NY GOES TO 180k! IT HAPPENED!!!! (CovingTTTon does a 180! Holder wept.) Forum

[Desert Fox]

By fails to mention did you mean devotes an entire paragraph to?

Anyway, it's not like the top schools have had to cut their class sizes at all, so the pool of people the firms that might raise salaries draw from is the exact same size (tippy top of regional schools + t14).

Top schools will never have to cut their class sizes. The question isn't whether top schools are cutting class size, but whether the entering class is as qualified as previous entering classes. The answer based on test scores and medians at top schools appears to be no.

they already have what are you talking about

Really? I didn't think any of the top schools had cut their class sizes, but maybe I'm wrong on that.

anyway, I think the idea that firms are going to raise salaries because median LSAT scores are dropping by like a point is beyond absurd.

I think NU's current class is half the size of my class.

I think it's only down from like 270 to 213. A pretty big drop but not half.

[Johann]

apologies:
Cap: there is a decreasing need for new lawyers
Idiot: But 2007 had more new hires than 2016!!!

you can try to lawyer/word it how you want. but trying to spin having more entry level positions in an industry 10 years ago as a positive is only something a lawyer would do. there are 10 million more jobs (7%) in the US today than in 2007. the S&P500 is up almost 500 points (35%). lawyer new hires are down. that's concerning.

The problem is 2007-2008 was a crazy local maximum, so it's always gonna look bad compared to those years. If we wanna play the arbitrary endpoints game we can also say that biglaw hiring has doubled over the last 20 years. As always the truth is somewhere in the middle.

I didn't choose the "crazy" endpoint maximum. I'm using the exact dates someone else perceived as a decent argument for justifying the legal industry and showing how 10/10 business people would say, yeah that's a bad growth industry. Doubling over the last 20 years actually isnt that impressive either when you compare the growth in other industries. What has tech done in that time? Start-ups? S&P500? Choose any endpoints you want in our lifetime and peer professions will look much better.

[Tiago Splitter]

apologies:
Cap: there is a decreasing need for new lawyers
Idiot: But 2007 had more new hires than 2016!!!

you can try to lawyer/word it how you want. but trying to spin having more entry level positions in an industry 10 years ago as a positive is only something a lawyer would do. there are 10 million more jobs (7%) in the US today than in 2007. the S&P500 is up almost 500 points (35%). lawyer new hires are down. that's concerning.

The problem is 2007-2008 was a crazy local maximum, so it's always gonna look bad compared to those years. If we wanna play the arbitrary endpoints game we can also say that biglaw hiring has doubled over the last 20 years. As always the truth is somewhere in the middle.

I didn't choose the "crazy" endpoint maximum. I'm using the exact dates someone else perceived as a decent argument for justifying the legal industry and showing how 10/10 business people would say, yeah that's a bad growth industry. Doubling over the last 20 years actually isnt that impressive either when you compare the growth in other industries. What has tech done in that time? Start-ups? S&P500? Choose any endpoints you want in our lifetime and peer professions will look much better.

Capitol Idea said there is a decreasing need for lawyers in biglaw. Saying "no there isn't" doesn't mean anyone thinks things are growing or that there aren't real issues here. There just isn't a decreasing need for lawyers in biglaw.

[DELG]

By fails to mention did you mean devotes an entire paragraph to?

Anyway, it's not like the top schools have had to cut their class sizes at all, so the pool of people the firms that might raise salaries draw from is the exact same size (tippy top of regional schools + t14).

Top schools will never have to cut their class sizes. The question isn't whether top schools are cutting class size, but whether the entering class is as qualified as previous entering classes. The answer based on test scores and medians at top schools appears to be no.

they already have what are you talking about

Really? I didn't think any of the top schools had cut their class sizes, but maybe I'm wrong on that.

anyway, I think the idea that firms are going to raise salaries because median LSAT scores are dropping by like a point is beyond absurd.

I think NU's current class is half the size of my class.

I think it's only down from like 270 to 213. A pretty big drop but not half.

