AM LAW: SUMMER ASSOCIATE HIRING DOWN 44 PERCENT OVER 2009 Forum

[Sell Manilla]

It just occurred to me that I forgot "pre" as in "...ever returns to pre-ITE levels" in my post. Edited. Whoops.

[98234872348]

For the record, I have seen a metric fuckton of data, and I firmly believe there will be more Class of 2012 (Summer of '11, recruiting of '10 - god this system can be hard to keep track of) offers than there were for the Class of 2011 (Summer of '10, recruiting of '09). Everyone was a little shocked to see current OCI numbers, but the actual # of interviews and # of firms hiring is up most places I look. This year will be hard as compared to the boom, but I'd bet every dollar I have it's better than last year.

I really hope you are right.

But it won't be of any assistance to you when the economy crashes again in 2011...

[testmachine45]

I think this is an overall good phenomenon cause it means more people will be forced into public interest or plantiff's work and that will have a net benefit to our society(I believe).

I'm assuming sarcasm?

Not sarcasm!

[Anonymous User]

Not flame! Plantiff's and public interest is important.

[testmachine45]

Look the point is that there are 3600 positions out there for jobs that start at 160k! that's a piece of cake for any of us to get!

[miamiman]

Look the point is that there are 3600 positions out there for jobs that start at 160k! that's a piece of cake for any of us to get!

you killed your own flame.

[testmachine45]

I was being serious.

[sumus romani]

Look the point is that there are 3600 positions out there for jobs that start at 160k! that's a piece of cake for any of us to get!

I understand that you are just being sarcastic, but it is even worse than you joke. Not all of these jobs start at 160K (e.g. several are at around $110,000). And the drop-off after that can only be described as a cliff.

What we have are 45,000 law schools grads per year. 30,000 new jobs per year (that number is actually pre-ITE), of which 3,600 or 8.3% pay over $110,000.

[shortporch]

I think a lot of you have some serious misunderstandings of the situation here. This is all a fairly subjective take, I suppose, but as one who practiced in a Vault 100 for some time before transitioning out, I might be able to offer some insight.

First, it's devastatingly naive to parse out the number as something like the "top 60% at a T20" getting an offer. Think of it more as 5% or so of all law students. Then subtract out large sections for the most elite schools on down the line. And realize that summer associate positions may include 1Ls (rarely, but very possible at smaller firms) and may include splitters (again, rarer these days than in the ol' days). And realize that even with good offer rates of 90%, that's 300 or so who're left out after their summer gig. And realize that the AmLaw 200 list includes law firms of fewer than 200 attorneys who don't pay $100,000, much less $160,000.

Now, maybe that's all well and good for you, because you figure you'll be in the top X% of Y school which is ranked Z and obviously must get you a job in an AmLaw 200 firm, and whatever salary they pay you will be just fine because it'll be better than the salary would've had at A with your B degree. There's really nothing I can do to try to talk you out of that way of approaching the world.

But additionally troubling is the perpetual optimism (or perhaps bare hope) that things will get back to where they were before this recession. I think people don't understand the shifts that have taken place. People here are treating lawyers-at-big-law-firms as a kind of fungible "employee" that should go up and down with unemployment, and as soon as unemployment numbers drop, then there will be more lawyers-at-big-law-firm positions. But sometimes, some jobs, like we've seen with, say, automotive manufacturing or telephone customer service, will simply never come back.

From around 1990 to 2008, there were a number of incredible boom times for lawyers, peppered with some occasional corrections in the legal marketplace. There were a number of Internet companies that started up, sought venture capital, engaged in mergers and buyouts, and filed for IPOs. There were real estate booms and development in a number of regions. And with the boom of the Internet, discovery costs in litigation increased significantly, as e-mail and electronic paper trails gave significantly more work to litigators.

