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For junior associates not applying as SA, would "applying as an associate" be enough or should it be more specific, like "I have x experience and have an interest in this area as x litigator"? Truthfully, I do not know what area of law I would thrive in but judging by my experience, it's usually litigation in a particular field.

I think this is really dependent on the firm(s) you are targeting and your particular experience. When I massmailed, I tailored my heavy corporate experience to whatever that firm did best, and targeted transactional practice areas. When the firm seemed to be heavy on lit, I focused on my IP experience and the IP lit assignments I had taken. Caveat here is that I had been with the same firm (both during summers and the school year) since 1L summer, and most of my experience was in startup/VC stuff. If I had done different practice areas during 1L and 2L summers I may have taken a different approach.

If you're applying to larger firms with both corporate and litigation practices (and its not in response to a specific Ad for a particular position), I don't think it makes sense to highlight or be specific about your preference in practice area. I'd be generic about it and highlight your interest in the firm and your prior experience. Let them draw their own conclusions. I think you'd probably hate to have a cover letter expressing your interest in corporate law sitting on the desk of an HR manager looking to hire 2 litigation associates...

If you're going to tailor, be sure to know what you're applying for. if you can't figure it out, be generic.

Among my fav OCI stories are getting dinged from a firm looking for a lit associate because during my CB interviews I couldn't figure out that despite 4/6 of my interviews being with litigators and the litigator group chair/partner I shouldn't have talked about my interests in doing every area but litigation when asked "where do you see yourself".