Are you counting AJDs

[TLSModBot]

apologies:
Cap: there is a decreasing need for new lawyers
Idiot: But 2007 had more new hires than 2016!!!

you can try to lawyer/word it how you want. but trying to spin having more entry level positions in an industry 10 years ago as a positive is only something a lawyer would do. there are 10 million more jobs (7%) in the US today than in 2007. the S&P500 is up almost 500 points (35%). lawyer new hires are down. that's concerning.

The problem is 2007-2008 was a crazy local maximum, so it's always gonna look bad compared to those years. If we wanna play the arbitrary endpoints game we can also say that biglaw hiring has doubled over the last 20 years. As always the truth is somewhere in the middle.

I didn't choose the "crazy" endpoint maximum. I'm using the exact dates someone else perceived as a decent argument for justifying the legal industry and showing how 10/10 business people would say, yeah that's a bad growth industry. Doubling over the last 20 years actually isnt that impressive either when you compare the growth in other industries. What has tech done in that time? Start-ups? S&P500? Choose any endpoints you want in our lifetime and peer professions will look much better.

Capitol Idea said there is a decreasing need for lawyers in biglaw. Saying "no there isn't" doesn't mean anyone thinks things are growing or that there aren't real issues here. There just isn't a decreasing need for lawyers in biglaw.

Right now hiring is up over 2006-2007 levels. This is not a trend that will continue.

A number of firms are going to either go under, merge together, or radically change. And this is within the next 5 years, 10 at the absolute max.

So "right now" it's business as usual but we are looking at, yes, a smaller number of biglaw lawyers in the future.

Is this really a discussion that we're having?

[Tiago Splitter]

Right now hiring is up over 2006-2007 levels. This is not a trend that will continue.

A number of firms are going to either go under, merge together, or radically change. And this is within the next 5 years, 10 at the absolute max.

So "right now" it's business as usual but we are looking at, yes, a smaller number of biglaw lawyers in the future.

Is this really a discussion that we're having?

Hiring is not up over 2007. It's roughly the same as it has been for most of the last 15 years, during which time many firms have gone under, merged together and/or radically changed. I'm not sure why you're so confident the next 5 years will be the time for massive change in the number of people being hired by big firms.

[TLSModBot]

Right now hiring is up over 2006-2007 levels. This is not a trend that will continue.

A number of firms are going to either go under, merge together, or radically change. And this is within the next 5 years, 10 at the absolute max.

So "right now" it's business as usual but we are looking at, yes, a smaller number of biglaw lawyers in the future.

Is this really a discussion that we're having?

Hiring is not up over 2007. It's roughly the same as it has been for most of the last 15 years, during which time many firms have gone under, merged together and/or radically changed. I'm not sure why you're so confident the next 5 years will be the time for massive change.

I'm confident because I've been doing literally nothing but looking at the AmLaw financials for the past 10 years in depth, plus the AltmanWeil report, plus the Citi/Hildrebrand report, plus the Georgetown Report, plus a bunch of other stuff and it all points at downwards change and soon. 5 years might even be optimistic but never count out biglaw finding a way to persist.

[Tiago Splitter]

Right now hiring is up over 2006-2007 levels. This is not a trend that will continue.

A number of firms are going to either go under, merge together, or radically change. And this is within the next 5 years, 10 at the absolute max.

So "right now" it's business as usual but we are looking at, yes, a smaller number of biglaw lawyers in the future.

Is this really a discussion that we're having?

Hiring is not up over 2007. It's roughly the same as it has been for most of the last 15 years, during which time many firms have gone under, merged together and/or radically changed. I'm not sure why you're so confident the next 5 years will be the time for massive change.

I'm confident because I've been doing literally nothing but looking at the AmLaw financials for the past 10 years in depth, plus the AltmanWeil report, plus the Citi/Hildrebrand report, plus the Georgetown Report, plus a bunch of other stuff and it all points at downwards change and soon. 5 years might even be optimistic but never count out biglaw finding a way to persist.

