This is Elie Mystal, coming to you live from Austin, Texas, and the 2012 conference of the National Association of Law Placement. It’s my favorite annual conference, because every year, NALP just gets all the law school career services officers and all the law firm recruiters in a room, and tells them all the trends in legal hiring. We’re not talking about anecdotal evidence or law firm spin. It’s the one time each year we get to look at some hard numbers.
And in case you live under a rock, let me tell that every year since the recession, the numbers get more and more terrible. Looking at some of these statistics is as close as you can come to physically witnessing a dream die a horrible, mangled death.
This year, the numbers are worse than ever! And that’s the good news. NALP’s Executive Director, Jim Leipold, thinks that we’ve probably “hit the bottom” in terms of new associate hiring, with the class of 2011 suffering the absolute nadir of this process. While he doesn’t know if things will get significantly better any time soon, he figures they pretty much can’t get any worse.
Does anybody want to hear the bad news?
Leipold’s talk was titled “The End of an Era,” and it was sobering for any person concerned with legal hiring trends. One of his main points was that for a long time, the demand for “sophisticated legal services” outstripped the supply of qualified “business lawyers.” That fueled the Biglaw boom years that most of us still remember.
Sadly, now the supply of business lawyers is much greater than the demand for their services. It’s flipped. But it didn’t flip in 2010, or even 2008. Leipold argues that it happened in 2004, and the market is now just feeling the effects of that flip.
The men in the audience will understand this perfectly. It’s like being hit in the nuts, and for a few horrible seconds, you know that you are going to hurt, but you don’t know how much — and then the pain hits, and you’re doubled over on the floor, and you can’t even cry out because you are in so much pain. (For a more female friendly analogy: imagine realizing you married a guy who can only explain things through penis analogies or something that happened in Star Wars.)
How bad is the pain? NALP numbers say that only 85 percent of 2011 graduates were employed nine months after graduation. That’s the lowest figure in over a decade, and it includes the roughly three to four percent of graduates who are employed by their law schools. If you take that group out of the mix, we’re looking at hiring rates as low as they were during the recession in the early 90s.
And Leipold thinks that at least some of these changes are going to be permanent. As he put it: “The days of the large summer classes are over. And they’re not coming back.”
Because while demand for traditional partner-track associates is going to remain low, demand for paralegals and that kind of work is skyrocketing. All of the growth is in LPOs and contract attorneys and those types of jobs. Of course, you can use a J.D. to become a paralegal. But consider this fun slide about J.D. holders:
* In 2010, 44,245 ABA law school graduates took on $3.6 billion in student loans (up from $3.1 billion in 2008)
* In 2010, average debt for graduates who borrowed money to attend law school was $97,310…
* Call of 2020 projected to borrow $7 billion in student loans…
I’m no mathlete, but I don’t even need an abacus to tell you that earning a paralegal’s salary after making an investment in an expensive J.D. is foolish.
But back to the good news. The class of 2011 probably got it the worst. Leipold reminded people that when those guys were 2Ls, many firms straight-out canceled their summer programs, so those kids had very little chance of even getting a foot in the door.
And in terms of 3L hiring, Leipold said, “There is no 3L hiring market.” That’s something I’m sure you don’t have to tell the class of 2012, either.
But, while Leipold doesn’t expect there to be a great uptick for the class of 2012 (and he allows for the possibility that the class of 2012 could do marginally worse than the class of 2011), he thinks this is probably the worst of it. He doesn’t know when it’ll get better, but he put it this way: “I see no reason for it to continue on a downward spiral.”
Essentially, firms have adjusted to the new, reduced demand for their services. They’re not trying to shed weight anymore. And that means hiring should at least stabilize, instead of continuing to get worse.
So, that’s comforting, right? Once you’re at the bottom, the only way to go is up.
Just don’t tell that to the class of 2011.