By Greg Andrews for Law.Com
Despite the barrage of headline-grabbing tech company layoffs lately, the bottom has not fallen out of the in-house attorney market, recruiters say. Far from it, in fact.
“The sky is not falling,” said Julie Q. Brush, CEO of Redwood Shores, California-based Solutus Legal Search. “There is still hiring activity in the market. I think that will continue.”
Added Mike Evers, president of Chicago-based Evers Legal Search: “There are clearly factors at play that would speak to a slowdown over time. But we are not in a hiring recessionary environment for legal work. We are still in a situation where demand exceeds supply.”
It’s understandable why in-house lawyers would feel a little rattled these days. The last two weeks have seen a historic blitz of tech layoffs, from Twitter’s chopping of half of its 7,500-person workforce last Friday to Meta’s dismissal of 11,000 workers on Wednesday.
But Brush said there are rock-solid reasons that legal departments are unlikely to bear the brunt of cuts as tech companies resize. For starters, she said, C-suite leaders, board members and investors have elevated the stature of in-house attorneys over the last 15 years, viewing them as key strategists in the business, not just lawyers.
On top of that, she said, tech firms are facing a daunting array of “bet the company” legal issues—on privacy and other topics—and “lawyers are needed to push the business forward and help protect the company.”
Then there’s the reality that cutting too many attorneys pushes work to outside counsel, whose hefty bills can quickly offset savings from job cuts.
Brush said a CEO recently suggested to her that the layoffs had set the stage for hiring a general counsel on the cheap. “I said, ‘Absolutely not. You are going to pay market.’”
That’s not to say the tech hiring market hasn’t softened. The market boomed late last year and until around this April, Brush said. It was the busiest market she’d seen in her more than two decades as a recruiter.
If that market was 100, we’re now at 45 to 50, Brush said. Some companies that posted legal jobs are pausing the actual hiring, but others are moving forward and finding candidates still have substantial leverage to negotiate lofty compensation.
At the peak, Brush said, when companies wanted to hire a candidate, their initial offer was above what the candidate was expecting. The candidate then would counter with an “outrageous ask,” which companies would then agree to.
Now, she said, the initial offer is slightly below what candidates were expecting. After candidates counter, companies are increasing their offers but not going all the way to what the candidate sought.
“The shortage of great candidates is forcing companies to remain very competitive on offers,” Brush said. “But the negotiation dynamic is changing, and companies are not willing to break the bank.”
The cooling of the market is a welcome development for more obscure tech companies that for years have struggled to find top candidates for their lawyer openings.
A general counsel of one third-tier tech company said that when the market was sizzling, typical candidates fell into three categories: They couldn’t cut it at the Metas, Alphabets or Amazons of the world, they could cut it but wanted better work-life balance, or they’re trying to break into the industry for the first time.
Such firms right now would welcome the opportunity to hire the laid-off talent, he said. But he’s not sure how long that will be the case. He said companies might batten down the hatches in 2023.
“Everyone I talk to right now expects this recession to get very bad,” he said. “You better get while the getting is good.”
Evers acknowledges the economic uncertainty. But he said that for now the tumult in tech is unearthing potential candidates who went to Top 20 law schools who, in a different environment, might be out of reach for his clients, which are in less-sexy industries such as manufacturing, distribution and dining.
Evers said it’s not just the laid-off attorneys who might fill his openings. He noted that lawyers value stability, something few Twitter attorneys are probably feeling in the wake of Elon Musk’s $44 billion purchase of the social media network.
“There is talent to be had, and people like me are going after that talent as we speak,” Evers said.
“My view is any lawyer at Twitter is in play. Whether they have been laid off or not, they have got to have their eyes wide open in response to what’s next,” he said. “When a company lays off half its workforce, the other half starts looking.”