Wednesday, February 1, 2012
Wall Street Journal, Law Firms Keep Squeezing Associates:
Law firms are finally starting to recover from the recession, but they aren't taking their young lawyers along for the ride. Even as profits return, cautious partners with one eye on damaged balance sheets and the other on stingy clients plan to hang onto the lean silhouettes they acquired during the downturn.
That means little relief for young associates—who took on hefty law-school loans, only to run into layoffs and stagnant pay in the years since 2008—and fewer chances for new law-school graduates to get in on the ground floor. And the elusive brass ring of partnership has grown more remote. ...
Conditions at law firms have stabilized since 2009, when the legal industry shed 41,900 positions, according to the Labor Department. Cuts were more moderate last year, with some 2,700 positions eliminated, and recruiters report more opportunities for experienced midlevel associates.
But many elite firms have shrunk their ranks of entry-level lawyers by as much as half from 2008, when market turmoil was at its peak. Salaries and bonuses for those associates have remained generally flat. ...
During the downturn some firms pared associate ranks through layoffs and by delaying start dates for fresh law-school graduates. And many firms for routine tasks now use less-expensive alternatives to young associates, such as contract attorneys and outsourcing firms. ... White & Case LLP, an international law firm, plans to hire about 60 entry-level lawyers this year, compared with prerecession classes of 90 to 100.
"The efficiency of law practice has just changed dramatically in the past five years," says Bill Dantzler, a hiring partner and head of the firm's tax practice. "We don't have to have these armies of young associates. It's good for the clients, it's good for everybody."
That means reputable firms can be even more picky about whom they hire. While firms still compete for the highest-ranking graduates from Ivy League and other top law schools, it is a different story for solid candidates who lack gold-plated résumés. Students with lower class rankings or from second-tier schools who once would have made the cut "wouldn't have a prayer of getting in now," Mr. Dantzler says.