Bear-market strategies for BigLaw longevity
With recession predictions on the rise, the question on the minds of many BigLaw attorneys is ‘How do I recession proof myself in a cooling economic environment?’ BigLaw associates—and especially newly minted and incoming BigLaw associates—want to know: ‘Which firms and/or practice groups are best positioned to weather the impending economic downturn? How do I ensure that I will not be laid off as demand for legal services inevitably dwindles?’
Due to these concerns, BigLaw attorneys are looking with fresh interest at countercyclical practice areas that they might not otherwise choose. They figure that now is not the time to be picky about assignments or take a 2-week vacation. The new consensus forming in BigLaw circles is to be wary of telling partners or staffers ‘no.’ Knowledge workers across industries have decided that the pandemic-induced self-care moment has passed. BigLaw noses are returning to the office—and the grindstone.
And while there is, of course, wisdom in buckling down during periods of economic turbulence, our view is that many of these common recession-proofing strategies pursued by BigLaw associates are not just ineffective, but misguided. In our experience, associates who take pains to ensure that they are the last ones to get laid off often find themselves among the first to burn out and quit. With that, here are 3 considerations that we believe are more deserving of associates’ attention in times of economic uncertainty:
1. Happy associates almost always outlast unhappy ones
One mistake that many associates make when fearful of potential layoffs is to double down on misery. They’ll volunteer for an extra project they don’t really have time for, or overpromise on some deliverable. To beef up their internal network, they’ll take on a bunch of new work for a partner who they know isn’t a good personality match. They’ll postpone or cancel a vacation.
The problem with these fear-based, layoff-prevention strategies is that associates often take them too far. While it can sometimes be important to show your dedication, it’s often more important to take care that your demonstrations of devotion don’t devolve into a form of self-sabotage. A captain does not weather the storm by running his ship aground.
Even in sluggish economic conditions, by far the greatest force driving associates out of BigLaw is burnout, not layoffs. Therefore, for associates determined to stay in BigLaw, we believe that the best way to actually achieve that outcome is through a pursuit-of-happiness, burnout-prevention strategy rather than through a pursuit-of-misery, layoff-prevention strategy.
In BigLaw, fighting burnout means focusing on happiness and job satisfaction. It means prioritizing your mental and physical health. You do this by keeping reasonably boundaries, not by abandoning them. You do it by focusing on the work that you enjoy, not by taking on projects that make you miserable. You do it by honoring your commitments with friends and family, not cancelling them. In our view, the surest path to hold onto your BigLaw job isn’t self-sacrifice, but self-preservation. No matter the economic environment, happy associates will almost always outlast unhappy ones.
Some may feel that focusing on happiness carries too much risk, but the truth is that your happiness is likely to elevate your standing at your firm, not diminish it. There is no associate more valuable than a competent, reliable and happy associate. To partners, they are BigLaw gold. If layoffs really are coming, then our bet is that competent, happy associates aren’t going to be the first ones shown the door.
Another disadvantage of the pursuit-of-misery, layoff-prevention strategy is that it can be very hard to get right. Are BigLaw firms really in trouble in the months and years ahead? Are layoffs really coming? We can all make predictions, but the vast majority of us will be wrong. These are very hard questions to answer. And then even if you accurately predict the recession, do you trust your ability to accurately predict how to preemptively guard against layoffs under economic conditions not yet present? The 'Anna Karenina' principle of economics teaches that while every happy bull market is alike, every bear market is unhappy in its own unique way. The next major recession is not likely to mirror the last one, so there is no guarantee that, for example, a layoff-prevention playbook based on lessons from 2008 would do well in 2022, 2023 or beyond.
In the end, our advice is this: focus your efforts where you know they will be impactful. Rather than pursuing questionable strategies that may or may not prevent a layoff that may or may not be coming, focus your efforts on creating the most enjoyable and sustainable BigLaw experience for yourself that you can.
