paul, Weiss, Rifkind, Wharton & Garrison reached a settlement with the Trump administration in March, other firms—including Skadden, Arps, Slate, Meagher & Flom and Willkie, Farr & Gallagher—settled preemptively to avoid executive orders aimed at them.
Perkins Coie and other law firms have filed lawsuits challenging the executive orders. More than 500 law firms have signed an amicus brief criticizing Trump’s targeting of Perkins Coie and other firms.
In addition, the U.S. Equal Employment Opportunity Commission has sent letters to 20 law firms warning them that their diversity programs could violate federal civil rights laws and requesting data about their diversity practices.
“This moment will define BigLaw for at least the coming year, if not longer,” Lowe says. “Are firms going to lose clients no matter what they do? How do firms stay in business? It’s just not a simple issue. It’s very, very difficult when you are in a fight, and the person on the other side holds the cards, the power and the money. There are very real costs for the individual lawyers here and the firms.”
The problem for BigLaw is that most practice areas engage at some point with the federal government, says Walter Olson, a senior fellow at the Cato Institute’s Robert A. Levy Center for Constitutional Studies who studies the legal industry.
Since Trump has indicated he is keeping an eye on firms that hire lawyers he doesn’t like, some lawyers leaving the government who might normally fit into a D.C. or New York City-based white-collar enforcement practice, for example, might have better luck outside of these geographic areas, in “less politicized markets,” Abshire says.
Risky business
Government attorneys, particularly from the U.S. Justice Department or the U.S. Securities and Exchange Commission, often rotate into white-collar criminal defense. However, Abshire says, “no one is sure exactly what white-collar enforcement will be like, although the presumption is that there will be less federal enforcement.”
However, it’s possible that enforcement of white-collar crime could shift to states, “keeping lawyers busy,” Abshire says.
In addition, it’s unclear how exactly mass federal government layoffs will affect regulatory practice and the amount of work for lawyers, according to Abshire.
But firms that are based in the nation’s capital tend to be highly reliant on their government practices and “don’t really have the luxury to go in a different direction,” Lowe says.
The legal industry, Olson says, may be at an inflection point, where some practices could split off from larger firms into boutiques to avoid the scrutiny that larger firms are receiving.
“I assume some lawyers—such as those involved in regulator matters, intellectual property, tax, mergers & acquisitions—might be happier practicing in smaller practices,” Olson says.
Pro bono impact
In recent decades, BigLaw firms have expanded their pro bono practices, in part to recruit associates, legal observers say.
“We had a pro bono revolution over the last generation or two,” Olson says. “BigLaw firms have become much more involved. Conservatives argue that the representation has been one-sided. But it has been seen as good for recruiting associates and perhaps good for morale.”
Ray Brescia, a law professor at Albany Law School and the author of Lawyer Nation: The Past, Present and Future of the American Legal Profession, worries the Trump administration’s efforts against law firms could lead to them taking a “less aggressive approach” to pro bono litigation against the government to “avoid Trump’s ire.”
“Many of the bigger law firms that were engaged in high-impact cases against the administration last time around are far more likely than not to rethink those positions going forward,” Brescia says.
Olson agrees BigLaw firms will likely try to avoid high-profile pro bono litigation against the federal government, which would put those cases into the hands of smaller firms or potentially leave clients without representation. It’s possible, Olson says, that the era of BigLaw investment into pro bono practices is over.
In addition, with many firms retreating from their previous diversity initiatives, there’s concern that they will have trouble with their recruitment efforts down the road.
Lowe says some BigLaw attorneys, and particularly more vocal associates, are posting on LinkedIn and elsewhere on social media platforms about their unhappiness and how they want their partners to take a stand. From what he’s seen, there is also a growing movement among lawyers to try and leave firms that they believe are not fighting back enough.
Law students have also pushed back on firms they say have folded under Trump’s pressure. For example, Georgetown Law students canceled a networking event with Skadden last week.
Skadden did not respond to two requests for comment.
“I hope that other student organizations around the country who find themselves faced with similar decisions will do the same,” Georgetown Law student Caleb Frye posted on his LinkedIn page.
Lowe predicts the divide will continue to grow “between lawyers who want their firms to take a stand against the Trump administration and lawyers who recognize that, while they would like to do that, there’s the practical reality of running a multibillion-dollar business.”
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