COVID-19 Slowed Legal Recruiter Work in Texas, But the 'Phone Is Still Ringing

With the movement of energy lawyers way down this year, and lateral movement overall taking a plunge, Texas legal recruiters are feeling the effects of local lawyers staying put.

As The American Lawyer reported last week, legal analytics firm Decipher found that 10,233 partners and nonpartners made lateral moves through Aug. 31, a decline of 30% when compared with 2019. Hiring in several practice areas was down substantially for the eight-month period, including declines of 33% in banking, 30% in energy, and 28% each in environmental and tax.

The report also showed an uptick in a few areas. Lateral movement in bankruptcy practices is up 30%, and it’s up 46% in data privacy.

Several recruiters in the Texas market said the volume of business is clearly down, but firms, particularly in the midsize category, have continued to add lawyers.

“It seems like the small-to-midsize firms … are staying a little busier,” said Jennifer Nelson, an Austin-based principal in Momentum Search Partners. Fitting with the effects of the economic downturn and the COVID-19 pandemic, Nelson said her firm is seeing a steady stream of lateral placements for the litigation and bankruptcy practices.

Business was slow during the first two to three months of the pandemic, Nelson said, but she said Momentum was busy in June through September. It has slowed a bit since then, she said, but that’s typical for the fall because the year-end is approaching.

“We are definitely not as busy this time of year as we were the previous three or four years, but it’s steady. The phone is still ringing,” Nelson said, adding that she expects business to pick up in mid- to late January.

Lee Allbritton of Amicus Search Group said he doesn’t question Decipher’s finding that lateral partner and nonpartner hiring has declined by 30% so far this year, but he notes that hiring is local.

“In my experience, the more nimble Texas-based firms tend to be picking up the pace, hiring more. They are not encumbered by the practical limitations of having partners all over the country in different markets,” Allbritton said.

Amicus is seeing hiring activity in bankruptcy and restructuring; labor and employment; data privacy; and health care, he said. While hiring may be down 30% nationally, he said, in Texas, nonpartner hiring is probably off by 50% compared with last year, but lateral partner hiring may not be down as much as the 30% national number.

Mark Prescott, who does both in-house and firm placements at Prescott Search Group, said the decline in partner and nonpartner hiring in Texas is largely due to how the economic slowdown has affected the energy sector.

“It’s purely related to a downturn in the energy space. You are seeing more restructuring, more bankruptcy hiring,” Prescott said.

Bruce Litvin, who places partners as a recruiter at Windsor Consultants in Houston, said some of the hiring in Texas during this unusual year has been at newly formed boutiques or to  replace a top-notch lawyer in a busy practice area who moved to another firm.

But firms aren’t filling every vacancy that emerges. “If they are being downsized, they don’t need to be replaced,” Litvin said.

Litvin added that associates are less likely to move in the current conditions. If they have a secure spot at a firm, they would rather keep that, even if it’s not their forever firm.

“It’s a down market. Nobody will dispute that,” Litvin said. Still, “I’m still trying to remain optimistic. If you have a partner with a big book of business … those things will continue to go on.”

The possibility of getting those pockets of business will keep recruiters by the phone.

“At the end of the day, if you have a book of business and it’s portable, and you want to make a move, there’s a firm that will hire you,” Prescott said, adding that “the reality is, there’s less portable business—it’s institutional—and the books are smaller.”