I guess the question is if the arrow has been pointing down for at least the last 10 years why do they continue to hire the same number of graduates? I'm legitimately curious.

[TLSModBot]

ah no we're talking past each other.

The arrow hasn't been consistently point down. Rather, when the recession hit, things tanked precipitously and BigLaw crawled out to past 2006 levels on gross revenue and lawyer numbers, but things aren't actually going back to business as usual bc of a number of factors.

Mostly:
1. Technology - more efficient legal services and non-lawyer providers cutting in on market
2. Insourcing - in house counsel taking more work out of outside counsel's hands
3. Client Price Pressure - Realization has been dropping steadily for the past 10 years
4. More demand for efficiency = less staffing of first years -> more staffing of fewer experienced people > more need for midlevels and non-equity partners and fewer juniors.

[TLSModBot]

btw when we remove merged firms (which screw up calculations for a variety of reasons), the amlaw 200 new lawyer growth rate is slowing big time:

Net additions in non-partner lawyer numbers in Amlaw 200 each year:

2010: 1390
2011: 1137
2012: 1256
2013: 237
2014: 62

[Tiago Splitter]

btw when we remove merged firms (which screw up calculations for a variety of reasons), the amlaw 200 new lawyer growth rate is slowing big time:

Net additions in non-partner lawyer numbers in Amlaw 200 each year:

2010: 1390
2011: 1137
2012: 1256
2013: 237
2014: 62

Interesting. I guess they keep bringing in the same number of noobs but shove people out at a faster rate than in the old days.

They're also hiring staff attorneys en masse so the new hire numbers are probably a bit phony.

[TLSModBot]

yeah net numbers are tricky. I think this is the best we get when we exclude mergers because additions to the AmLaw 200 are more likely to be new lawyer hires than anything else (the alternative being midlevel associate laterals from outside the Amlaw 200 - I peg that as unlikely or extremely low in number).

[TLSModBot]

Fun facts:
1. Except for ONE YEAR during the recession, equity partners have never had income growth that hasn't trounced inflation (I mean ever. Like in their entire career).
2. Realization rates are going down.
3. Gross Revenue is nominally up but net flat when accounting for inflation
4. Expenses are up because firms are relying on more expensive senior lawyers in greater numbers
5. Profit margins are net down over the past decade at fully half of the AmLAw 200

[Aeon]

My general sense has been that hiring rates have gone down from what they were pre-crisis and that entry-level hiring has been barely at replacement levels.

Thanks for the figures, Capitol. Those net numbers are concerning. Barring any major changes, the golden age of BigLaw is coming to a close.

[TLSModBot]

They probably are net down because I removed merged firms. Post merger firms almost certainly hire fewer people than the two separate firms did combined.

We are definitely net up since before the recession (2006 and barely past 2007), but it's not really a growth trend so much as it is a barely limping recovery that might soon end.

The real issue is the bulge - the increases have been concentrated. So many firms are already shedding jobs which is concerning and a few very large firms are getting larger. Whee!

[Monochromatic Oeuvre]

ah no we're talking past each other.

The arrow hasn't been consistently point down. Rather, when the recession hit, things tanked precipitously and BigLaw crawled out to past 2006 levels on gross revenue and lawyer numbers, but things aren't actually going back to business as usual bc of a number of factors.

Mostly:
1. Technology - more efficient legal services and non-lawyer providers cutting in on market
2. Insourcing - in house counsel taking more work out of outside counsel's hands
3. Client Price Pressure - Realization has been dropping steadily for the past 10 years
4. More demand for efficiency = less staffing of first years -> more staffing of fewer experienced people > more need for midlevels and non-equity partners and fewer juniors.

These are all good reasons to think Biglaw won't return to pre-ITE figures, but not necessarily reasons to think that entry-level hiring is going to decrease immediately. After all, if you eventually want senior associates, you have to hire junior associates first. C/o '14 was slightly bigger than c/o '13, and though the NLJ data isn't out yet, the data we do have (plus sufficient anecdotal evidence) would make it a good bet that c/o '15 is bigger than c/o '14, and c/o '16 is bigger than c/o '15 (not sure about '17 yet).

