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

[Anonymous User]

Not sure exactly how this fits into the discussion (hoping someone can tell me how/if it does), but I just recently spoke with the Dean of Career Services at my school, who told me that firms are struggling hard to find qualified laterals, and that for whatever reason it's a big problem for them. This seems to fit with what was said above about firms reaching way down prestige-wise, but again I'm not really sure how it fits in to the overall discussion. Good for people graduating in the next 1-3 years I hope?

[TLSModBot]

Not sure exactly how this fits into the discussion (hoping someone can tell me how/if it does), but I just recently spoke with the Dean of Career Services at my school, who told me that firms are struggling hard to find qualified laterals, and that for whatever reason it's a big problem for them. This seems to fit with what was said above about firms reaching way down prestige-wise, but again I'm not really sure how it fits in to the overall discussion. Good for people graduating in the next 1-3 years I hope?

It probably means different things for different firms, but at the macro level:

1. There are fewer laterals because so many juniors were fired or not hired back when the great recession hit and hiring was slow.

2. Clients don't want to pay for first years (although to the extent that they get what they want is still in dispute - probably very small right now but growing). Also it's more efficient to have smaller teams of mid or seniors that know what they're doing.

3. It makes strategic sense: hire fewer first years and pick up laterals when business picks up. That way you don't take on unnecessary risk with too many juniors and either overpay or risk bad PR with firing a bunch.

All told, definitely NOT good for incoming graduates.

[Anonymous User]

Not sure exactly how this fits into the discussion (hoping someone can tell me how/if it does), but I just recently spoke with the Dean of Career Services at my school, who told me that firms are struggling hard to find qualified laterals, and that for whatever reason it's a big problem for them. This seems to fit with what was said above about firms reaching way down prestige-wise, but again I'm not really sure how it fits in to the overall discussion. Good for people graduating in the next 1-3 years I hope?

It probably means different things for different firms, but at the macro level:

1. There are fewer laterals because so many juniors were fired or not hired back when the great recession hit and hiring was slow.

2. Clients don't want to pay for first years (although to the extent that they get what they want is still in dispute - probably very small right now but growing). Also it's more efficient to have smaller teams of mid or seniors that know what they're doing.

3. It makes strategic sense: hire fewer first years and pick up laterals when business picks up. That way you don't take on unnecessary risk with too many juniors and either overpay or risk bad PR with firing a bunch.

All told, definitely NOT good for incoming graduates.

Yea I think those reasons were on point and are pretty much what the Dean had to say as well. Also, point well taken about that being bad in the sense that firms are more interested in laterals than new hires. I guess I was thinking that it could be good in the sense that even though they prefer laterals, there's still an overall scarcity in associates, and that scarcity won't disappear until enough of the newer large associate classes have been around for a while (which hopefully won't really start to happen for a couple years). Also, last year many of the firms reached lower into GPAs than they have in a very long time at my school, so I don't know if it's bottomed out already, but that definitely seems to be a positive. There was also more hiring overall but that's pretty obviously a good thing.

[kcdc1]

Firms having difficulty finding enough qualified attorneys to do the work is a good thing for qualified attorneys or people who will someday soon become qualified attorneys. This idea that firms are only looking for 3rd years, and that unmet demand for laterals is irrelevant to law students is silly. If I can't hire enough well-trained workers, I'll at least consider hiring more entry-level workers and training them.

[TLSModBot]

Firms having difficulty finding enough qualified attorneys to do the work is a good thing for qualified attorneys or people who will someday soon become qualified attorneys. This idea that firms are only looking for 3rd years, and that unmet demand for laterals is irrelevant to law students is silly. If I can't hire enough well-trained workers, I'll at least consider hiring more entry-level workers and training them.

Except your fundamental premise is flawed.

"I can't hire enough well-trained workers" isn't a true statement for BigLaw and hasn't been for a long time. Fully half of law graduates never even get to be lawyers, let alone working for BigLaw. I don't know what school previous Anon goes to but unless it's in the T10 range then that Dean is smoking something fantastic.

Best estimates put overall hiring at flat or just about flat. With strong indicators that it's going to be going down. And with profit margins decreasing, no, firms aren't going to "just hire and train up" people precisely because of my point 3 earlier.

