David Lat Recovers, Returns to an Industry Upended by Contagion

When he emerged from a 17-day hospital battle with Covid-19, legal news pioneer David Lat learned the legal industry had been turned upside down, again.

A dozen years ago, Lat, 44, was founding editor of Above the Law, a provocative legal news website launched in 2006 on the cusp of a global financial crisis when thousands of lawyers lost their jobs in Big Law layoffs and cutbacks.

“I covered the Great Recession, and I do see a lot of similarities now with a sense of great crisis and great concern over what is happening in the economy,” a convalescent Lat told Bloomberg Law, his voice raspy after spending six days on a ventilator to assist his breathing.

When he was hospitalized on March 16, the coronavirus had shuttered law firm offices in major cities, but hadn’t yet forced firms to adopt serious cash-saving measures. By the time Lat emerged, a number of Big Law firms had announced moves like pay cuts and furloughs to pare back their financial exposure to whatever economic damage the pandemic will bring to their business.

“I went into the hospital when things were booming, and now a month later, it’s a time of uncertainty,” Lat said. “But it’s not in freefall.”

Sharing Intel

Lat’s assessment of how the legal industry will meet the challenges posed by the pandemic draws on his experiences as a Yale Law student, federal appeals court clerk, major firm associate, assistant federal prosecutor and, later, as a full-time observer of the inner workings of Big Law. Last year he added to that resume the title of legal recruiter, while continuing to write on legal issues.

It was while working as a federal prosecutor in the U.S. attorney’s office in Newark, N.J. that he caused a stir by anonymously publishing a gossipy blog about judges titled “Underneath Their Robes.”

Lat later confessed authorship of the blog he called “simultaneously worshipful and irreverent” to the New Yorker’s Jeffrey Toobin.

He decided to help launch Above the Law after a brief stint at the satirical and political website Wonkette in early 2006. Aimed at lawyers, Above the Law quickly drew a devoted audience by tracking actual law firm compensation, particularly for associates, based on internal figures funneled to him by firm lawyers.

“Part of launching a site aimed at lawyers is being able to say you know what lawyers deal with and you understand the legal profession in all of its complexity,” Lat said. “Having worked as a law clerk, a Big Law associate, and as a prosecutor, I felt more comfortable writing about the courts, law firms, and the government.”

Above the Law’s revelations about compensation, one of the most important and often most mysterious aspect of law firm life, became a must-read.

“We would regularly remind readers to send us information by email and by text message. But, to be honest, much of the time it is in the readers’ own interest to feed us information,” Lat said. “Take something like pay raises. Readers feed us information so that we can cover raises and, hopefully, get their law firm to raise pay.”

Difficult Lessons

Last year, Lat joined legal recruiting firm Lateral Link where he’s now a New York-based managing director.

Lat said he believes Big Law firms will apply lessons learned from the depletion of lawyer ranks that characterized the Great Recession. While firms then trimmed partners—ousting some and de-equitizing others—the brunt of the pain was felt in the lower ranks.

Beginning and mid-level associates were laid off at a number of firms, who pared their ranks based on seniority. Once the economy began to recover, firms found they missed the talent.

Above the Law “played a prominent role in blowing the whistle on firms engaged in ‘stealth layoffs,’” Lat said. “Firms were quietly letting a large number of lawyers go, over an extended period of time, and claiming it was performance-based even though the real driver for the cuts was economic.”

“When they saw that we were publishing internal memos about what layoffs, pay cuts, pay freezes and the like were going on inside firms, firm leaders began realizing they needed to be more open about disclosing and explaining what they were doing to weather the crisis,” Lat added.

Giving employees a channel to disclose what firms were doing behind the scenes forced management to become more transparent in disclosing and acknowledging employee-related actions, he said. And firms benefited by being able to see what their competitors were doing.

Law firms have also stopped hiding reductions in force by blaming them on “poor performance.” Years ago, that label left those laid off for economic reasons during the Great Recession struggling to find new employment.

Law firms, Lat said, “are making moves now that seem smart and fair by temporarily cutting back partner compensation and bonuses, among other actions, and that is better than widespread layoffs.”

But, he warned, “we haven’t reached bottom yet. There are tons of firms we haven’t heard from yet, and the law firm world often reacts slowly, so there could well be more cuts coming.”

Skill and Luck

Lat isn’t back to his recruiting work yet, but he already sees that hiring is cooling. “People are worried and nervous,” he said. “I’m telling people that I’m keeping an eye out for them, but the market is very tough.”

He noted that some hiring activity is continuing in the bankruptcy space due to recessionary fears.

Lat said some litigation boutiques are still looking to hire, and that there is still room for some transactional hires as corporations financially re-position themselves.

It is difficult for experienced lawyers to “retool” themselves for market openings, he said. “It’s very hard after the second year for lawyers to reinvent their experience unless they go out on their own. A law firm looking for a litigator wants that kind of experience, and not to train someone,” he said.

“What isn’t talked about is that luck has a huge role in legal careers.”