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

[Anonymous User]

Obviously, nobody knows precisely, but what are the possibilities for those of us with September 2023 start dates? Did deferrals during the Financial Crisis transcend beyond one entering class? It is possible that we'll be Gundersoned? Any and all related feedback/historical knowledge would be deeply appreciated.

[Anonymous User]

Obviously, nobody knows precisely, but what are the possibilities for those of us with September 2023 start dates? Did deferrals during the Financial Crisis transcend beyond one entering class? It is possible that we'll be Gundersoned? Any and all related feedback/historical knowledge would be deeply appreciated.

Yes and yes. There's a substantial chance a lot of you will get deferred a year if things keep up. Hard to say a year out though.

[thisismytlsuername]

Obviously, nobody knows precisely, but what are the possibilities for those of us with September 2023 start dates? Did deferrals during the Financial Crisis transcend beyond one entering class? It is possible that we'll be Gundersoned? Any and all related feedback/historical knowledge would be deeply appreciated.

Dang, you should really read up on what happened to the classes of 2008-2010 if you think that having your start date delayed a few months with 50% pay is the worst than can happen to you.

[Dahl]

I graduated in ‘10 and I think the ‘09 grads had it the worst. The ‘08 class already had their summer and offers and some may have been deferred but I don’t remember many no offers. When it came to the ‘09 class though, it was a different story. Firms hadn’t adjusted class sizes down yet, so the no offers were pretty brutal and 3L OCI wasn’t much help to those people. My own summer was rough and there were some no offers/delayed start dates, but most firms had already shrunk their class sizes at that point and if they were delaying start dates usually did so with a healthy stipend. Not sure if things will be the same this time around as hiring still seems to be strong.

[Anonymous User]

I graduated in ‘10 and I think the ‘09 grads had it the worst. The ‘08 class already had their summer and offers and some may have been deferred but I don’t remember many no offers. When it came to the ‘09 class though, it was a different story. Firms hadn’t adjusted class sizes down yet, so the no offers were pretty brutal and 3L OCI wasn’t much help to those people. My own summer was rough and there were some no offers/delayed start dates, but most firms had already shrunk their class sizes at that point and if they were delaying start dates usually did so with a healthy stipend. Not sure if things will be the same this time around as hiring still seems to be strong.

Also, the classes of 05-07 had it underratedly tough. They were the most frictionless for firms to get rid of when things got rough, and even the ones who were lucky enough to be at stable firms and had the usual degree of burnout had extremely diminished exit options. Lots of promising careers that took an unrecoverable hit.

OP is on the right track though, things are not going to get nearly as bad as the GFC. I'd definitely expect lots of delayed start dates, but in the scheme of things, that's not so bad.

[Anonymous User]

I graduated in ‘10 and I think the ‘09 grads had it the worst. The ‘08 class already had their summer and offers and some may have been deferred but I don’t remember many no offers. When it came to the ‘09 class though, it was a different story. Firms hadn’t adjusted class sizes down yet, so the no offers were pretty brutal and 3L OCI wasn’t much help to those people. My own summer was rough and there were some no offers/delayed start dates, but most firms had already shrunk their class sizes at that point and if they were delaying start dates usually did so with a healthy stipend. Not sure if things will be the same this time around as hiring still seems to be strong.

Agreed, I was a 2010 grad as well. I remember our summer class got cut in half and even then one-half of the class still got no offered. But the 2009 grads had it worse because they finished up their 2L summer, got return offers, came back to school and then had return associate job offers revoked en masse. A lot of times, this was after 3L OCI, but it's not like it would have made a tangible difference. There simply weren't any jobs that they could go get. They're a real lost generation in biglaw.

[thisismytlsuername]

I don't care to get into a dumb argument on the internet over which class of us geezers had it worst, but y'all realize that "Lathamed" exists not only because Latham laid off so many lawyers in Feb 2009, but because many of them were first years -- '08 grads who had only been at the firm a few months?

[Anonymous User]

I'm still of the opinion that most reputable firms will keep the people they hired, so except for the one or two who aren't, class of 22 are starting their jobs and class of 23 will as well. But it depends on how bad things get. If we have an extended period of no work we're all going to suffer.

[Anonymous User]

Related question: What do we think of the potential impact on those that are clerking now with a '23 start date?

I spent a year at a firm, then left for a district court clerkship. Expecting a '23 return start. Should I be concerned?

[Anonymous User]

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.

[ukjobsonwetton]

Los Angeles Law Firms Before and After Recessions.
From Milken Institute, and it was published last year.

