The Experience Gap

As the economy improves and deals begin to flow into Silicon Valley anew, firms are again relying on mid-level corporate associates to do a lot of the work. Trouble is, 3 years of deal drought have left many of those associates short on the experience necessary to handle the tasks.

“There is a hollowing out of lawyering skills in Silicon Valley,” says Weil, Gotshal & Manges partner Rod Howard. Some young lawyers “don't have a normal, reasonable toolbox.”

Mid-level associates are valuable to firms because they have more experience than rookie attorneys, yet usually are not involved in originating their own deals, as are more senior associates and partners. Instead, firms rely on mid-level associates to do a substantial amount of the work associated with corporate deals, ranging from conducting due diligence to writing first drafts of crucial documents.

During the economic boom of the late 1990s and into 2000, scores of mid-level corporate associates were kept busy in the Valley, handling a flood of deals, particularly IPOs and venture capital work.

When the bubble burst, several firms laid off lower-level associates, and the associates who were left struggled to stay busy. Further robbing those associates of substantive work were clients who insisted on working directly with partners – who suddenly were more available.

Now that work is picking up again, firms are struggling to cope with thin ranks among those associate classes, particularly the classes of 2000 and 2001. And many of the associates that rode out the recession and stayed at firms don't have the skills they should.

“Firms want a consistent level of experience among all their ranks to properly staff deals,” says Carl Baier, president of Baier Legal Search and a former Wilson Sonsini Goodrich & Rosati litigator. “You can't have six partners and one first-year working on a deal ' or vice versa, for that matter.”

These days, managing partners and recruiters scrutinize associates' experience more closely than they once did, Baier says.

For example, he says, “third-year” is no longer shorthand for a particular level of experience. “People want to know if they were just playing Ping-Pong at the printer or what they were actually working on.”

Wilson partner Martin Korman says most of his firm's associates remained busy after the tech crash, in part, because the firm did lose so many people. Between 2001 and 2003, Wilson shed more than 130 lawyers, thinning its ranks to a current level of about 570.

Korman admits, however, that stagnation in the capital market cheated a whole class of associates of experience in that arena. Now, Wilson's more veteran lawyers are helping the rookies play catch-up, he says.

“Our more senior associates were generally around in the bubble period when capital markets were going crazy, and partners certainly remember that,” he says. “It's essentially taking our experience out of winter storage and getting ready for the spring bloom in the capital markets.”

Like other firm managers, Korman expects experience levels to even out as firms handle more work, as happened after the recession of the early 1990s.

Wilson senior associate Paul Shinn was lucky enough to land in the Valley in the mid-1990s, when corporate work was plentiful.

“When the dot-com bust hit, the people I felt sorry for were the people behind me. They didn't see the same kind of deal flow as we did during the boom,” Shinn says.

On the other hand, Shinn notes, a less hectic pace gave those associates more time to learn the finer points of a deal.

“Those who stayed are successful. They just had to be more aggressive to get on those deals,” he says.

At Latham & Watkins, associates in Silicon Valley “did fine in terms of opportunities,” says Chairman Robert Dell, because that office didn't engage in excessive hiring during the boom and remained busy through the bust.

Yet Dell concedes that the skill base of younger lawyers “is heavily impacted by the number of opportunities they have to engage in interesting work. So in a time of relative drought, it stunts their development to some degree.”

Some Valley lawyers are even questioning the skill base of senior associates ' those with roughly 7 years in action. During the 4 years of the tech craze, Valley firms were “pushing out paper” in cookie-cutter IPOs and other deals, Weil, Gotshal's Howard says: “It was about speed. It was the commoditization of lawyering.”

Wilson's Korman disagrees. “If you're cutting IPO cookies, and you're cutting capital market cookies. … Well, I guess that makes you a baker.”

Gray Cary Ware & Freidenrich corporate partner Diane Holt Frankle is looking on the sunny side ' for veteran partners, at least. Quips Frankle, “It's good for old people like me. It makes us more valuable.”

