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NALP 2010: New Litigators be Warned

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As you may have heard, I’m in Puerto Rico covering the 2010 NALP Annual Education Conference. There are so many panels and talks scheduled at precisely the same time that I’ve had to prioritize what will matter most to ATL readers. I’m tweeting about the conference, so if you want me to check something out, just let me know.

Sadly, I already decided to skip the “How to do a body shot when you’re 40” break-out session. Instead, I went to “Recruiting in the Aftermath of the Recession.”

It was a fascinating talk. The panelists:

– Frank Kimball, Owner, Kimball Professional Management
– Helen Long, Director of Legal Recruiting, Ropes & Gray

I figured ATL readers would like to get a peek at this one because Kimball and Long were talking directly to firm recruiters about lateral hiring. I was not disappointed. During Kimball’s opening, he wondered if “some legal recruiter will say in 2013, ‘In order to gain the competitive advantage, let’s raise starting salaries to $185,000.'”

Meanwhile, Long predicted “The Lateral Hiring Crisis of 2013.” I don’t know who this 2013 person is, but I’d sure like to meet her.

But sadly, Kimball and Long predict that 2013’s potential bounty will fall on only a select few associates…

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The two panelists are worried about a lateral crisis, but not just because they expect an uptick in legal work by 2013. Instead, they seem to think that firms have gravely underestimated the twin thrusts of (a) small class sizes from 2009 through 2011, and (b) and the wave of voluntary attrition that could start happening as early as 2011 (once people get their bonuses).

While anybody with a calculator can see that class sizes for ’09, ’10, and ’11 graduates are minuscule compared to what they were before, the voluntary attrition point needs more explaining.

Kimball and Long addressed a point that is well known to regular ATL readers: as they put it, the recession has severely damaged the “bond of trust” between associates that have lived through it and their firms. As much as current juniors might be happy to have a job right now, the recession — with its attendant layoffs, deferrals, salary freezes, and the like — has left a bad taste in the mouths of associates. Once they have a reasonable opportunity to get out, the panelists predict that many of them will take an exit option.

Of course, associate discontent is nothing new, but Kimball pointed out that associate gripes are far more transparent than they were before:

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[Younger associates] are more willing to give a voice to their concerns. People were afraid to talk about that 25 years ago… Our good friend David Lat turned on the fire hose.

Yeah, he did. And associates are now more aware than ever not just of their own feelings, but also of the perceived “mistreatment” suffered by friends and colleagues.

Couple that with the small class sizes to begin with, and Kimball and Long predict a “doughnut hole” in the Biglaw model. Firms will have a bunch of highly qualified senior associates. Kimball pointed out that the people who are senior associates right now have survived not one but two different recessions (the first being post-9/11). And firms will surely be able to ramp up junior associate hiring by 2012 or 2013 if there is need. But the mid-level workhorses will be largely gone — small numbers to begin with, and in high demand.

So, I guess if you can hang on till 2013, you’ll be golden. Woot?

It’s not like surviving the Mayan Apocalypse will solve all associate problems. Both Kimball and Long were very down on the opportunities for junior litigators going forward. Frank Kimball:

In ten years, entry-level, partner-track hiring in litigation will fall 50%, permanently.

Helen Long:

[W]hat you’re finding in large markets is that only large litigations are profitable for large firms…. Bet-the-company matters. That kind of litigation is less diverse, and the role of associates is different.

The problem, if it isn’t obvious, is that clients don’t want to pay hefty fees for first- and second-year document monkeys. Outsourcing and/or relying on non-partner-track attorneys is a more cost-controlled alternative.

The future doesn’t look bright for young litigators, but it looks especially bleak for young litigators coming from schools outside the U.S. News top 20. Long directly addressed the NALP recruiting change that forces firms to recruit earlier and for a shorter amount of time. This puts a strain on firm resources, which means that firms won’t be able to recruit at the same number of schools that they have traditionally gone to.

You can guess who gets screwed in that equation. One of Long’s slides read:

Placement levels for many schools outside the top 20 will fall and stall – the stall will be permanent.

Long engaged the law firm recruiters in the audience in a bit of a workshop, in terms of how to tell a school that their firm won’t be coming for OCI. Interestingly, she mentioned that most of the resistance these firm hiring coordinators will face will not be from the schools themselves, but from partners who are pissed that they’ll no longer be interviewing at their alma mater. Still, Long encouraged them by saying that partners will eventually be convinced that it doesn’t make sense to go to certain schools any more.

The talk ended with the discussion about law schools, but I wanted to end this post on the panel’s more empowering discussion about deferred associates. Kimball and Long used a metaphor of a snake eating a bunny to describe how firms are having trouble digesting all the associates they’ve deferred. Obviously, most of the discussion focused on ways firms were trying to deal with entry classes bloated with deferred hires. None of the options were very appealing.

But then Long asked a question I hadn’t heard before:

How many of you have dealt with a situation where a deferred associate didn’t want to come back to the firm?

To my surprise, some audience members raised their hands. Not many, but a few. And then Long clicked over to the next slide:

Some of the best will never return.

The slide led Kimball and Long into the doughnut-hole discussion. But that slide looked like a bright, chirping canary in a coal mine.

Firms are and always will be concerned about getting “the best” talent. Things like high starting salaries aren’t there to pull top talent away from other firms, and firms certainly aren’t paying those salaries out of kindness and understanding to students carrying a lot of debt. No, firms pay that kind of money to keep “the best” from jumping ship to i-banking or high-level government work or any number of professions that talented people can make a living at. If, after being deferred for a year, some of the best are finding other options — well, that’s something firms will be concerned about.

And that could mean we truly are in the “aftermath” of the Great Recession.

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