But there have been a number of dramatic changes in the last several years. After Sarbanes-Oxley, the number of companies filing for IPOs has dropped dramatically and may never return. With the stabilization of the Internet, and the lessons learned from the dot-bust, there are fewer pure start-up opportunities and more in-house development, and that kind of innovation may never return (in terms of legal jobs; I'm not saying Apple, Google, Microsoft, etc. aren't still developing). Mergers and acquisitions have fallen in the down economy because there simply isn't the capital to do them, and there's increasing skepticism from the SEC about these kinds of blockbuster deals. The bursting of the real estate bubble and ensuing legislation have dramatically limited access to credit and real estate development opportunities, which may never return. (While much of the content of the financial reform bill is largely undetermined at the moment, it will, in all likelihood, make such opportunities still scarcer.) Firms have found ways to streamline electronic discovery, or at the very least outsource it. Litigators' bread and butter was often discovery in the down times; now that you can scan all the documents and store them remotely, someone, literally anywhere in the world, can do it.

And this outsourcing has led to other related issues. Let's set aside the very real issue. Gargantuan firms began to experience break-outs as partners (who, perhaps, didn't like their shares, or feared getting ousted when they turned a certain age) trekked out on their own with a client book. And they could undercut the gargantuan firms and offer the same services. While this is nothing new, lower costs were a significant motivating interest for many companies over the last few years looking for legal services. Companies would look to smaller firms to handle issues more efficiently. You may have read much about the "death of the billable hour"; and while reports of its death are greatly exaggerated, it certainly has led to a number of alternative or fixed-fee arrangements at firms, even the biggest firms, to drop the prices for clients.

So we have two important phenomena. We have a number of legal areas that were extremely hot for a period that have cooled substantially and may never return, or at least certainly won't return in the next decade with anything near their former glory; and a number of movements of firms to lower-priced alternatives of the big law firms.

Are there legal jobs out there? Of course. But I think (and here I get a bit subjective) the opportunities are shifting toward these smaller, dispersed centers that can afford to do legal work at a lower rate (because they're not concerned about, say, premium Manhattan office space or keeping their PPP above $1MM), and away from these former hot areas. If you want to do litigation, I think the road is going to be very difficult ahead as discovery is scaled back and outsourced. If you want to do transactional or corporate work, you will live and die by what happens in the regulatory world in Washington.

Finally, firms have learned that they can get away with a lot. They've moved an increasing number of attorneys to the contract attorney system. After all, it was something of a tease to bring in 100 associates each September and acknowledge that only 1 would be left standing in a decade to make share partner. So why not trim that associate class, then bring in the bottom quarter of it at a reduced-price, reduced-benefit scale and let them do a lot of the grunt work?

So this is an exceedingly downer of a post. But it's meant to be so to quash some of the rampant optimism. If you get a JD, you can definitely hit the streets and have a long and prosperous career. But if you think that you're going to waltz into a 500-attorney office and get $160,000 to start, and that if you just wait long enough those booming glory days for everyone are coming just around the corner, I think you'd be sadly mistaken.

[Always Credited]

I think a lot of you have some serious misunderstandings of the situation here. This is all a fairly subjective take, I suppose, but as one who practiced in a Vault 100 for some time before transitioning out, I might be able to offer some insight.

First, it's devastatingly naive to parse out the number as something like the "top 60% at a T20" getting an offer. Think of it more as 5% or so of all law students. Then subtract out large sections for the most elite schools on down the line. And realize that summer associate positions may include 1Ls (rarely, but very possible at smaller firms) and may include splitters (again, rarer these days than in the ol' days). And realize that even with good offer rates of 90%, that's 300 or so who're left out after their summer gig. And realize that the AmLaw 200 list includes law firms of fewer than 200 attorneys who don't pay $100,000, much less $160,000.

Now, maybe that's all well and good for you, because you figure you'll be in the top X% of Y school which is ranked Z and obviously must get you a job in an AmLaw 200 firm, and whatever salary they pay you will be just fine because it'll be better than the salary would've had at A with your B degree. There's really nothing I can do to try to talk you out of that way of approaching the world.

But additionally troubling is the perpetual optimism (or perhaps bare hope) that things will get back to where they were before this recession. I think people don't understand the shifts that have taken place. People here are treating lawyers-at-big-law-firms as a kind of fungible "employee" that should go up and down with unemployment, and as soon as unemployment numbers drop, then there will be more lawyers-at-big-law-firm positions. But sometimes, some jobs, like we've seen with, say, automotive manufacturing or telephone customer service, will simply never come back.