[kcdc1]

You can question the assumption. But dude asked whether firms struggling to hire qualified laterals would be a positive indication for current law students. The answer is yes.

[TLSModBot]

You can question the assumption. But dude asked whether firms struggling to hire qualified laterals would be a positive indication for current law students. The answer is yes.

Except it isn't. Because of literally my previous 3 points.

There isn't a NET need for laterals, there is just swapping between firms which says nothing for hiring overall. Lateraling is a symptom of price pressure by clients and attempts by partners to inflate the profit margin by not risking new hires as much (and instead poaching from other firms who have theoretically already trained them and culled out the duds). So if anything, it's a bad sign.

Suggested reading on this front (seriously, it's interesting stuff):
"Growth is Dead" by Bruce McEwen
"The Failing Law Firm" By David Parnell

There are some other good things out there but I can't remember them at the moment. Adam Smith Esq is always a good read.

[kcdc1]

Just to be clear, your argument is that even if firms are having trouble hiring enough 3rd years, that has absolutely no relevance for 1st-year hiring. I respectfully disagree.

[DELG]

Just to be clear, your argument is that even if firms are having trouble hiring enough 3rd years, that has absolutely no relevance for 1st-year hiring. I respectfully disagree.

You're respectfully talking out of your ass

[Abbie Doobie]

Firms having difficulty finding enough qualified attorneys to do the work is a good thing for qualified attorneys or people who will someday soon become qualified attorneys. This idea that firms are only looking for 3rd years, and that unmet demand for laterals is irrelevant to law students is silly. If I can't hire enough well-trained workers, I'll at least consider hiring more entry-level workers and training them.

in addition to the reasons that others have already pointed out, this isn't true in practice because lateral hiring (or the hiring of experienced workers in any industry, not just law) is mostly driven by an immediate or near-term need for a specific skill set. you can't meet that need by hiring an entry level worker and developing the required skill set over the next few years.

[UVAIce]

Just to be clear, your argument is that even if firms are having trouble hiring enough 3rd years, that has absolutely no relevance for 1st-year hiring. I respectfully disagree.

In most other industries you would be right. If a software company could not find the person with 5 years experience they would take the person with 3 years experience and so on. But law firms really make one product: billable hours. And what matters most with billable hours is how much you can charge for an associate's work and what the associate's realization rate is. An associate with just three years experience is going to perform markedly better on those metrics. A new hire will cost you $30k to give them a trial run in the summer or they go after 3Ls and pay some law grad $160,000 a year plus benefits based on ~4 hours of interviewing and a transcript.

The other thing to remember is that the new normal in legal hiring leaves most practices groups pretty lean. This is good for profits per partner, until you lose your sole 5th or 6th year associate in particular practice group and office and your other associates at the same office have at most 3 years of experience between them. You cannot simply "hire" a law school grad to do that job. Clients won't pay for it and, to be honest, your 1st year associate is not going to be able to independently run smaller deals. The only real option is to go out and try to poach someone. And when you think about that you can see how this can snowball across the industry (e.g. my sole senior associate left to work in-house at this bank, so I'm going to take another firm's sole senior associate and so on and so forth).

What's really been happening is that people are getting rewarded for sticking around. If you can do the work, can handle the hours and get along with your partners you're unlikely to get fired or told to seek employment elsewhere in the near future. I cannot speak to the in-house hiring market, but I wouldn't doubt if it will have some effects there as well. Given the trajectory of the economy it's unlikely that legal hiring changes drastically in the near future.

[UVAIce]

And to post some anecdotal evidence that this is going on, I am fairly certain that my firm recently raised the back end of our associate pay scale, but kept the incoming associate salary the same.

[Desert Fox]

A major problem with just training more people is that most leave before you need them. You also don't know what you need. My firm shit canned mid-levels in one group and was hiring anyone with any experience in another.

[Anonymous User]

Firms having difficulty finding enough qualified attorneys to do the work is a good thing for qualified attorneys or people who will someday soon become qualified attorneys. This idea that firms are only looking for 3rd years, and that unmet demand for laterals is irrelevant to law students is silly. If I can't hire enough well-trained workers, I'll at least consider hiring more entry-level workers and training them.

