NALP Exec. Dir. Leipold: Change in Biglaw hiring "permanent" Forum

[JCougar]

There was a huge run-up from 2005-2007. The number of NLJ 250 spots went up from 5,376 in 2005 to 7,131 in 2007 (+33%): http://www.law.georgetown.edu/academics ... rticle.pdf (pg. 2). My estimate is that there were about ~4,500-5,000 NLJ 250 jobs in 2011, and probably over 5,000 in 2012 (based what I've read about summer recruiting for C/O 2012).

In terms of big law hiring, I don't think we're far off from pre-boom hiring numbers.

That's actually an incredibly fascinating article you linked to. Reading it gives me more hope that at least someone in this industry has their head screwed on straight.

Needless to say, it supports a lot of what I'm saying, aside from the statistic you quoted. It should be a must-read for everyone who participates in this thread, and basically everyone involved in the legal industry.

[IAFG]

Clients paying a premium for name brand legal services isn't inconsistent with the Cravath model changing. Of course there will still be elite firms full of highly-paid experts in certain areas. But if clients are paying that much, they're going to demand experienced, proven attorneys rather than first-year associates that don't know anything.

Where are those experienced attorneys going to come from, praytell?

Where wouldn't they come from? Ones that show aptitude in the work world, wherever they are working...smaller firms, agency work, you name it.

So biglaw hiring will die but small law and gov't work will produce enough midlevels to satisfy the whole industry... really? Midlevels with no experience in biglaw practice areas, no less.

[JCougar]

Seyfarth Shaw Chicago hired from NU c/o 2011. Like most major firms, they have gone back to their old ways.

When I talked to them, it was c/o 2013 (Summer 2012) where they completely shut down their summer program, so that doesn't prove anything. They're moving to strictly hiring laterals.

[JCougar]

So biglaw hiring will die but small law and gov't work will produce enough midlevels to satisfy the whole industry... really? Midlevels with no experience in biglaw practice areas, no less.

I think you overestimate the number of practice areas that are solely the province of Biglaw. Also, Biglaw accounts for a surprisingly small percentage of practicing lawyers, as should be obvious by now. So yes, there are plenty of non-biglaw mid-levels out there that would be interested in lateraling.

[IAFG]

So biglaw hiring will die but small law and gov't work will produce enough midlevels to satisfy the whole industry... really? Midlevels with no experience in biglaw practice areas, no less.

I think you overestimate the number of practice areas that are solely the province of Biglaw. Also, Biglaw accounts for a surprisingly small percentage of practicing lawyers, as should be obvious by now. So yes, there are plenty of non-biglaw mid-levels out there that would be interested in lateraling.

Um the question has never been a matter of lack of interest among non-biglaw lawyers.

[IAFG]

There was a huge run-up from 2005-2007. The number of NLJ 250 spots went up from 5,376 in 2005 to 7,131 in 2007 (+33%): http://www.law.georgetown.edu/academics ... rticle.pdf (pg. 2). My estimate is that there were about ~4,500-5,000 NLJ 250 jobs in 2011, and probably over 5,000 in 2012 (based what I've read about summer recruiting for C/O 2012).

In terms of big law hiring, I don't think we're far off from pre-boom hiring numbers.

That's actually an incredibly fascinating article you linked to. Reading it gives me more hope that at least someone in this industry has their head screwed on straight.

Needless to say, it supports a lot of what I'm saying, aside from the statistic you quoted. It should be a must-read for everyone who participates in this thread, and basically everyone involved in the legal industry.

This was a lot more interesting a paper in 2008, before we knew how firms and clients would handle the crash.

[IAFG]

Seyfarth Shaw Chicago hired from NU c/o 2011. Like most major firms, they have gone back to their old ways.

When I talked to them, it was c/o 2013 (Summer 2012) where they completely shut down their summer program, so that doesn't prove anything. They're moving to strictly hiring laterals.

Laterals or non-summers?