From around 1990 to 2008, there were a number of incredible boom times for lawyers, peppered with some occasional corrections in the legal marketplace. There were a number of Internet companies that started up, sought venture capital, engaged in mergers and buyouts, and filed for IPOs. There were real estate booms and development in a number of regions. And with the boom of the Internet, discovery costs in litigation increased significantly, as e-mail and electronic paper trails gave significantly more work to litigators.

But there have been a number of dramatic changes in the last several years. After Sarbanes-Oxley, the number of companies filing for IPOs has dropped dramatically and may never return. With the stabilization of the Internet, and the lessons learned from the dot-bust, there are fewer pure start-up opportunities and more in-house development, and that kind of innovation may never return (in terms of legal jobs; I'm not saying Apple, Google, Microsoft, etc. aren't still developing). Mergers and acquisitions have fallen in the down economy because there simply isn't the capital to do them, and there's increasing skepticism from the SEC about these kinds of blockbuster deals. The bursting of the real estate bubble and ensuing legislation have dramatically limited access to credit and real estate development opportunities, which may never return. (While much of the content of the financial reform bill is largely undetermined at the moment, it will, in all likelihood, make such opportunities still scarcer.) Firms have found ways to streamline electronic discovery, or at the very least outsource it. Litigators' bread and butter was often discovery in the down times; now that you can scan all the documents and store them remotely, someone, literally anywhere in the world, can do it.

And this outsourcing has led to other related issues. Let's set aside the very real issue. Gargantuan firms began to experience break-outs as partners (who, perhaps, didn't like their shares, or feared getting ousted when they turned a certain age) trekked out on their own with a client book. And they could undercut the gargantuan firms and offer the same services. While this is nothing new, lower costs were a significant motivating interest for many companies over the last few years looking for legal services. Companies would look to smaller firms to handle issues more efficiently. You may have read much about the "death of the billable hour"; and while reports of its death are greatly exaggerated, it certainly has led to a number of alternative or fixed-fee arrangements at firms, even the biggest firms, to drop the prices for clients.

So we have two important phenomena. We have a number of legal areas that were extremely hot for a period that have cooled substantially and may never return, or at least certainly won't return in the next decade with anything near their former glory; and a number of movements of firms to lower-priced alternatives of the big law firms.

Are there legal jobs out there? Of course. But I think (and here I get a bit subjective) the opportunities are shifting toward these smaller, dispersed centers that can afford to do legal work at a lower rate (because they're not concerned about, say, premium Manhattan office space or keeping their PPP above $1MM), and away from these former hot areas. If you want to do litigation, I think the road is going to be very difficult ahead as discovery is scaled back and outsourced. If you want to do transactional or corporate work, you will live and die by what happens in the regulatory world in Washington.

Finally, firms have learned that they can get away with a lot. They've moved an increasing number of attorneys to the contract attorney system. After all, it was something of a tease to bring in 100 associates each September and acknowledge that only 1 would be left standing in a decade to make share partner. So why not trim that associate class, then bring in the bottom quarter of it at a reduced-price, reduced-benefit scale and let them do a lot of the grunt work?

So this is an exceedingly downer of a post. But it's meant to be so to quash some of the rampant optimism. If you get a JD, you can definitely hit the streets and have a long and prosperous career. But if you think that you're going to waltz into a 500-attorney office and get $160,000 to start, and that if you just wait long enough those booming glory days for everyone are coming just around the corner, I think you'd be sadly mistaken.

If JDU was you, I'd read JDU.

[Sell Manilla]

Wow, shortporch, thanks.

[JohnBoy]

So this is an exceedingly downer of a post. But it's meant to be so to quash some of the rampant optimism. If you get a JD, you can definitely hit the streets and have a long and prosperous career. But if you think that you're going to waltz into a 500-attorney office and get $160,000 to start, and that if you just wait long enough those booming glory days for everyone are coming just around the corner, I think you'd be sadly mistaken.

Well, thanks for "quashing" some of our optimism and dreams..it's good to have people like you in the world.