2. Now is the time to aggressively save and invest
This will come as a surprise to exactly no one, but our top tip for recession proofing yourself is to aggressively save and invest. In an ideal world, BigLaw attorneys will be aggressively saving throughout their careers and regardless of the economic environment, but if you haven’t yet started doing so because you felt untouchable in the talent wars of 2021 and early 2022, now is the time.
The truth is that—unless you put yourself in a position of financial strength where your quality of life doesn’t depend your BigLaw job—you will always experience some sort of job-related fear. In a recession or looming recession, that fear can be paralyzing, leading to poor quality-of-life outcomes such as forfeited boundaries, overwork, burnout and general life dissatisfaction.
Even if a full-blown recession doesn’t transpire, there is already much talk of an industry-wide leverage shift. In the first couple of years since the start of the pandemic, BigLaw attorneys gained substantial leverage in the form of pay bumps, special bonuses, work-from-home flexibility and various other perks and benefits. A shifting employer-employee dynamic could erode that leverage. The salary scale remains intact, but some associates are already feeling the pressure to return to the office and take on more work than they otherwise would.
The best way to resist this pressure, regain the lost leverage and design a BigLaw job of your own choosing is to be financially independent from the job. In our view, much of the workplace stress that BigLaw attorneys experience is directly related to their inability to maintain their desired lifestyle and social standing without the job. It doesn’t have to be this way. To lower the stakes, BigLaw attorneys can spend well below their means, and save and invest their way into financial security that doesn’t require 4 decades’ worth of high-stress labor.
Special word of advice to incoming BigLaw associates who, on subreddits and elsewhere, are currently stressing about practice groups, layoffs and ways to hack their way into employment security.
While we understand that constant talk of a recession is not an ideal way to start a BigLaw career, we believe that the current economic climate presents incoming associates with a silver lining. Hear us out.
Yes—those of us who started in BigLaw over the last decade were blessed with a strong economy, but that also meant little reason to worry and little incentive to save. Virtually everyone we know—ourselves included—lifestyle inflated between the end of law school and the start of our BigLaw careers, which included ditching the roommates, procuring fancy apartments, new wardrobes and gadgets, and so on. And the thing about lifestyle inflation is that it’s near impossible to go back once you’ve inflated—the apartments, and then houses, keep getting bigger and an ever-increasing array of luxuries become necessities. So the surest way to financial independence is to never lifestyle inflate at all (or, more realistically, to inflate some from your law-school baseline, but very strategically, with a self-imposed cap on spending).
Incoming BigLaw associates who are worried about what the current economic climate means for their job security can consider delaying the meteoric lifestyle inflation that traditionally occurs upon transitioning from law school to BigLaw. Why not stick with your roommates for an extra year or two and focus on aggressively (1) paying off student loans and (2) saving and investing? (Looking back, we often wish we had done this ourselves.) Focus on developing strong financial habits and building your net worth right off the bat, and you’ll be in a far better position to weather any macroeconomic uncertainty.
3. Trust your BigLaw long-game strategy
Our final recession-proofing recommendation may seem a tough pill to swallow, but the best option for associates dealing with economic uncertainty is often to not make any dramatic changes to their overall BigLaw strategy. It’s perfectly natural to feel a burning sensation to do something to protect yourself when the economy starts to sour, but it’s sometimes best to resist that urge.
It’s not sexy, but the truth is that the advice we would give to associates seeking a stable and fulfilling BigLaw career doesn’t depend at all on the state of the U.S. economy.
The strategies we recommend for creating a thriving BigLaw career are the same regardless of whether the NASDAQ is going up or down, and regardless of whether the Fed is hawkish or dovish. Know your goals. Break down limiting assumptions. Set boundaries. Save money. Define success according to your own value system. Dream big. Take control. The economic environment may change, but the advice doesn’t.
Just like they say not to make emotional decisions to your investment portfolio in a downturn, we say the same thing about your approach to BigLaw. Yes, it’s perfectly sensible to make small tweaks around the edges, but it’s probably not advisable to upend your entire BigLaw strategy based on your largely unreliable predictions about the direction of the U.S. market for legal services. Sometimes the best thing you can do is to trust the process, and keep faith in yourself.