[nealric]

Obviously, nobody knows precisely, but what are the possibilities for those of us with September 2023 start dates? Did deferrals during the Financial Crisis transcend beyond one entering class? It is possible that we'll be Gundersoned? Any and all related feedback/historical knowledge would be deeply appreciated.

Summary of great recession hiring:

Class of 2007: bumper crop of SA hiring. Anybody with a desire to do biglaw and a pulse got a biglaw offer at T14 schools. Salaries had just been bumped to 160k, plus first year bonuses of $30k+- which was considered obscene at the time. Most firms gave 100% offers to summers. Some even were asked to start working early (some even part time during their 3L year). However, this class was the prime target for layoffs in late 2008/early 2009.

Class of 2008: They had good SA hiring season and most firms will still doing 100% (or close) offers. However, many were laid off as junior associates (sometimes within just a few months)- the infamous "Lathaming", so known because Latham and Watkins was particularly aggressive on laying off brand new juniors.

Class of 2009: Had a good SA hiring season with just a few excess no-offers in some firms. They were typically delayed 1-1.5 years for start dates, and a few firms outright rescinded offers (and some of course were at firms like Dewy that just imploded)

Class of 2010: Had a mediocre SA hiring season. The ones who did callbacks early (August) did OK, but offers dried up shortly after the Lehman collapse in mid-September. The 2009 Summer had very high no-offer rates and very reduced activities for most firms, in addition to a shortened summer (going from 12 weeks to as few as 6). 50% no-offers were common, and there were some offices that just no-offered the whole class. Those that did get offers were often delayed on start dates 6 months to a year.

Class of 2011: Had a terrible SA hiring season. Even some HYS folks struck out at OCI. Recruiting at many schools in the T10-20sih range was half of normal. Some T20-100 schools went from 20% of the class getting biglaw to almost none. If you managed to snag an SA gig, offer rates were actually Ok, but not quite back to the near 100% offer rates that used to be standard.

Class of 2012: Much better than class of 2011, but summer classes were still abnormally small (perhaps 60-75% of "normal") as firms in fall of 2010 were nervous about whether the recovery would be sustained.

[Anonymous User]

I think the debate over "who had it worst" for the great recession kinda illustrates the answer for the OP. I think all classes between 2007-2013 have an argument as to why they were the most effected. 2007-2008 got fired, 2009 got no offered after they committed, 2010-2012 just didn't get offers in the first place.

The point is, legal hiring is a long process, that's just been pushed up even further in recent years with more firms hiring 1Ls. While the great recession was a lot worse than this, yes you can expect impacts to spread beyond just one hiring class.

[Bosque]

Accidental anon, that's me above. And Nealric's summary is pretty much exactly on point for what I was getting at. The "recession" officially ended I think in June of 2009, but the impacts are spread across a good six years of new associates.

[Anonymous User]

More than just recession, the "jobless recovery" (if that term is still in use) lingered on for years, you can even make the case that it only ended around 2018 or so. The job market in 10-15 sucked for everyone, just really rough. Big Law classes shrank and many firms and markets are still below the peak.

[Anonymous User]

More than just recession, the "jobless recovery" (if that term is still in use) lingered on for years, you can even make the case that it only ended around 2018 or so. The job market in 10-15 sucked for everyone, just really rough. Big Law classes shrank and many firms and markets are still below the peak.

This is a good point. I was C/O 2016 and definitely not nearly as bad as the classes from 2008-13, but at my big law firm in a major market, my summer class was 23. In 2007, the firm had a summer class of 60. I don't think it ever got back up to 60, but it was really only the last few years that it went above 30 again.

[MergerQueen]

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.

I'm not an economist, but there is a potential for this recession to be uniquely grave as well. The relative temporal proximity of the GFC doesn't insulate us against another extreme crisis.

[Dahl]

I think the debate over "who had it worst" for the great recession kinda illustrates the answer for the OP. I think all classes between 2007-2013 have an argument as to why they were the most effected. 2007-2008 got fired, 2009 got no offered after they committed, 2010-2012 just didn't get offers in the first place.

The point is, legal hiring is a long process, that's just been pushed up even further in recent years with more firms hiring 1Ls. While the great recession was a lot worse than this, yes you can expect impacts to spread beyond just one hiring class.

Very much agreed. I certainly wasn’t trying to debate who it was worst for, as it was pretty terrible for everyone. Even for those of us who ended up at firms and weren’t layer off at all, the stress of the lack of security with looming loans (and studying for the Bar through that) was genuinely awful. I hope it’s nothing like that for current students and young associates.