But on a side note, if you were anything of an economist you would know markets run in cycles. So for you to say things will NEVER return to previous levels is bold and outlandish. Sure the certain areas you mentioned may not return to their former glory days, but who are you to say other sectors won't see an increase to make up for that disparity? As the economy evolves and new sectors arise, litigation and work for lawyers will shift accordingly. You sound like a 90 year old man on his death bed with nothing but regrets and ZERO capability for adaptation.

[KibblesAndVick]

So this is an exceedingly downer of a post. But it's meant to be so to quash some of the rampant optimism. If you get a JD, you can definitely hit the streets and have a long and prosperous career. But if you think that you're going to waltz into a 500-attorney office and get $160,000 to start, and that if you just wait long enough those booming glory days for everyone are coming just around the corner, I think you'd be sadly mistaken.

Well, thanks for "quashing" some of our optimism and dreams..it's good to have people like you in the world.

But on a side note, if you were anything of an economist you would know markets run in cycles. So for you to say things will NEVER return to previous levels is bold and outlandish. Sure the certain areas you mentioned may not return to their former glory days, but who are you to say other sectors won't see an increase to make up for that disparity? As the economy evolves and new sectors arise, litigation and work for lawyers will shift accordingly. You sound like a 90 year old man on his death bed with nothing but regrets and ZERO capability for adaptation.

Your point is valid but doesn't take into account the time frame for these types of changes. We're talking decades not years.

[Danneskjöld]

So this is an exceedingly downer of a post. But it's meant to be so to quash some of the rampant optimism. If you get a JD, you can definitely hit the streets and have a long and prosperous career. But if you think that you're going to waltz into a 500-attorney office and get $160,000 to start, and that if you just wait long enough those booming glory days for everyone are coming just around the corner, I think you'd be sadly mistaken.

Well, thanks for "quashing" some of our optimism and dreams..it's good to have people like you in the world.

But on a side note, if you were anything of an economist you would know markets run in cycles. So for you to say things will NEVER return to previous levels is bold and outlandish. Sure the certain areas you mentioned may not return to their former glory days, but who are you to say other sectors won't see an increase to make up for that disparity? As the economy evolves and new sectors arise, litigation and work for lawyers will shift accordingly. You sound like a 90 year old man on his death bed with nothing but regrets and ZERO capability for adaptation.

To shortporch: that was probably the best post I've ever read on TLS, it should be stickied.

To JohnBoy: I hope you're kidding or flame, otherwise this is the most naive post I've ever read on TLS--I can't bring myself to believe that anyone's blind optimism could fail in the face of such a reasoned analysis... I can't.

[270910]

Jeeze shortporch, that was very well thought out and written. You should consider getting a job teaching or writing or something.

(As a brief counter, I'd say that the things that make markets contract tend to be obvious in the present, while the things that make them expand tend to be subtle. Everything you listed that has gotten more scarce in terms of attorney work is surely accurate, but we can't predict what might come along to increase the work load. As an example, both wall street reform and health insurance reform have created massive bureaucracies that will employee hundreds of people in regulatory agencies, regulatory law firms, and lobbying companies - not to mention the inevitable litigation to pin down the gray areas of the new law. I'm not saying NY TO 190 (though I am thinking it) - I just think your post might focus too much on that which is turning down and too little on that which is opening up).

[lawschoollll]

So this is an exceedingly downer of a post. But it's meant to be so to quash some of the rampant optimism. If you get a JD, you can definitely hit the streets and have a long and prosperous career. But if you think that you're going to waltz into a 500-attorney office and get $160,000 to start, and that if you just wait long enough those booming glory days for everyone are coming just around the corner, I think you'd be sadly mistaken.

Well, thanks for "quashing" some of our optimism and dreams..it's good to have people like you in the world.

But on a side note, if you were anything of an economist you would know markets run in cycles. So for you to say things will NEVER return to previous levels is bold and outlandish. Sure the certain areas you mentioned may not return to their former glory days, but who are you to say other sectors won't see an increase to make up for that disparity? As the economy evolves and new sectors arise, litigation and work for lawyers will shift accordingly. You sound like a 90 year old man on his death bed with nothing but regrets and ZERO capability for adaptation.