Undoubtedly the factors you mention are relevant, and may very well cost us jobs down the line. But right now, there are still more firms planning on increasing class size than decreasing it.

[Aeon]

Yeah, the industry is changing. If anything, BigLaw is finally catching up to where many other sectors of the economy are already: greater consolidation and leverage (of owners relative to employees). I think accounting and the Big 4 are an apt comparison. I'd say also that, as slim as the chances have been historically of becoming a full partner, it'll become even more difficult.

[TLSModBot]

Yeah I didn't say immediately. I said we'd be net down in the near future, and permanently. And growth in staffers and non-partner track roles is more likely to happen than associates.

[Aeon]

These are all good reasons to think Biglaw won't return to pre-ITE figures, but not necessarily reasons to think that entry-level hiring is going to decrease immediately. After all, if you eventually want senior associates, you have to hire junior associates first.

I suspect we will see an increasing trend among law firms to rely heavily on recruiting laterals, similar to what Quinn has been doing.

[Tiago Splitter]

These are all good reasons to think Biglaw won't return to pre-ITE figures, but not necessarily reasons to think that entry-level hiring is going to decrease immediately. After all, if you eventually want senior associates, you have to hire junior associates first.

I suspect we will see an increasing trend among law firms to rely heavily on recruiting laterals, similar to what Quinn has been doing.

Laterals from where?

[Aeon]

These are all good reasons to think Biglaw won't return to pre-ITE figures, but not necessarily reasons to think that entry-level hiring is going to decrease immediately. After all, if you eventually want senior associates, you have to hire junior associates first.

I suspect we will see an increasing trend among law firms to rely heavily on recruiting laterals, similar to what Quinn has been doing.

Laterals from where?

That's exactly the point. Firms will run into a collective action problem.

[Monochromatic Oeuvre]

Yeah, not everyone's business model can be to recruit laterals.

Interested to see how Quinn does as the guinea pig on not having a summer program. I doubt a critical mass of students will really give up secure offers to chase DEM FLIP FLOPS. You can follow the Patterson model, but you risk becoming as irrelevant as Patterson (and Quinn is four times the size anyhow). Suspect they're just gonna take a fuckload of laterals, but I wonder if you can really take hundreds of laterals every year when most midlevels who already hate their firms enough to leave probably don't want to bill 2300 a year.

[Aeon]

Yeah, not everyone's business model can be to recruit laterals.

Interested to see how Quinn does as the guinea pig on not having a summer program. I doubt a critical mass of students will really give up secure offers to chase DEM FLIP FLOPS. You can follow the Patterson model, but you risk becoming as irrelevant as Patterson (and Quinn is four times the size anyhow). Suspect they're just gonna take a fuckload of laterals, but I wonder if you can really take hundreds of laterals every year when most midlevels who already hate their firms enough to leave probably don't want to bill 2300 a year.

It looks like they are actively recruiting judicial clerks: http://www.top-law-schools.com/forums/v ... 4&t=258663.

[TLSModBot]

If it doesn't work Quinn can just shift back to having a summer program. I don't agree with all their INNOVATIONS but the fact that they're trying something, anything is interesting (I'd say 'positive' but I get the impression they're still desperately trying to protect their PPP and profit margins at all cost which is weird because if anyone could afford to hedge a little on the profit front it'd be Quinn, the highest profit margin firm in the AmLaw 200).

[Anonymous User]

These are all good reasons to think Biglaw won't return to pre-ITE figures, but not necessarily reasons to think that entry-level hiring is going to decrease immediately. After all, if you eventually want senior associates, you have to hire junior associates first.

I suspect we will see an increasing trend among law firms to rely heavily on recruiting laterals, similar to what Quinn has been doing.

Laterals from where?

That's exactly the point. Firms will run into a collective action problem.

Every lateral my firm has hired this year was from SIGNIFICANTLY downstream prestige-wise. Not biglaw at all.