Except your fundamental premise is flawed.

"I can't hire enough well-trained workers" isn't a true statement for BigLaw and hasn't been for a long time. Fully half of law graduates never even get to be lawyers, let alone working for BigLaw. I don't know what school previous Anon goes to but unless it's in the T10 range then that Dean is smoking something fantastic.

Best estimates put overall hiring at flat or just about flat. With strong indicators that it's going to be going down. And with profit margins decreasing, no, firms aren't going to "just hire and train up" people precisely because of my point 3 earlier.

CCN so I guess that experience isn't really universifiable.

[kcdc1]

I understand that a 1st-year is not a perfect substitute for the 3rd-year that Firm X actually wants to hire. Indeed, depending on the specific reason that Firm X wants to hire a third-year (i.e., brought in new major case, needs to add qualified personnel to staff that case immediately), the 1st-year may not be a substitute at all.

But the question is whether there is any tie whatsoever between demand for 3rd years and 1st-year hiring. And if even some of the demand for 3rd years is coming from firms who are looking to add staff to support long-term workflow, then 1st-year hires can be substituted for at least a small portion of that demand. Again, I'm not arguing that demand for 3rd-years is equivalent to demand for 1st-years. I'm arguing against the proposition that the two are entirely decoupled.

[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.

I hope more firms follow quinn's lead and ditch the summer program....granted I don't have much reason to care but it really annoys me that my firm, like many others, doesn't use it as a true 10-week interview at the end of which we no offer (or cold offer) the people who were truly difficult to work with or who appear to not get it to the point that they're going to be deadweight to the midlevels or seniors when they return. I'm sure if there was a down vote button I would get pummeled but I am not talking about no offering half the class, just the small number of people where it is immediately apparent that they will be problems from a work perspective...meanwhile forget about no offering because someone is weird or jumped into the hudson on the summer cruise. If your work is good, no one will care. Conversely the two worst juniors last year were both really social guys who everyone liked yet no one wants on their team.

Plus I mean if firms are struggling financially it makes sense to cut the summer program to save some cash if firms don't use it as intended anyway. Although I'm pretty shocked that partner incomes haven't risen above inflation during their entire careers...when my mom made partner in the mid 1990s junior partner comp was like 250k-300k. Fourth years are making nearly that much when including bonuses (ok not when you adjust for inflation but I'm sure my mom's junior partner salary adjusted for inflation is well within the associate comp scale). Meanwhile junior partners are far beyond that although I'm too lazy to calculate inflation and that is very anecdotal so don't mind me.

[Mr. Elshal]

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.

I hope more firms follow quinn's lead and ditch the summer program....granted I don't have much reason to care but it really annoys me that my firm, like many others, doesn't use it as a true 10-week interview at the end of which we no offer (or cold offer) the people who were truly difficult to work with or who appear to not get it to the point that they're going to be deadweight to the midlevels or seniors when they return. I'm sure if there was a down vote button I would get pummeled but I am not talking about no offering half the class, just the small number of people where it is immediately apparent that they will be problems from a work perspective...meanwhile forget about no offering because someone is weird or jumped into the hudson on the summer cruise. If your work is good, no one will care. Conversely the two worst juniors last year were both really social guys who everyone liked yet no one wants on their team.

Plus I mean if firms are struggling financially it makes sense to cut the summer program to save some cash if firms don't use it as intended anyway. Although I'm pretty shocked that partner incomes haven't risen above inflation during their entire careers...when my mom made partner in the mid 1990s junior partner comp was like 250k-300k. Fourth years are making nearly that much when including bonuses (ok not when you adjust for inflation but I'm sure my mom's junior partner salary adjusted for inflation is well within the associate comp scale). Meanwhile junior partners are far beyond that although I'm too lazy to calculate inflation and that is very anecdotal so don't mind me.

According to this calculator, assuming that 250-300k is 275k, and that mid-90s is 1995, the pay would be worth 427,688.16 today. I don't know the associate compensation numbers, but that seems really high to be considered well within the comp scale

http://data.bls.gov/cgi-bin/cpicalc.pl? ... year2=2015

[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.