Good lord dude. Seriously?

[JohnBoy]

Your point is valid but doesn't take into account the time frame for these types of changes. We're talking decades not years.

The speculation you refer to is handed down by the same people who thought property value would never stop increasing. This understanding is a major part of why we are in the predicament we are in today. Their views were wrong then, who is to say they aren't wrong now? Think about how quick the dot-com bubble came. Technology increases exponentially, who knows what is on the horizon.

A reason economists dedicate their lives to the study of cycles is to assuage the effects of bubble bursts and downturn. That's what everyone is scrambling to do as we speak. Maybe their efforts will pay off and things will get better. Maybe their efforts will prove negligible, or even exacerbate the problems. Granted, if you're doing this for money then you could very well be disappointed. But, that has been known for decades. If your going to pursue law with a passion there is no doubt in my mind you will find wealth, regardless of how you personally define it.

[sundevil77]

Shortporch, thanks for the detailed analysis.

Disco, I agree with you that the post focuses more on what is shutting down than on things that might open up in the future. In hindsight, it's always easy to spot market developments that spark economic growth. In the present, it is much harder to have a handle on such things.

I do have a point of disagreement with you, though. You point to new regulation as a potential source for legal jobs in the future. No doubt there will be such jobs. However, traditionally the free market has been the source of new jobs and greater growth than anything from the government. So while new jobs may come, I'm not sure they will be as plentiful as with a market driven recovery.

[270910]

Shortporch, thanks for the detailed analysis

Disco, I agree with you that the post focuses more on what is shutting down than on things that might open up in the future. In hindsight, it's always easy to spot market developments that spark economic growth. In the present, it is much harder to have a handle on such things.

I do have a point of disagreement with you, though. You point to new regulation as a potential source for legal jobs in the future. No doubt there will be such jobs. However, traditionally the free market has been the source of new jobs and greater growth than anything from the government. So while new jobs may come, I'm not sure they will be as plentiful as with a market driven recovery.

okie dokie. Tell that to all of the enormous ERISA, anti-trust, bankruptcy, and Tax practices out there ^.^

My point is that the legal sector has always been famously counter-cyclical, because even in down turns there's a large amount of legal work to be done. It's entirely possible that conditions which don't favor job growth / the invisible hand of the free market lovingly petting its disciples can still favor NY TO 190.

[JohnBoy]

Shortporch, thanks for the detailed analysis.

Disco, I agree with you that the post focuses more on what is shutting down than on things that might open up in the future. In hindsight, it's always easy to spot market developments that spark economic growth. In the present, it is much harder to have a handle on such things.

I do have a point of disagreement with you, though. You point to new regulation as a potential source for legal jobs in the future. No doubt there will be such jobs. However, traditionally the free market has been the source of new jobs and greater growth than anything from the government. So while new jobs may come, I'm not sure they will be as plentiful as with a market driven recovery.

Well, traditionally doesn't apply here...does it? The free market is a reason why we are in this predicament. Individual greed-->poor thinking--->poor loan decision--->credit sawps. Oversight would have been nice.

[JohnBoy]

To JohnBoy: I hope you're kidding or flame, otherwise this is the most naive post I've ever read on TLS--I can't bring myself to believe that anyone's blind optimism could fail in the face of such a reasoned analysis... I can't.

You sir, can spend your life a victim of circumstances and cry all the way to your death bed.

It is the work of individuals that leads to progress, no one has ever done anything meaningful in their lives without optimism. I guarantee you I can come up with more examples of innovation and enhancement based on individuals with optimism who faced opposition from the "reasoned analysis" of their time. Want to try?

[sundevil77]

Shortporch, thanks for the detailed analysis

Disco, I agree with you that the post focuses more on what is shutting down than on things that might open up in the future. In hindsight, it's always easy to spot market developments that spark economic growth. In the present, it is much harder to have a handle on such things.

