As the Western markets deal with steeply increasing numbers of infections and deaths from COVID-19 and its seemingly inexorable spread, and as a result governments in Europe and across the Atlantic finding it necessary to impose lockdowns on the public, it is difficult to envisage anything but lockdown in the laterals market. In Asia, the so-called “second wave” of infections over recent weeks has given pause to those who felt that we had ridden out the worst of the crisis, and that everyone could look to getting back to normal. It’s easy to look at recent figures to try to read patterns – the number of lateral hires in the major Asian markets is down by around 30% in March compared with February, which can be taken at face value to be a natural reaction to the effects of the virus on the markets. Since lateral hires can take months from inception to completion (especially when notice periods and gardening leave requirements are factored in), drawing conclusions from a spike in hiring activity is facile. Equally, unlike drawing conclusions from variances in birth rates throughout the year, identifying a period when firms are most active in activating hiring projects is also tricky. A sudden dip in hires, however, has different connotations
What would be interesting to learn is how many potential hires have been pulled in recent weeks in reaction to the economic downfall. Months of preparation and careful economic planning must have been thrown into turmoil. Are firms prepared to look at the long term and stick with a hire they believe will contribute in the future, writing off the first few months? Do they (potentially indefinitely?) delay a hire in the hope that they will be able to re-engage, taking the risk that the hiree’s head won’t be turned by another suitor in the meantime? Do they pull the plug entirely and retrench further? Certain lawyers can be retooled into different areas as the economy peaks and troughs. Certain areas surge in a downturn, and we can expect hiring activity to be ramped up in restructuring and insolvency, for example.
As yet, firms do not seem to be engaging in staff culls. The financial crisis of 2008 saw a relatively swift strategy realignment amongst most law firms which does not seem to have been mirrored in these circumstances yet. Perhaps there is a greater sense of uncertainty in terms of the long term effects of this crisis, perhaps there is even a more humane attitude in terms of what this crisis has affected beyond the bottom line of a balance sheet, which is in turn affecting staffing decisions.
Even the short term in this situation is impossible to predict, as was noted above with the “second wave” effect in certain Asian territories (although China is bullish about reigniting its economy with a drive to get the industrial and retail markets back up and running), and the increasing prevalence in the West. As seems to have been the case for some months now, we can only wait and see.