[JCougar]

Seyfarth Shaw Chicago hired from NU c/o 2011. Like most major firms, they have gone back to their old ways.

When I talked to them, it was c/o 2013 (Summer 2012) where they completely shut down their summer program, so that doesn't prove anything. They're moving to strictly hiring laterals.

Laterals or non-summers?

Laterals.

[JCougar]

There was a huge run-up from 2005-2007. The number of NLJ 250 spots went up from 5,376 in 2005 to 7,131 in 2007 (+33%): http://www.law.georgetown.edu/academics ... rticle.pdf (pg. 2). My estimate is that there were about ~4,500-5,000 NLJ 250 jobs in 2011, and probably over 5,000 in 2012 (based what I've read about summer recruiting for C/O 2012).

In terms of big law hiring, I don't think we're far off from pre-boom hiring numbers.

That's actually an incredibly fascinating article you linked to. Reading it gives me more hope that at least someone in this industry has their head screwed on straight.

Needless to say, it supports a lot of what I'm saying, aside from the statistic you quoted. It should be a must-read for everyone who participates in this thread, and basically everyone involved in the legal industry.

This was a lot more interesting a paper in 2008, before we knew how firms and clients would handle the crash.

Yup. And from what we're seeing, Mr. Henderson is being proven correct. Change like that doesn't happen overnight, though.

[09042014]

There was a huge run-up from 2005-2007. The number of NLJ 250 spots went up from 5,376 in 2005 to 7,131 in 2007 (+33%): http://www.law.georgetown.edu/academics ... rticle.pdf (pg. 2). My estimate is that there were about ~4,500-5,000 NLJ 250 jobs in 2011, and probably over 5,000 in 2012 (based what I've read about summer recruiting for C/O 2012).

In terms of big law hiring, I don't think we're far off from pre-boom hiring numbers.

That's actually an incredibly fascinating article you linked to. Reading it gives me more hope that at least someone in this industry has their head screwed on straight.

Needless to say, it supports a lot of what I'm saying, aside from the statistic you quoted. It should be a must-read for everyone who participates in this thread, and basically everyone involved in the legal industry.

It supports the idea that it could happen, or even should. But it's not actually happening. And the article touches on reasons why it's not. Firms are afraid of signalling they are second tier. And firms are run by people who are stubbornly biased towards the system that created them. Law services are hard to quantify. Reputation is supreme.

I think one thing the article gets wrong, is the ideal that associates salary is something that is a burden on partners. And therefore partners should have great incentive to lower that cost. But, with the way hours are billed, that's not really the case. The partners are selling the associates time for so much money BECAUSE the associate has the right credentials. The partners can't try to find lesser "talent" (by absurd law prefstige standards) then try to sell it for full price to a client. These law firms exist based on leveraging the associates. The partners themselves couldn't bill all that revenue themselves.

Tomorrow Jones Day could fire their Summers and rehire new ones for 50K. But now Jones Day has a reputation for having shitty associates and nobody is going to pay them top dollar for that work.

So the partners of existing firms really benefit from the status quo.

I think it would take firms starting from scratch and growing into competitors for this to occur. And I think in some fields it's happened. Patent Prosecution is kinda going the way the article describes. Because it's more fungible and results oriented.

[ms9]

here is what I mean by the Cravath model being dead. The old model, which I have a great deal of fond memories of, was that BigLaw would hire in large numbers knowing that attrition would separate the wheat from the chaff in the truest sense of that overused phrase. The philosophy is strangely enough like that of the military.

The new model is that BigLaw hires a considerably smaller number and puts more resources towards retention and training.

You guys are certainly correct in that the promotional structure of large firms is still the same, although even so that too is impacting a much smaller number of law graduates.

[dingbat]

here is what I mean by the Cravath model being dead. The old model, which I have a great deal of fond memories of, was that BigLaw would hire in large numbers knowing that attrition would separate the wheat from the chaff in the truest sense of that overused phrase. The philosophy is strangely enough like that of the military.