I do have a point of disagreement with you, though. You point to new regulation as a potential source for legal jobs in the future. No doubt there will be such jobs. However, traditionally the free market has been the source of new jobs and greater growth than anything from the government. So while new jobs may come, I'm not sure they will be as plentiful as with a market driven recovery.

okie dokie. Tell that to all of the enormous ERISA, anti-trust, bankruptcy, and Tax practices out there ^.^

My point is that the legal sector has always been famously counter-cyclical, because even in down turns there's a large amount of legal work to be done. It's entirely possible that conditions which don't favor job growth / the invisible hand of the free market lovingly petting its disciples can still favor NY TO 190.

Oh, my point wasn't to entirely disagree with you. Like you said, I know bankruptcy lawyers that are doing very well right now. However, as shortportch mentions, it's easy to fathom that real estate law, mergers/acquisitions, etc. will continue to struggle mightily.

Do you think we'll see an even heavier concentration/demand for lawyers in NYC (financial regulation) and DC (lobbying, other governmental regulation) markets?

Unfortunately, I think markets like mine (Phoenix, Las Vegas), which are heavily dependent on real estate development, will be down for quite some time.

[OperaAttorney]

"Obviously we were in the midst of one of the greatest economic downturns in recent history last year," says Steven Sletten, chair of Gibson, Dunn's firmwide hiring committee, commenting on the decrease. "We had to make adjustments on the margin and thought it was prudent to reduce the size of the summer program somewhat." He says he does not expect the size of next year's program to be dramatically different from this year's. Latham did not return calls for comment.

Gibson was one of the largest though. The Gibsons of the world aren't the firms that we're all hoping to see increases - its more the Cravaths and Morgan Lewises (cut by 80%/100%) that we're hoping to see really pick up hiring.

We are?? Speak for yourself

[Anonymous User]

Shortporch makes many excellent and valid points. I would temper his downer however with the observation (made by others) that the economy is indeed cyclical. The Great Depression did end. When military bases were closed there was a loss of jobs, but the bases were "repurposed" and many new uses, industries and jobs replaced the former.

Green Enrgy and industries are just beginning and will likely form the basis of the next boom (akin to the dot com boom) albeit hopefully without the excess (basketball courts in the back of the office, absurd stock IPOs and profits, etc). There will be regulation, IPOs and M&A. There will be litigation. There will be employment issues-and above all - lots of need for lawyers. But the paradigm has shifted. Firms won't overstaff like they did and will be run more like businesses. Clients wont pay like they did unless profits return to boomtimes (not likely in the near future I fear).

So be patient- go clerk- work for the government- do Public Interest- save the world. Be nimble, adventurous. Think outside the box. There' are going to be lots of opportunities, maybe just not the traditional ones.

Good business people have always made more than most lawyers. It's because they are risk takers and entrepreneurs. Open your eyes. Broaden your horizons. Be all you can be... Stop groveling for the holy grail Big Law jobs. Satisfaction can come in many forms.

OK- end of the anti downer speech. Enjoy.

[JohnBoy]

Shortporch makes many excellent and valid points. I would temper his downer however with the observation (made by others) that the economy is indeed cyclical. The Great Depression did end. When military bases were closed there was a loss of jobs, but the bases were "repurposed" and many new uses, industries and jobs replaced the former.

Green Enrgy and industries are just beginning and will likely form the basis of the next boom (akin to the dot com boom) albeit hopefully without the excess (basketball courts in the back of the office, absurd stock IPOs and profits, etc). There will be regulation, IPOs and M&A. There will be litigation. There will be employment issues-and above all - lots of need for lawyers. But the paradigm has shifted. Firms won't overstaff like they did and will be run more like businesses. Clients wont pay like they did unless profits return to boomtimes (not likely in the near future I fear).

So be patient- go clerk- work for the government- do Public Interest- save the world. Be nimble, adventurous. Think outside the box. There' are going to be lots of opportunities, maybe just not the traditional ones.

Good business people have always made more than most lawyers. It's because they are risk takers and entrepreneurs. Open your eyes. Broaden your horizons. Be all you can be... Stop groveling for the holy grail Big Law jobs. Satisfaction can come in many forms.

OK- end of the anti downer speech. Enjoy.

So teh apocalypse might not happen.......yet??!? Oh thx gawd.