I know it's impossible to say, but what do we think the potential impact of the recession is on class of '23 graduates? Forum

[Monochromatic Oeuvre]

Obviously it sucked at the time for a variety of classes, but also like co 2007-2010 that were able to find a job would have started investing in the market at its (recent history) lowest and were in a great position to buy houses around like 2012 or so when they were much much cheaper than today in many major markets

There were a few pros of this, albeit qualified, if in the classes of '07-'11 you avoided a strikeout, a no-offer, or a layoff (which wound up being a pretty small proportion):

1. I don't know that anyone was investing money/buying real estate in 2009; most people who were around then that I've talked to were saving whatever money they could because you never knew if layoffs were coming from you and severance/notice varied wildly by firm. But if you had the money and felt secure buying in 2010-2012, then yes, those people cleaned up.

2. The dearth of associates in c/o '08-'11 created a big midlevel shortage by 2014, which prompted the DPW bonus scale that still exists today. But of course, that was after years of bonus stagnation (when law schools, of course, did no such thing with their tuition). 2013 was probably the worst value proposition Biglaw has ever been and sentiment on here from non-idiots about going to anything but a T14 with a scholarship (or maybe even narrower) was equally negative. Compare 6th year comp of $290k vs. $503k last year.

3. That same dearth led to better partnership prospects for those associates over the last six years than they would have otherwise faced with full classes, but of course that's been countered by the overall trend of ladder-pulling that occured.

So in summation, yes, a potentially big win for a small group of people, but compared to many other ways that you were completely fucked. A reflection of the broader economy as a whole over the last 15 years too.

[chruck]

Not a litigator so not positive, but wasn’t the Great Recession also around the time that legal tech took off, especially eDiscovery and doc review automation?

It seemed like that was a contributing factor for lowering summer class sizes.

[Bosque]

Not a litigator so not positive, but wasn’t the Great Recession also around the time that legal tech took off, especially eDiscovery and doc review automation?

It seemed like that was a contributing factor for lowering summer class sizes.

I think you have the causation flipped there.

[Monochromatic Oeuvre]

Not a litigator so not positive, but wasn’t the Great Recession also around the time that legal tech took off, especially eDiscovery and doc review automation?

It seemed like that was a contributing factor for lowering summer class sizes.

I think you have the causation flipped there.

+1. Although automation was trickling in throughout the mid-2000s it really kicked into high gear in 2010ish and the subsequent few years. The Great Recession caused pretty much everybody to review their legal costs and many of them wound up absolutely refusing to pay for first years during those years (some went further than that). At many large firms doc review was largely what an incoming associate might be expected to do for 12, 18, 24 months. The Skaddens and Lathams of the world used to hire them in bunches for exactly that purpose and, although I admit I know nothing about the numbers of this last summer class, some of those firms, as of last year, had still never hired more summers than they did in 2007. Automation took a chunk of it; the rest went to the massively increased numbers of contract attorneys/temps that firms began using, both on the supply side (as many firms/clients moved to use them to save money) and the demand side (the hordes of unemployed lawyers). Those stories were told in horrifyingly scintillating color on these forums, and if they are to be believed, the doc review circuit at that time paid peanuts and was an absolute nightmare.

[Anonymous User]

I don't mean to get into a slapfest, but for those vulnerable law students and clerks reading this thread and feeling like your heart is going to explode, keep in mind that if any of these people could predict the labor market with absolute precision, they wouldn't be lawyers. Not every person on this thread, but at least some, were burned by the Great Recession and their misery loves company. The legal hiring market will either fall apart or it won't, as if the case for literally every other day of every other year of our profession's history. All you can do is hope for the best.

[Anonymous User]

Not a litigator so not positive, but wasn’t the Great Recession also around the time that legal tech took off, especially eDiscovery and doc review automation?

It seemed like that was a contributing factor for lowering summer class sizes.

I think you have the causation flipped there.

