Law School Applicants and Students Face Changing Landscape for Employment

In “No Longer Their Golden Ticket,” the New York Times shines a spotlight on the rough and changing landscape of the legal job market and paints a dismal view of associate life at Big Law firms — worse now than before the Recession. The article reports on the reshaping of law firm culture and describes the legal profession as one in a tight squeeze: “lurch[ing] through its worst slump in decades, with jobs and bonuses cut and internal pressures to perform rising.”

Not surprisingly, it’s the economy. “The main reason for the squeeze is the Great Recession, which has cut deeply into the kinds of companies — in financial services, real estate, high tech — that are the wellsprings of fees for corporate lawyers. The client companies that survived are doing fewer deals, and driving harder bargains with their lawyers: many negotiate a flat fee for the job, meaning firms can no longer bill by the hour for every legal eagle on the case.”

The squeeze felt by associates at BigLaw firms and other lawyers seeking employment is not news to those living the life or for anyone following the legal blogs, which track daily the attorney layoffs, start-date deferrals, salary freezes, scaled back recruitment programs and bonus cuts that have become so familiar. As one law firm partner interviewed for the story observed: “the next generation may have to expect less from a legal career.”

‘Less,’ here seems to mean, ‘less money.’

What has come to pass is that a law degree is not a ticket to a six-figure salary and a six-figure bonus,” said Matthew A. Feldman, a partner at Willkie Farr & Gallagher in New York. Smart, talented people will still find advancement within firms, he said. But “speaking candidly,” he added, “in the past, associates were a little oblivious” in presuming that if they “simply showed up every day and didn’t offend anyone, they were there indefinitely. They have had a wake-up call.

It’s clear that certain things about law-firm life and the wider legal employment market are changing. But aside from “less money,” experts say that some of these changes might actually be healthy. These include a wider array of recruitment practices, a shift from lock-step to merit-based, competency-based advancement and compensation, professional training and development that includes apprenticeship programs as well as generally a more diverse approach to the business model of a law firm. On a recent Law School Podcaster segment, Ashby Jones, Lead Writer for the Wall Street Journal Law Blog and Jim Leipold, Executive Director of NALP (National Association for Law Placement) shared some of their insights on these changes with our listeners.

Here is some of what they told us:

•Ashby Jones, Lead Writer, The Wall Street Journal Law Blog:

“Law firms are sort of trying to rethink the way they do business, rethink the way they hire people, rethink the way they pay their employees, pay their associates, compensate their partners et cetera, sort of everything that has been the textbook way that law firms run themselves is being reshaped and rethought right now, so it is sort of a crisis point and inflection point and law firms are having to adjust to it. How does that affect the current law student? For the most part, it is a challenge, it is a moment of crisis, but in crisis arises opportunity often. It’s just a matter of knowing where to look and knowing what opportunities are going to attract you.”

• Jim Leipold, Executive Director of NALP (National Association for Law Placement):

“In a way, things got so bad that firms were freed up from looking over their shoulder to see what the other firms were doing and it allowed them to try some new things. So we’re seeing some firms, for instance, implement what they’re calling apprenticeship programs where they’re bringing students on in the first year at a much lower salary but also with a much lower expectation in terms of billable hours and they’re devoting more of that first year to training. We’re seeing some firms lower their starting salaries and others not. We’re seeing some firms say, “We’re going to skip our summer program and just hire laterally. We’re not going to take first year law students right out of school. We’re going to wait and just grow our firm laterally.” So I think what that means is that, where in the recent past, law firms, particularly large law firms, have tended to all do the same thing in almost a knee-jerk way and salaries have coalesced very quickly around the common number and recruiting practices have coalesced very quickly around common practices. I think what we’re going to see going forward is more diversity of practice in all of these areas and I actually think that’s healthy. So you’ll have firms that compete with each other some of whom have apprenticeship programs, some of whom don’t; some of whom offer a starting salary of 160, some of whom offer starting salary that’s considerably lower, some of whom abandon a model of hiring first year new associates and others who continued to have traditional summer programs followed by first year associates. In the training and development arena, you see some law firms leaving this lock step model where each year you automatically get a promotion and moving to a more merit based, competency based system. And so you may or may not progress from year to year. All of those things were beginning to happen before the recession for a number of reasons but the recession accelerated most of those changes and I think will support those changes… .So students are just going to have to be prepared for a much broader range of practices and understanding for each firm that they’re interested in what course that firm is choosing.”

Check out our podcast “The Current Economic Environment: What It Means for Law School Applicants and Students,” to hear more on this topic.