As law firms adjust to the new economic realities unleashed by the Great Recession, young attorneys are feeling the fallout. While today’s newly minted attorneys dodged the massive layoffs that swept though Big Law in 2009, they are finding limited slots at top firms, stagnant—even falling—salaries, and slimmer odds of making equity partner.
Still, it’s not all bad news for young guns. For those lucky enough to crack into a top 200 firm, the opportunities to hone one’s craft come early and often. “Talented associates are still in demand,” notes Mary K Young, a consultant with the Zeughauser Group, a management consulting firm. And signs show that associate morale is higher today than it’s been in several years. Big Law has never been for the faint of heart—that’s particularly true now. Expect pledging 60-plus-hour workweeks to a firm that will become your primary devotion. “There’s much more pressure being put on associates to hit the ground running,” says David Wilkins, director of Harvard Law School’s Program on the Legal Profession.
“The demands are greater, but so too are the opportunities for young associates,” says Eric Murdock, a partner with Hunton & Williams’s Washington, D.C., office. Today, big law firms are supporting, even nurturing, their associates in many ways—though not necessarily with rising salaries and bonuses. Support comes in the form of enhanced training so young associates gain rainmaking competencies earlier, added work-life flexibility to keep talent, and even alternative routes—some later, some lower paid—into large firms.
The recession triggered many changes affecting today’s young attorneys. Demand for legal services contracted 9 percent during the downturn and hasn’t fully recovered. “We’re seeing a sea change,” says Young. After 45,000 layoffs during the recession, firms are hiring, but not near earlier levels. The legal services demand curve in recent years “looks like a wild roller-coaster ride,” says Mark Medice, senior director of the Thomson Reuters Peer Monitor service. This year has seen “slow demand and rising expenses,” says Medice. “All the practices are moderating except labor and employment.”
“Today, clients are calling the shots,” says Wilkins. That’s led to fixed fees and other alternatives to billable hours. Clients don’t want to pay to train young lawyers. That has limited spots at top firms and given rise to legal process outsourcing firms, which focus on document review and other legal services grunt work at cheaper rates using domestic or foreign lawyers. Law firms also are looking to temporary and contract attorneys to hold the line on costs, says Marjorie Grossberg, a partner in the legal recruiting firm Major, Lindsey & Africa.
Among the class of 2008, 19 percent of attorneys went into full-time positions at law firms with 251 or more attorneys. Only 10.5 percent of the class of 2011 landed such jobs, according to NALP-the Association for Legal Career Professionals. Hiring was up in 2011, but “will slow down” with flattening demand, Medice says. “There are too many lawyers and too many law firms,” observes Greg Nitzkowski, global managing partner at Paul Hastings.
“The employers have more of an upper hand,” Wilkins says of the law firms, “but still the world belongs to talent.” It used to be that the most “talented” students graduated in the top quarter of the top 25 law schools. “Having great grades and being a wonderful person was great 10 years ago,” Nitzkowski says, but today firms look for more, including outside experiences, from military service to entrepreneurial efforts to other careers. “The successful ones are the scrappy kids,” notes James Leipold, NALP’s executive director, not always the top performers at elite schools. Wanted: individuals with good judgment, financial literacy, and an understanding of the client service business model, as well as those with good management, team, communication, and interpersonal skills. Of course, stamina to work long hours and pull those all-nighters is a given. “Law schools don’t teach much of that,” Wilkins says.