I am not a career counselor, but everyone applying to law school should be thinking about the marketability of a lawyer's skills and education. I called upon a real expert in legal hiring, Amanda Ellis, president of Amanda Ellis Legal Search (www.aellislegal.com). Amanda focuses on the placement of bankruptcy attorneys nationwide and of all attorneys in Texas, with a special emphasis on attorneys relocated to Texas. She very kindly agreed to write a 3-part post about the legal job market for new attorneys, which should be of great interest to my readers.
9 to 5: 9 Observations Regarding the Legal Job Market & 5 Strategies for New Attorneys Entering the 2009 Legal Job Market – A 3 Part Series (Part 1 of 3)
By Amanda C. Ellis, Esq.
If there’s one question I’ve been asked repeatedly over the past few months it is this: “how has the economy affected the legal job market?” In the past few weeks, I’ve also received numerous inquiries from contacts on Twitter and friends who are in law school about how the current legal job market and economy will affect new attorneys graduating in 2009 (or those who graduated in 2008 and are still looking for a job). I’ve compiled a list of 9 trends I’ve observed in the current legal market and have outlined 5 strategies to help new attorneys find employment in the 2009 legal job market. Because of the length of this post, I’ve divided the post into 3 separate blog entries: (Part 1) observations 1-4 which happen to be observations about large law firms; (Part 2) observations 5-9; and (Part 3) the 5 strategies.
9 Observations Regarding the Legal Job Market:
1. Large firms lay off associates and staff, rescind offers. According to the Law Shucks Layoff Tracker, 1,762 lawyers lost their jobs in 2008 (this information is also contained in The American Lawyer’s The Layoff List, a comprehensive list of all large firms that eliminated associates during 2008). The layoff trend began in January 2008, primarily in firms with large structured finance practices; however, the trend spread rapidly in the fall months as certain financial institutions collapsed and credit markets froze. The disaster in the financial markets also caused some large firms to pause and reconsider some outstanding offers. At least one large law firm rescinded offers to 2Ls, and I’ve heard from lateral candidates about a few large firms that rescinded offers to lateral candidates because they wanted to see how quickly the economy rebounds.
2. Large firms invoke hiring freezes (or disguised freezes). In late October, a large firm announced that it had instituted a hiring freeze on lateral associates and staff; the firm made it clear that the freeze would not apply to the firm’s 2009 summer associate class. I’ve seen many other firms take similar steps though they don’t call their action a hiring freeze. Probably the most common approach I’ve seen is the one where firms fill their current hiring needs by pulling associates from slow practice areas – for example, moving a structured finance associate to the firm’s bankruptcy section. Other firms that normally post all of their job openings on their websites have removed all job openings. Another common approach is firms informing candidates (or recruiters) that they don’t have any hiring needs at this point and plan to assess their hiring needs in “a few months.”
3. Large firms freeze associate salaries and cut associate bonuses. It probably doesn’t surprise you that large firms’ bonus announcements to date have been significantly lower than 2007 bonuses. The Above the Law blog tracks 2008 bonus announcements and details in its Associate Bonus Watch. Additionally, at least two large firms have announced salary freezes. I’ve even seen a few firms (primarily, firms dependent on their real estate practices) actually reduce associates’ base salaries; in each case, the firms explained that their actions were preventative measures to avoid layoffs.
4. Large firms seek firm-wide approval on lateral hiring decisions. Most lateral hiring decisions are made by either the department head or by the firm’s hiring committee. In the last few months, I’ve seen more and more firms seeking firm-wide approval on hiring decisions. For example, an IP partner of an AmLaw 100 firm recently informed me that he would have to obtain approval from all IP partners firm-wide before interviewing an IP lateral candidate. It did not matter that the candidate graduated in the top of her class from a top 10 law school; the firm implemented the firm-wide review and approval process as a checks and balances approach in light of the economic downturn.
While observations 1-4 may sounds grim and depressing, you must keep the news in perspective. For example, look at the 1,762 layoffs in the context of the total number of attorneys in the US -- 1,143,358 in 2007 – we are talking about 0.15% of all US attorneys. Also, the observations relate specifically to large firms, yet the vast majority of new attorneys begin their careers at smaller firms (discussed further in Part 3). Part 2 of this post will continue with observations 5-9 and will include some positive observations about the current legal market.