The cookie-cutter recruitment model large law firms have relied on for decades has been exposed as deeply flawed in light of new economic realities that point to weaker demand for legal services for years to come.
As a result, firms have jettisoned portions of the established recruitment practice that target law students two years before their start dates. Traditionally, each fall firms recruit summer associate classes for the following year, and up until recently over 90 percent of those summer associates would secure job offers for first-year associate spots for the next fall.
But that is changing.
Firms had to scramble earlier this year to figure out how to handle outsized summer associate programs and first-year associate classes, for whom there was little work after the market crash. Once programs were canceled and most first years were deferred, law firms had room to breathe.
Many law firm leaders now are taking the time to rethink the recruitment process soup-to-nuts, from pondering the wisdom of summer programs to slashing first-year salaries. One area of universal agreement: It’s law students who will get squeezed.
“It is antiquated. It just does not make economic sense. It does not make good business sense,” said John V. Snellings, hiring partner at Nixon Peabody LLP, which has 150 attorneys in Boston and 800 total. “We are starting to look at alternatives, including what an apprenticeship would look like. If a young lawyer can’t work on a matter because their rates are too high — how do we get them the training they need?”
Nixon Peabody has sliced first-year associate salaries to $145,000, down from $160,000. This month the firm offered about 60 percent of its 52 summer associates jobs next fall, down from a 95 percent offer rate the year before. And next year’s summer class will be composed of 26 law students. Meanwhile, the firm’s training team is putting together scenarios to evolve the associate program, including the apprenticeship idea and potentially creating a “center of excellence” that would put all of the firm’s first-years together, to train them until they’re ready to “graduate” to a larger market.
The furious demand for law students the market saw in recent years may not come back for some time, especially considering that a large number of associates were supported in part by deal flow fueled by easy access to cheap debt. Indeed, college seniors should absolutely think twice about attending law school if they are relying on huge salaries to rescue them from law school debt, said Brion Bickerton, a partner at legal staffing firm Major, Lindsey & Africa in Boston.
“The age-old system hit a brick wall with the sharp downturn,” said Bickerton. “Never before has there been any kind of real consideration by firms to change the ways they recruit and hire. There’s certainly a lot of good business sense in trying to delay your hiring until you have a much more predictable work level.”
The model has faced added pressure from clients who increasingly balk at shelling out high hourly billing rates for inexperienced associates.
“I spend a lot of time out in the world talking to clients. One thing I hear over and over again is that they are not willing to pay the kinds of hourly rates for young associates that they used to,” said Walter G.D. Reed, managing partner of Edwards Angell Palmer & Dodge, which has 212 lawyers in Boston and 541 firm-wide. “Either we’re going to have to come up with a new way of pricing our services or we’re going to have to figure out a different way of bringing young lawyers along.”
Edwards Angell cut its summer program this year, but plans on having one next year, although it will be much smaller. The firm also dropped first-year salaries to $145,000 — the “new market rate in Boston,” Reed said.
McCarter & English LLP, which has about 70 lawyers in Boston, has opted not to have a summer associate program next year because there’s simply not enough work.
“We do project pretty far into the future,” said Katie Gummer, hiring partner at McCarter & English. “Given what’s gone on, that trend will probably stop.”
Boston-based Sullivan & Worcester LLP, which has about 200 lawyers, has maintained its summer program, but at a downsized level of nine students this year and five next year.
The firm is currently holding off on making offers to the most recent summer associates, said Managing Partner William Curry. “It’s a hard decision. You’re really forecasting a long way out.”