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Talent poaching is en vogue as firms rebuild after recession

Practice areas and even entire law firms have been weakened by the most recent recession and the slow recovery, but some of the stronger and larger firms have been recruiting attorneys looking to join a new organization where they can help start a practice or enhance an existing area.

Behind the scenes, many top-level attorneys throughout the state say aggressive firms trying to expand their footprints in New Jersey have taken to raiding homegrown partners, offering higher compensation without regard to longevity or corporate culture — turning law into more of a business than a profession.

“There’s no question that goes on, and that our attorneys get targeted by other firms that are aggressively looking to add people, whether it’s to add critical mass or whatever it may be,” said W. Raymond Felton, co-managing partner at Greenbaum, Rowe, Smith & Davis. In January, the Woodbridge firm added all 13 attorneys from the Farer Fersko law firm to improve its real estate and environmental practices, bringing its headcount to 113 attorneys.

Attorneys say the legal profession has undergone an evolution from the days when attorneys stayed with one firm for their entire career to an era of increased movement of senior people from firm to firm.

There are two reasons for that, Felton said: an established attorney’s ability to bring in new business, and the increasing specialization of law firms. Partners tend to be poached by firms, he said, “that provide a multitude of services, because clients are looking for more complete, if not full-service, law firms, and it’s harder for a boutique firm to have the whole range of services” a client wants.

Throughout an economic downturn that has driven many opportunistic and strategic mergers and acquisitions, firms that have not been as profitable as they once were have laid off lawyers, a natural effect of the business cycle, attorneys say, and efforts to retain the real rainmakers, or lure them away from competitors, makes good business sense. And though many firms say they would rather wait for interested attorneys to come to them, other firms have been out attracting new people and picking up new talent to complement their existing business.

A partner at McCarter & English LLP, New Jersey’s oldest law firm, said the firm has taken a proactive approach to retaining its top people while growing its practice areas.

“There’s no question that there is active poaching or attempted poaching by the biggest firms, but quite frankly, we’re in that market as well,” said Stephen M. Vajtay Jr., firmwide managing partner for the Newark-based firm. In the weak economy, “some firms have had bad years, and good people are looking to make a move — and we’re as active in that market as the out-of state competitors.”

Hiring experienced senior lawyers away from competitors can be easier, less costly and more efficient than it is for firms to grow their own people, part of reason why hiring out of law schools and the clerkships has fallen, attorneys said.

The heads of firms of all sizes are concerned these days about losing their top people, leading to increased retention efforts. Edward B. Deutsch, managing partner of McElroy, Deutsch, Mulvaney & Carpenter LLP, said his firm, which does not actively recruit from other firms, attempts to retain its top attorneys by emphasizing its culture and professionalism.

“You have to have an environment that has a level of collegiality, a level of professionalism, a level of respect for people,” Deutsche said. “Anybody who’s just interested in money will jump around and move around for a dollar here or a dollar there. We’re not interested in those people. We want the people who not only want to make a handsome income, but want to be in the environment that we’ve created and be part of the team.”

David Freinberg, CEO of LeClairRyan, said his firm — which has grown from 300 lawyers at the start of 2011 to 350 now — has planned expansions into other jurisdictions, such as Texas and Florida, providing a point of differentiation when it comes to hiring attorneys interested in making a move.

“What we do is seek to recruit talented and culturally compatible attorneys wherever they may be practicing,” Freinberg said. “We have, even during the past three years of an economic crisis, been actively recruiting, and we have grown our revenues and attorney headcount each year.”

E-mail to: ktarbous@njbiz.com
On Twitter: @KenTarbous

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