I have been surprised recently that a number of law schools, through their dean or their office of career services, have called on NALP generally and on me specifically to develop a more positive message about the entry-level job market. One request went so far as to urge me to describe the entry-level legal employment market as good. Ah, if wishing would only make it so
We also know that the large law firm hiring model is different than it was before the recession, and is not likely ever going to look like it did in the last years before the economic collapse. That is because the business environment for large law firms has changed in significant ways that are likely to be permanent, or at least it has changed because of trends that are not likely to reverse themselves.
I recently had the good fortune to hear Jim Jones speak again, this time at the International Legal Technology Association conference here in DC. He identified three changes that he thinks mark a tipping point for the U.S. legal services market. The first is a shift from what had for countless years been a seller’s market to a buyer’s market for legal services. That means that most of the critical business decisions about the relationship between clients and their law firms that used to be made by law firms are now made by client corporations. According to Jones that shift in the balance of power is not likely to reverse itself even if the U.S. economy improves significantly.
The other two major developments are the disaggregation of legal services and the drift toward alternative fee arrangements.
Finally, you should not count on getting a job at a big law firm that pays $160,000 a year, even if you are at the top of your class. Those jobs are an increasingly small part of the pie, and you are much more likely to make $45,000 to $60,000 when you graduate than you are $160,000.
This isn't from some troll or some scam-blogger. It's from the Executive Director of the National Association of Law Placement (NALP).
The coming efficiency crunch in the legal market is going to restrict Biglaw hiring even more than it already has. Clients are just not seeing the value of paying $300/hour for a first-year associate to do document review or research some obscure legal question when they can outsource that work to India or a temp agency for $50/hour.
The current Biglaw salary bubble is not a given in legal hiring. It was not too long ago that biglaw starting salaries were less than half what they are now. It's not hard to see them starting to drop when there is a glut of unemployed or underemployed lawyers willing and able to do the same work for much less. If clients remain in the driver's seat, this is eventually what will happen.
This is the stark reality, and yet the law school tuition bubble has yet to respond and correct itself. It just keeps going up and up, because students convince themselves that either the legal market will rebound, that they will beat the odds, that their school is good enough and reputable enough to supply them with a comfortable living given the debt load of its graduates even if they miss out on Biglaw, etc.
In short, this insane and irrational process is close to coming to the end. Don't be one of those people that jumps into the fire after the hiring bubble bursts, but before the tuition bubble responds. Either take a significant scholarship, or wait this one out.