One additional result was how much more difficult it was to get government jobs at the time. Unsurprising but for those who wanted gvmt all along it was disappointing.

[Anonymous User]

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

[Anonymous User]

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

I mean this is a huge generalization. Plenty of folks had loans to deal with when they graduated, investing for 1-2 years isn’t going to get you a vast down payment, that kind of money isn’t always liquid, NYC and SF etc were still incredibly expensive and salaries were lower. Just because houses cost less 10 years ago than they do now doesn’t mean that they were affordable then.

[Anonymous User]

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

LOL this is such a weird take. "Sure, it's great to invest money and then lose half of it because them over the next decade the markets will go up again". And anyone who bought in 2007 got absolutely screwed.

Nah there's no silver lining, it sucked. Hope we don't have a repeat and that within a year or so markets will adjust.

[Anonymous User]

Related question: What do we think of the potential impact on those that are clerking now with a '23 start date?

I spent a year at a firm, then left for a district court clerkship. Expecting a '23 return start. Should I be concerned?

Know an HLS Magna / Law Review candidate who graduated in '08 and clerked for CA9 in LA for a year. He was supposed to join Latham after clerkship but his offer was rescinded when the great Lathaming happened (an entire entry class cancelled). Ended up doing doc review (believe that's still what he was doing as of 2017) to support his family and never got another shot at big law.

Obviously fingers crossed nothing like this will happen this cycle but try to keep your options open. Firms have no qualm screwing anyone, especially their juniors.

[Anonymous User]

Related question: What do we think of the potential impact on those that are clerking now with a '23 start date?

I spent a year at a firm, then left for a district court clerkship. Expecting a '23 return start. Should I be concerned?

Know an HLS Magna / Law Review candidate who graduated in '08 and clerked for CA9 in LA for a year. He was supposed to join Latham after clerkship but his offer was rescinded when the great Lathaming happened (an entire entry class cancelled). Ended up doing doc review (believe that's still what he was doing as of 2017) to support his family and never got another shot at big law.

Obviously fingers crossed nothing like this will happen this cycle but try to keep your options open. Firms have no qualm screwing anyone, especially their juniors.

I don't understand this. At some point post 2010 surely he could try to get a district court clerkship and then back to biglaw or just apply to biglaw and take a class cut. Being such a strong candidate surely there are law firms that would take him once the worst of the GFC was over right?

[Anonymous User]

Related question: What do we think of the potential impact on those that are clerking now with a '23 start date?

I spent a year at a firm, then left for a district court clerkship. Expecting a '23 return start. Should I be concerned?

Know an HLS Magna / Law Review candidate who graduated in '08 and clerked for CA9 in LA for a year. He was supposed to join Latham after clerkship but his offer was rescinded when the great Lathaming happened (an entire entry class cancelled). Ended up doing doc review (believe that's still what he was doing as of 2017) to support his family and never got another shot at big law.

Obviously fingers crossed nothing like this will happen this cycle but try to keep your options open. Firms have no qualm screwing anyone, especially their juniors.

I don't understand this. At some point post 2010 surely he could try to get a district court clerkship and then back to biglaw or just apply to biglaw and take a class cut. Being such a strong candidate surely there are law firms that would take him once the worst of the GFC was over right?

I never asked or spoke with this person on this subject at all (don't want to pry given the sensitivities) so don't know specific circumstances.

If I recall correctly (I was not out of college until mid 2010s) hiring didn't improve meaningfully until 2014 - 2015 (it only ramped up significantly in the last couple of years recently outside tech). By that time he would have been 7-8 years out of school and it gets increasingly difficult returning to the grind when you have other obligations outside work. Also believe he took the lathaming very hard and personal which might have contributed to his refusal to get back out there.

[Anonymous User]

I don't think anyone under like 30, maybe even 35, can understand the job market back then. By 2010-11 that guy would have been competing with 3 years of backload - why so confident another clerkship was possible? And any firm looking to hire associates in 2010-2014 would have a ton of 2007 grads who got biglaw under their belt then got laid off and were desperate to get back in at any class year.

I met a similar person -- also great credentials and had a biglaw summer, then got canceled. Got a state gov job and stayed there. This was my 1L supervising attorney. Per public records, this person makes 90k a year. Which is is not bad for a gov job. But after over a decade of experience, it's still less than half of entry level biglaw salary.

This legit happened to tons of people, and they all just found other jobs, I hope. But a great many never made it to biglaw.