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With Canada’s economy now clearly on its way into a recession, many young lawyers will find themselves facing a serious economic downturn for the first time in their careers. But lawyers can make smart decisions now to help prevent their careers from cooling along with the economy.
Canadian law firms have enjoyed strong growth since the last recession 15 years ago, despite some setbacks in the early 2000s from the burst of the dot-com bubble and the aftermath of September 11. Law firm mergers and expansions, increased mobility and an aging workforce have meant unprecedented opportunities for young lawyers. Similarly, in the nation’s corporations, economic growth and an increased post-Enron focus on corporate governance have resulted in numerous in-house options. Is that all about to change?
South of the border, the economic slowdown has brought a wave of associate layoffs and salary freezes. The cooling started earlier and is happening more quickly than in Canada, however, and big American law firms are notorious for sky-high starting salaries (now near $160,000) and beefy junior associate ranks. Some would say the belt-tightening was inevitable.
That’s not to say that Canada will see the same effect. Thanks to the economic boom of recent years and the multitude of domestic and international opportunities for young lawyers, Canadian law firms have been dreadfully understaffed at the associate level. (That’s especially true in Atlantic Canada, where associate salaries still don’t compete with those of larger centres like Toronto, Calgary and Vancouver, and bright young lawyers continue to stream out of the region.)
It’s unlikely that those firms will push out many of the associates that they have fought so hard to recruit and retain. And a slowdown could actually come as welcome news to many associates who lament the long hours and lifestyle sacrifices of private practice.
Historically, however, recessions mean a lower gross domestic product, a higher unemployment rate, and higher government deficits. These factors affect the bottom line of many Canadian businesses, especially in sectors such as manufacturing, and result in less work for both their internal and external lawyers.
Plan for the fallout
So it pays for lawyers at any stage of their careers to be prepared and proactive. What can you do?
If you are a lawyer in private practice, ensure that your firm has a vision of where it’s going and what it will do if an economic downturn affects its existing client base. Look out for yourself — if you’re relying entirely on your firm to provide you with clients, it’s time to focus on marketing and developing your own clientele who will support you in a less than robust economy.
Consider diversifying. If all your clients come from the manufacturing sector, for example, find ways to branch out to other industries or areas of law. An economic slowdown can create opportunities for lawyers as certain practice areas, such as litigation, bankruptcy and insolvency, thrive during economic downturns. If you are considering a career move, explore opportunities now, rather than after your firm decides to downsize.
If you’re an in-house lawyer, use your legal experience to help the company find ways to reduce costs and risk during the slowdown. Again, try to diversify your role by, if possible, being as much a business advisor as a legal advisor to the company. Don’t let your company pigeonhole you into a narrow area of practice from which you’ll be unable to branch out. Instead, focus on building your skills in marketable areas, such as corporate governance, tax, securities and transactional work.
Although a recession is painful, your career development doesn’t have to suffer along with it. View it as a turning point, rather than a setback, and focus on making your legal skills marketable, diverse and flexible enough to withstand economic upheavals.
Christine Doucet is a lawyer practicing family law and litigation at a boutique firm in downtown Halifax, Nova Scotia and is Public Relations and Communications Chair of the Nova Scotia branch of the CBA. Prior to returning to private practice in March 2008, she worked in the legal recruitment field.