+1. Although automation was trickling in throughout the mid-2000s it really kicked into high gear in 2010ish and the subsequent few years. The Great Recession caused pretty much everybody to review their legal costs and many of them wound up absolutely refusing to pay for first years during those years (some went further than that). At many large firms doc review was largely what an incoming associate might be expected to do for 12, 18, 24 months. The Skaddens and Lathams of the world used to hire them in bunches for exactly that purpose and, although I admit I know nothing about the numbers of this last summer class, some of those firms, as of last year, had still never hired more summers than they did in 2007. Automation took a chunk of it; the rest went to the massively increased numbers of contract attorneys/temps that firms began using, both on the supply side (as many firms/clients moved to use them to save money) and the demand side (the hordes of unemployed lawyers). Those stories were told in horrifyingly scintillating color on these forums, and if they are to be believed, the doc review circuit at that time paid peanuts and was an absolute nightmare.

Any tech trickling down now that a recession could kick into high gear?

Seems like some firms (e.g., Big 4) have gotten more aggressive in offering legal adjacent services at a discount that could affect the legal market. For example, contract review automation for LIBOR agreements and compliance consulting.

[Monochromatic Oeuvre]

+1. Although automation was trickling in throughout the mid-2000s it really kicked into high gear in 2010ish and the subsequent few years. The Great Recession caused pretty much everybody to review their legal costs and many of them wound up absolutely refusing to pay for first years during those years (some went further than that). At many large firms doc review was largely what an incoming associate might be expected to do for 12, 18, 24 months. The Skaddens and Lathams of the world used to hire them in bunches for exactly that purpose and, although I admit I know nothing about the numbers of this last summer class, some of those firms, as of last year, had still never hired more summers than they did in 2007. Automation took a chunk of it; the rest went to the massively increased numbers of contract attorneys/temps that firms began using, both on the supply side (as many firms/clients moved to use them to save money) and the demand side (the hordes of unemployed lawyers). Those stories were told in horrifyingly scintillating color on these forums, and if they are to be believed, the doc review circuit at that time paid peanuts and was an absolute nightmare.

Any tech trickling down now that a recession could kick into high gear?

Seems like some firms (e.g., Big 4) have gotten more aggressive in offering legal adjacent services at a discount that could affect the legal market. For example, contract review automation for LIBOR agreements and compliance consulting.

I'm a senior in transactional so I'd be the last to know, but my impression is that whatever happened was way slower than the general growth of legal services.

They've been talking about predictive software for contracts for decades. It keeps not happening. Really, your firm probably does a loan in substantially the same way it did 20 years ago, from a tech perspective.

[ligma]

Remember that the Great Recession is called “Great” for a reason. It was a uniquely bad situation. Unless something similarly extraordinary happens, don’t assume that all recessions will be similarly bad. They are a common occurrence and usually far less dramatic.

Since the GFC ended, we’ve had an unusually long and successful bull run on the economy, so I can understand why most associates lack context for what a “normal” recession looks like. Bottom line is don’t panic until there’s reason to panic.

This is a uniquely bad situation waiting to unfold as well. Insane corporate debt bubble. Inflated asset prices across all asset classes (e.g., super growth stocks have taken a big hit, but we have mega caps yet to fall, the real estate market still needs to crash, etc), combined with inflation, global instability, and an energy crisis. Not to mention the Yen is fucked, chinas economy is on the brink and Xi is using zero Covid to mask it, etc. things will get very bad.

[nealric]

Remember that the Great Recession is called “Great” for a reason. It was a uniquely bad situation. Unless something similarly extraordinary happens, don’t assume that all recessions will be similarly bad. They are a common occurrence and usually far less dramatic.

Since the GFC ended, we’ve had an unusually long and successful bull run on the economy, so I can understand why most associates lack context for what a “normal” recession looks like. Bottom line is don’t panic until there’s reason to panic.

This is a uniquely bad situation waiting to unfold as well. Insane corporate debt bubble. Inflated asset prices across all asset classes (e.g., super growth stocks have taken a big hit, but we have mega caps yet to fall, the real estate market still needs to crash, etc), combined with inflation, global instability, and an energy crisis. Not to mention the Yen is fucked, chinas economy is on the brink and Xi is using zero Covid to mask it, etc. things will get very bad.

Nobody knows nothin. Maybe we get a debt crisis, but inflation could just as easily create a "great stagnation" rather than a great recession, similar to the 1970s. The bottom never fell out- it was just a grind with poor investment returns for over 15 years. Or we could get another boom based on some yet unanticipated technological development. Or Putin could nuke the world. Nobody knows.