I hope more firms follow quinn's lead and ditch the summer program....granted I don't have much reason to care but it really annoys me that my firm, like many others, doesn't use it as a true 10-week interview at the end of which we no offer (or cold offer) the people who were truly difficult to work with or who appear to not get it to the point that they're going to be deadweight to the midlevels or seniors when they return. I'm sure if there was a down vote button I would get pummeled but I am not talking about no offering half the class, just the small number of people where it is immediately apparent that they will be problems from a work perspective...meanwhile forget about no offering because someone is weird or jumped into the hudson on the summer cruise. If your work is good, no one will care. Conversely the two worst juniors last year were both really social guys who everyone liked yet no one wants on their team.

Plus I mean if firms are struggling financially it makes sense to cut the summer program to save some cash if firms don't use it as intended anyway. Although I'm pretty shocked that partner incomes haven't risen above inflation during their entire careers...when my mom made partner in the mid 1990s junior partner comp was like 250k-300k. Fourth years are making nearly that much when including bonuses (ok not when you adjust for inflation but I'm sure my mom's junior partner salary adjusted for inflation is well within the associate comp scale). Meanwhile junior partners are far beyond that although I'm too lazy to calculate inflation and that is very anecdotal so don't mind me.

And that's the beauty of laterals. A competitor, or a firm well beneath you so not a competitor, but who also is servicing clients and worried about the same things you are, has spent two years screening them and at least didn't auto-fire. As a lateral candidate, partners told me specifically that they wanted laterals rather than hiring more summers or 3Ls or clerks. I think most firms want to rely on the lateral market as much as they possibly can.

[Monochromatic Oeuvre]

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.

I hope more firms follow quinn's lead and ditch the summer program....granted I don't have much reason to care but it really annoys me that my firm, like many others, doesn't use it as a true 10-week interview at the end of which we no offer (or cold offer) the people who were truly difficult to work with or who appear to not get it to the point that they're going to be deadweight to the midlevels or seniors when they return. I'm sure if there was a down vote button I would get pummeled but I am not talking about no offering half the class, just the small number of people where it is immediately apparent that they will be problems from a work perspective...meanwhile forget about no offering because someone is weird or jumped into the hudson on the summer cruise. If your work is good, no one will care. Conversely the two worst juniors last year were both really social guys who everyone liked yet no one wants on their team.

Plus I mean if firms are struggling financially it makes sense to cut the summer program to save some cash if firms don't use it as intended anyway. Although I'm pretty shocked that partner incomes haven't risen above inflation during their entire careers...when my mom made partner in the mid 1990s junior partner comp was like 250k-300k. Fourth years are making nearly that much when including bonuses (ok not when you adjust for inflation but I'm sure my mom's junior partner salary adjusted for inflation is well within the associate comp scale). Meanwhile junior partners are far beyond that although I'm too lazy to calculate inflation and that is very anecdotal so don't mind me.

I've had this argument with seemingly the entire board, so I won't rehash, but I would still advise any 2L to avoid any firm who regularly offered below 97ish% of summers and still think it's bullshit when that happens. The issue, of course, is that it really isn't a ten week job interview, because other job interviews don't preclude you from being hired at other places if they don't take you on. I'm more okay with no-offering for some serious violation of decorum (although not for just general weirdness) than I am for work product concerns. I don't think you know anything about some work product issue from ten weeks of someone who has never seen a legal document or maybe never actually held a job. Firms used to be (and really, still should be) committed to training associates for at least a few years, so they can reap ridiculous margins when those associates are midlevels.

Summer programs are definitely an outdated relic, but as Quinn is going to find out, there's a giant first mover disadvantage to ditching the summer program. It would be better if firms really did redirect that money to signing bonuses or some other form of equivalent compensation, but somehow I'm not confident that money would make its way back to the associates.

[DELG]

I question how much of a first mover problem there really is. Firms hire too many people planning for many to leave, and then they do, and then Quinn can hire them. They're also more jaded hires who know better what they're getting into. If this is about there being insufficient grinder/strivers out there willing to trade up, I would say there are plenty, so there is no problem there. If it's about only wanting T14 grinder/strivers with a 3.6+ GPA, there's a question of how important those priorities are.