The new model is that BigLaw hires a considerably smaller number and puts more resources towards retention and training.

You guys are certainly correct in that the promotional structure of large firms is still the same, although even so that too is impacting a much smaller number of law graduates.

That's a misreading if the situation.
The firms were making money off their associates fairly early on because they could bill them out at a high rate. Businesses are less willing to pay top dollar for grunt work, so there's less work for first year associates, and so less first year associates get hired.
But, as Rayiner pointed out, it's it a cataclysmic shift, just a return to preboom numbers.

During the boom, more associates jumped shop because there was more opportunity to do so, no more.
The cravats model wasn't to hire a lot of people and see what sticks, it was hire the most promising students and if they don't progress well enough get rid of them.
They just figured there's no reason to keep overpriced senior lawyers in favor of cheaper mid-levels (does a 12th year associate add enough value compared to a 5th year to justify the higher salary?)

[ms9]

Also, hey Jcougar. What's up? How are things for you and your career to be? All my best to everyone!

[JCougar]

It supports the idea that it could happen, or even should. But it's not actually happening. And the article touches on reasons why it's not. Firms are afraid of signalling they are second tier. And firms are run by people who are stubbornly biased towards the system that created them. Law services are hard to quantify. Reputation is supreme.

http://www.chicagorealestatedaily.com/a ... mbers-game

“Like it or not, the industry is moving away from trusted advisers, which lawyers like to call themselves, to providers of services,” says Chicago-based consultant Joe Altonji of LawVision Group LLC. “The same number of problems will take less time to solve. That's OK—that's efficiency. But you have to change your workforce as a result.”

The upshot, according to Bryan Schwartz, chairman of Chicago's Levenfeld Pearlstein LLC: “You need to find a way to do the work you don't want without killing your profitability.”

Legal consultant Kent Zimmermann says law firms, after a promising start to 2012, are suddenly confronting a down year because of an unexpected decline in corporate work. “Gains will likely be modest at firms that have them,” says the Chicago-based partner at California's Zeughauser Group.

Two years ago, boot maker Wolverine World Wide Inc. in Grand Rapids, Mich., shifted patent work to Seyfarth Shaw LLP when the Chicago law firm agreed to charge 15 percent less than what Wolverine was paying a hometown provider.
Shooting for a 25 percent discount, Wolverine put Seyfarth on an incentive contract, promising a minority share of the savings above an undisclosed threshold.

“For a long time lawyers have grown up in a system (charging by the hour) that's rewarded them for being inefficient,” says Kenneth Grady, Wolverine's deputy general counsel.

Before the crash, Chicago's Arnstein & Lehr LLP stopped hiring directly from law schools and was surprised by the media attention, Managing Partner Raymond Werner says. Since then, it has toyed with the idea of tryouts—testing applicants for their financial acumen.

“Making lawyers better businessmen is a constant challenge,” he says. “Really, until they're with you, it's hard to get a feel as to who they really are.”

Among Chicago's big law firms, Winston & Strawn LLP is hiring only half as many summer associates (60) as it used to, and has laid off associate attorneys.

“Clients are demanding more partner time and senior associate time and less junior associate time,” says Thomas Fitzgerald, managing partner.

The new emphasis on experienced, “lateral” hires has squeezed returns for the lowest-billing lawyers. Rates in the bottom quartile rose just 1.3 percent last year, according to legal software firm TyMetrix Inc. and research and advisory firm Corporate Executive Board Co.

Read more: http://www.chicagorealestatedaily.com/a ... z29fbpBnP2
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It's just not taking as fast as you guys would think, but attitudes are definitely changing.

[JCougar]

Also, hey Jcougar. What's up? How are things for you and your career to be? All my best to everyone!

I'm doing ok. People have been good to me here so far. Fall break has come at a good time, though.

[ms9]

Also, hey Jcougar. What's up? How are things for you and your career to be? All my best to everyone!

