If present trends continue in the big firm market, we are heading toward — you pick the cliche — a paradigm-shifting, blood-in-the-suites, terror-on-the-campus hiring and retention crisis.
The “economic reset” that General Electric’s Jeffrey Immelt has tagged seems likely to force changes in the way firms recruit, pay and/or retain their lawyers. The market for labor has changed and, for now at least, there’s no normal to which it can return.
Law firms are actively considering the prospect of pay cuts, delayed starting dates, sharply reduced offers and more lay-offs. The carnage of Black Thursday will likely continue. This is an ugly situation made worse by the peculiar hiring schemes that were tolerable during good times but now are under serious stress. Not every firm has swung the scythe and some never will. It’s notable though that with so many firms pushing out so many people, there is little of the usual talk about how firms are endangering their cultures. For the moment they are more concerned about managing their businesses.
If nothing changes, this fall the same law firms that recently laid off lawyers will start welcoming large groups of new lawyers, whom they will pay too well and for whom they will have too little work. If the layoffs were about saving money in a downturn, the new hires will overwhelm any savings and will signal that the firms regard the economic crisis as little more than a mild detour on the golden brick road.
I wish it were otherwise. But consider the current Conventional Wisdom: At law firms work (and profits) are down, attrition is far below average, law school graduates hired in an optimistic time are about to join firms awash in anxiety, and the conveyor belt that will bring still more eager and talented young lawyers aboard is about to start up again.
This does not seem to be a sustainable situation. If it’s not, it will, at a minimum, force law firms to make a harsh choice between the lawyers they already have on staff and the ones they’re about to welcome.