Making a case for temp lawyers
Nearly seven years ago, colleagues Rick Hammond and Myra Mendizabal sorted through a stack of resumes and applications spread across a living room floor, the only work space they could spare as they started a recruiting business out of an Encino home that Hammond shared with five roommates.
Since then, they have turned $8,500 in borrowed money into an employment agency with two offices in Los Angeles County high-rises, a staff of about 180 and, by their estimates, revenue growth of more than 50% a year.
Their product: lawyers.
Their company, Rhumbline Legal Solutions, provides attorneys and other legal staffers for short-term assignments and permanent jobs, and the company’s rapid growth highlights law firms’ expanding need for human resources as the size of the legal field and the complexity of litigation swell.
“There’s a supply-and-demand imbalance,” said John Childers, director at the Los Angeles office of legal consultant Hildebrandt International. “Whereas law firms have grown rapidly for the last 20 years, the supply of top legal talent hasn’t changed.” As a result, he said, “the use of contract lawyers is exploding.”
Hammond and Mendizabal caught the trend by starting Rhumbline in September 2000, after quitting their jobs at another legal staffing company. Paul Bartley, who lent them the start-up money and became a principal less than a year later, said the pair came to him with concerns that a bureaucracy was bogging them down.
“There was just too much backlog” preventing the personal contact with applicants that they craved, Bartley said. “They couldn’t focus on what they loved to do. I basically said, ‘Well, why don’t you do it yourself?’ ”
Mendizabal said it was “the perfect time” for the three, in their mid-20s and early 30s, to pinch pennies and take on the risk of a new venture, one they hoped would personalize the process of staffing law firms.
“We created a model that we thought would change the recruiting industry,” Hammond said. “If you’re going to work with people, you better like them.”
The aim was to take a one-on-one approach to recruiting. Mendizabal said at least one Rhumbline recruiter meets “every single candidate” placed. An application, Hammond said, “is not just a piece of paper that comes through the door.”
(Bartley, an amateur sailor and graduate of USC’s entrepreneurship program, suggested they name the company “Rhumbline,” after a navigational term that describes the path of a ship that maintains a fixed direction -- a notion of steadfastness and purpose.)
The company’s method has worked in building a repeat-client list that includes O’Melveny & Myers, one of Los Angeles’ largest law firms.
Rhumbline also benefited from good timing. In 2000, legal recruiting was a field with relatively few barriers to entry and a client base of law firms that over 20 years had become accustomed to out-of-house hiring.
The trend began in the 1980s, as East Coast law firms began opening offices on the West Coast, Childers said. “They didn’t have their own local contacts,” so they turned to recruiters who knew the turf .
Bartley said Rhumbline’s database of candidates was more complete and accurate than law firms’ because in-house recruiters don’t have time to meet with new graduates, more experienced job seekers and temporary staff at the same time. “To devote that much time to human resources is not economic,” he said.
One reason it’s difficult for law firms to find top talent is that many successful lawyers tend to stay put. “The best candidates are the candidates that are not looking,” said Theresa DeLoach, placement director at the Los Angeles office of Special Counsel Inc., a national legal staffing firm. And, she said, those candidates are getting about three times as many calls as before.
At the same time, law firms are dealing with cases that require increasingly detailed investigation. The electronic discovery process, which unveils e-mails, online chats, phone calls and other communications, burdens entry-level associates who finished law school with aspirations to more glamorous work.
“Litigation matters are becoming so enormous that firms can’t staff them with their own full-time associates,” Childers said. “A lot of the work becomes mundane, and they want to keep their associates that are on the partnership track engaged in interesting, diverse matters.”
So they turn to contract lawyers, in demand as technology makes ever-longer paper trails available. In at least one case, when a law firm called in a crisis, Rhumbline had to find dozens of lawyers over a single weekend.
“You have to drop everything,” Mendizabal said. Consultants at the firm combed through a database of thousands of lawyers, screened their profiles and suggested top candidates by the deadline, she said.
While there isn’t a typical temporary attorney, most aren’t looking for a long-term career in contract lawyering. Usually, they are just out of law school looking to gain experience, they are transitioning to a new lifestyle, such as motherhood or they need a break from working grueling, full-time hours.
Jason J. Poston worked through Rhumbline to find contract work between full-time jobs in business and entertainment law. In 1999, after graduating from USC’s law school and passing the bar, he was hired at Manatt, Phelps & Phillips, a full-service firm with offices in Los Angeles. Poston said that although the work was rewarding and he was treated well during his five years there, he wanted time to reevaluate his career.
“I needed to take a step back and make sure I was going in the right direction,” Poston said, “rather than being on this express train that was going a million miles an hour.”
After a year and a half of temporary work, he took a job at Beverly Hills’ Weissman Wolff Bergman Coleman Grodin & Evall, which acquired the company that contracted him through Rhumbline. Poston said it was his time on contract that led him to a smaller firm, an environment he prefers.
“That contract period was really important because it gave me time to get a sense of control,” he said. “This is an alternative career plan -- not recommended for everybody -- but I’ve been very happy.”
Hammond said that between its permanent-hire and contract-attorney businesses, Rhumbline’s 2005 revenue reached about $6 million.
The company charges about $40 to $150 an hour for contract-attorney work, Hammond said. And with direct-hire placement fees at about 25% of annual salary, the company’s bottom line has benefited from soaring attorney compensation. Childers estimated that top entry-level lawyers could make about $160,000 without bonuses.
Kara Jassy worked through Rhumbline to switch from Los Angeles’ McKenna Long & Aldridge to Littler Mendelson. She wasn’t planning to move until a USC law school friend at Rhumbline told her about an opening at the national labor law specialty firm.
“I wasn’t actively looking,” Jassy said, “but when I heard about the opening at Littler, I thought, why not?” The process, which took two interviews, was “easy-peasy.”
In May 2004, with six years’ experience, she was hired as an associate. In January, Jassy was named a partner. “I plan to be at Littler until retirement.”