I'm doing ok. People have been good to me here so far. Fall break has come at a good time, though.

Stay sane! (I know it can be hard at times)

[RPK34]

A lot of the focus has been on what this means in terms of getting a job. But what does this mean for those who have a big law SA or permanent offer lined up? It seems with less work being given to juniors, with increased focus on midlevels. Does this mean that those going into law firms are less likely to be "forced out" after a couple years (although I have to admit, this business practice never made sense to me, since associates don't become profitable until years 2-3)? And increased lateral opportunities for midlevels?

It just seems like the legal world is growing into a bigger dichotomy of haves vs. have-nots. Those who get into big law in the first place and have more experience are going to be much more desirable than they were in boom years.

[JCougar]

A lot of the focus has been on what this means in terms of getting a job. But what does this mean for those who have a big law SA or permanent offer lined up? It seems with less work being given to juniors, with increased focus on midlevels. Does this mean that those going into law firms are less likely to be "forced out" after a couple years (although I have to admit, this business practice never made sense to me, since associates don't become profitable until years 2-3)?

That would seem to be one of the upsides to this, provided the firm has already "downsized" to meet client needs.

It just seems like the legal world is growing into a bigger dichotomy of haves vs. have-nots. Those who get into big law in the first place and have more experience are going to be much more desirable than they were in boom years.

If you're looking for experience alone, there are many jobs far better than Biglaw.

[09042014]

A lot of the focus has been on what this means in terms of getting a job. But what does this mean for those who have a big law SA or permanent offer lined up? It seems with less work being given to juniors, with increased focus on midlevels. Does this mean that those going into law firms are less likely to be "forced out" after a couple years (although I have to admit, this business practice never made sense to me, since associates don't become profitable until years 2-3)?

That would seem to be one of the upsides to this, provided the firm has already "downsized" to meet client needs.

It just seems like the legal world is growing into a bigger dichotomy of haves vs. have-nots. Those who get into big law in the first place and have more experience are going to be much more desirable than they were in boom years.

If you're looking for experience alone, there are many jobs far better than Biglaw.

Not many better if you are looking for experience in the type of law Biglaw firms practice.

[delusional]

This article is dead-on.

As it should be, because the author is about as informed, respected, and well-connected as you can get regarding the state of legal employment.

You can tell, because he wrote an article about something that everyone knows. The one part of the article that is enlightening is that Deans are asking him how to lie. Otherwise, it's NBD to say that business is down.

What I don't believe is that it's never going to come back. Right now, everything is a buyer's market. I worked in wholesale before law school, and everyone was suddenly complaining about the shipping cost, and the prices that they'd been paying for twenty years. Everyone I worked with went from whining about being underpaid to being happy to have a job. Is wholesale never coming back?

Big Law is funded by big business. Massive liquidity was right in their wheelhouse, and they killed it during the early 2000's. It may be a while before big business recovers, and the recovery might involve, iunno, supply chain innovation or something random that doesn't lead directly to immense billable hours, but ultimately, if the business model was remotely efficient in 2005, it stands a decent chance of being so again.

[JCougar]

Not many better if you are looking for experience in the type of law Biglaw firms exclusively practice.

FTFY.

What do they mostly exclusively practice? Antitrust, securities reg., M&A, etc. But if you're going to do Labor & Employment, Environmental, Property, and probably IP, etc., there's better places to learn. It's the nature of the work--in a larger organization, the new recruits are going to get the busywork that the seniors and partners don't want to do. You have less autonomy. You're going to get hands-on, higher level experience much sooner at a smaller firm. In litigation, you will get courtroom experience far faster in a smaller firm.

I know about a half-dozen people in Biglaw right now, and their complaints are all the same, even as they enter their 3rd and 4th years. "I never get any opportunity."

[dingbat]

I know about a half-dozen people in Biglaw right now, and their complaints are all the same, even as they enter their 3rd and 4th years. "I never get any opportunity."

And these same associates will be surprised when they get passed over for partnership or counselled out.