[Monochromatic Oeuvre]

I question how much of a first mover problem there really is. Firms hire too many people planning for many to leave, and then they do, and then Quinn can hire them. They're also more jaded hires who know better what they're getting into. If this is about there being insufficient grinder/strivers out there willing to trade up, I would say there are plenty, so there is no problem there. If it's about only wanting T14 grinder/strivers with a 3.6+ GPA, there's a question of how important those priorities are.

Yeah, that's the thing. I'm sure they could come up 60 people per year who will trade up after their SA or ditch the old firm after a clerkship, but I don't know if they can find 60 people within their already-very-tight hiring criteria. If they start taking median, then sure, it's probably doable.

Why any lateral--someone who presumably already thinks Biglaw sucks--would actively attempt to go to a firm who almost certainly has worse billable targets than the one they left is a mystery to me, but I don't think they've having a huge issue there.

[DELG]

I question how much of a first mover problem there really is. Firms hire too many people planning for many to leave, and then they do, and then Quinn can hire them. They're also more jaded hires who know better what they're getting into. If this is about there being insufficient grinder/strivers out there willing to trade up, I would say there are plenty, so there is no problem there. If it's about only wanting T14 grinder/strivers with a 3.6+ GPA, there's a question of how important those priorities are.

Yeah, that's the thing. I'm sure they could come up 60 people per year who will trade up after their SA or ditch the old firm after a clerkship, but I don't know if they can find 60 people within their already-very-tight hiring criteria. If they start taking median, then sure, it's probably doable.

Why any lateral--someone who presumably already thinks Biglaw sucks--would actively attempt to go to a firm who almost certainly has worse billable targets than the one they left is a mystery to me, but I don't think they've having a huge issue there.

The people who know what they're getting into and want it anyway are QE's best possible hires.

[Desert Fox]

I question how much of a first mover problem there really is. Firms hire too many people planning for many to leave, and then they do, and then Quinn can hire them. They're also more jaded hires who know better what they're getting into. If this is about there being insufficient grinder/strivers out there willing to trade up, I would say there are plenty, so there is no problem there. If it's about only wanting T14 grinder/strivers with a 3.6+ GPA, there's a question of how important those priorities are.

Yeah, that's the thing. I'm sure they could come up 60 people per year who will trade up after their SA or ditch the old firm after a clerkship, but I don't know if they can find 60 people within their already-very-tight hiring criteria. If they start taking median, then sure, it's probably doable.

Why any lateral--someone who presumably already thinks Biglaw sucks--would actively attempt to go to a firm who almost certainly has worse billable targets than the one they left is a mystery to me, but I don't think they've having a huge issue there.

They don't really have a super tight hiring criteria and they certainly don't need one. You'll get plenty of idiots from V50 firms trading up because they can.

Clerkship hiring isn't that hot either. It's ripe for someone to just come in and sweep up a bunch of them.

From what I understand, Quinn already relies fairly heavily on laterals as it is because of attrition. Quinn probably just realized that the recruiting to midlevel source path was much more inefficient.

Plus the lateral market for lit (all quinn does) is shit for juniors. They could easily clean up.

[Johann]

i disagree the hot lateral market isnt good for juniors. were hiring an entry level junior to replace the 3rd year that left. this happens plenty in groups. its why 3L hiring has been a thing recently.

However, just because the legal economy is hot right now (compared to the legal market since 2008), law is still heading in the wrong direction of needing less and less people. So yes things are the best they've ever been right at this moment since 2007. But how did people do who applied to law school in 2006/7 during the peak times fare when they did OCI in 2008/2009 and graduated in 2010/2011?

There's just no reason for someone who is smart and capable to risk hoping the legal economy is still hot in 2-3 years.

[Anonymous User]

i disagree the hot lateral market isnt good for juniors. were hiring an entry level junior to replace the 3rd year that left. this happens plenty in groups. its why 3L hiring has been a thing recently.

However, just because the legal economy is hot right now (compared to the legal market since 2008), law is still heading in the wrong direction of needing less and less people. So yes things are the best they've ever been right at this moment since 2007. But how did people do who applied to law school in 2006/7 during the peak times fare when they did OCI in 2008/2009 and graduated in 2010/2011?

There's just no reason for someone who is smart and capable to risk hoping the legal economy is still hot in 2-3 years.

So is this move to $190k happening or nah?