The downturn has likely ended the traditional BigLaw model that produces $160,000 starting salaries and relies on elite law schools to supply new associates.
The situation is so bleak, according to Indiana University law professor William Henderson, that some law firm hiring managers believe associate start dates will be pushed back even further, possibly from January 2010 to September 2010. Henderson makes his observations on the downturn’s likely winners and losers in a comment to a post at Brian Leiter’s Law School Reports.
The winners, in Henderson’s view, are regional law firms that will take work away from their larger competitors and the associates they employ. The losers will be big law firms with armies of associates and the elite law schools that supply the talent.
“There is a fairly general consensus that the bubble has permanently burst on the traditional BigLaw model that produces the $160K salary structure,” Henderson writes. “The high-leverage firms in major markets are reeling the most, primarily because there is a lot less money being spent by GCs, and they are imposing brutal cost-containment strategies.” Even if starting pay remains at $140,000 or $160,000, Henderson says, every extra dollar above that will be “merit-based.”
Henderson says two managers at large law firms predicted the September 2010 associate start dates and told him, “There are no jobs right now—none.”
As large law firms suffer, so too will the brand-name law schools, he says. “Many, many GCs are less impressed by ‘brand’ than by cost containment and results,” Henderson says.