As the economy improves and deals begin to flow into Silicon Valley anew, firms are again relying on mid-level corporate associates to do a lot of the work. Trouble is, 3 years of deal drought have left many of those associates short on the experience necessary to handle the tasks.

“There is a hollowing out of lawyering skills in Silicon Valley,” says Weil, Gotshal & Manges partner Rod Howard. Some young lawyers “don't have a normal, reasonable toolbox.”

Mid-level associates are valuable to firms because they have more experience than rookie attorneys, yet usually are not involved in originating their own deals, as are more senior associates and partners. Instead, firms rely on mid-level associates to do a substantial amount of the work associated with corporate deals, ranging from conducting due diligence to writing first drafts of crucial documents.

During the economic boom of the late 1990s and into 2000, scores of mid-level corporate associates were kept busy in the Valley, handling a flood of deals, particularly IPOs and venture capital work.

When the bubble burst, several firms laid off lower-level associates, and the associates who were left struggled to stay busy. Further robbing those associates of substantive work were clients who insisted on working directly with partners – who suddenly were more available.

Now that work is picking up again, firms are struggling to cope with thin ranks among those associate classes, particularly the classes of 2000 and 2001. And many of the associates that rode out the recession and stayed at firms don't have the skills they should.

“Firms want a consistent level of experience among all their ranks to properly staff deals,” says Carl Baier, president of Baier Legal Search and a former Wilson Sonsini Goodrich & Rosati litigator. “You can't have six partners and one first-year working on a deal ' or vice versa, for that matter.”

These days, managing partners and recruiters scrutinize associates' experience more closely than they once did, Baier says.

For example, he says, “third-year” is no longer shorthand for a particular level of experience. “People want to know if they were just playing Ping-Pong at the printer or what they were actually working on.”

Wilson partner Martin Korman says most of his firm's associates remained busy after the tech crash, in part, because the firm did lose so many people. Between 2001 and 2003, Wilson shed more than 130 lawyers, thinning its ranks to a current level of about 570.

Korman admits, however, that stagnation in the capital market cheated a whole class of associates of experience in that arena. Now, Wilson's more veteran lawyers are helping the rookies play catch-up, he says.

“Our more senior associates were generally around in the bubble period when capital markets were going crazy, and partners certainly remember that,” he says. “It's essentially taking our experience out of winter storage and getting ready for the spring bloom in the capital markets.”

Like other firm managers, Korman expects experience levels to even out as firms handle more work, as happened after the recession of the early 1990s.

Wilson senior associate Paul Shinn was lucky enough to land in the Valley in the mid-1990s, when corporate work was plentiful.

“When the dot-com bust hit, the people I felt sorry for were the people behind me. They didn't see the same kind of deal flow as we did during the boom,” Shinn says.

On the other hand, Shinn notes, a less hectic pace gave those associates more time to learn the finer points of a deal.

“Those who stayed are successful. They just had to be more aggressive to get on those deals,” he says.

At Latham & Watkins, associates in Silicon Valley “did fine in terms of opportunities,” says Chairman Robert Dell, because that office didn't engage in excessive hiring during the boom and remained busy through the bust.

Yet Dell concedes that the skill base of younger lawyers “is heavily impacted by the number of opportunities they have to engage in interesting work. So in a time of relative drought, it stunts their development to some degree.”

Some Valley lawyers are even questioning the skill base of senior associates ' those with roughly 7 years in action. During the 4 years of the tech craze, Valley firms were “pushing out paper” in cookie-cutter IPOs and other deals, Weil, Gotshal's Howard says: “It was about speed. It was the commoditization of lawyering.”

Wilson's Korman disagrees. “If you're cutting IPO cookies, and you're cutting capital market cookies. … Well, I guess that makes you a baker.”

Gray Cary Ware & Freidenrich corporate partner Diane Holt Frankle is looking on the sunny side ' for veteran partners, at least. Quips Frankle, “It's good for old people like me. It makes us more valuable.”