Higher Pay For Fewer Summer Associates -- But Layoffs May Be Looming
Don't let those cushy paychecks distract you from the underlying news here...
Biglaw summer associate classes have been shrinking, but at some firms, paychecks have grown larger than ever before. At the nearly 100 firms that participated in this year’s summer associates survey conducted by the American Lawyer, summer hiring decreased by an average of 2.02 percent. On the flip side of the coin, law students who managed to be hired for a summer associateship earned an average salary of $3,285 per week, up 11.36 percent from last year.
As usual, firms located in New York City took the lead in terms of the most summer hires (2,175), followed by Chicago (311), Los Angeles (299), and Boston (222). Which firms had the largest increases and decreases in the sizes of their summer classes? Cadwalader had the largest decrease in summer associates on a percentage basis, with 48.9 percent fewer summers (dropping from 47 hires in 2016 to 24 hires in 2017), while Paul Hastings had the largest absolute decrease in summers (dropping from 132 in 2016 to 84 in 2017). Cadwalader said the decrease in hiring was intentional, to ensure that the firm “keep[s] quality up.” Paul Hastings, on the other hand, said 2016 was an “outlier” year, and that the firm’s summer classes tend to be “a bit smaller.”
Ogletree Deakins and Cleary Gottlieb saw the largest percentage increases in summer hires, with Ogletree hiring 83.3 percent more summers in 2017 than the year prior (though the class size only increased from 12 to 22), while Cleary had the largest increase in absolute summers, with 151 law students joining the firm, compared to the 97 the firm hired last year.
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Now, for the moment you’ve been waiting for, the firms with the highest and lowest pay. McKenna Moore of the Am Law Daily elaborates:
Four firms tied for the highest summer associate pay, $3,750 per week: Fried, Frank, Harris, Shriver & Jacobson; Dechert; Kramer Levin Naftalis & Frankel; and Cooley. Tennessee-based Baker, Donelson, Bearman, Caldwell & Berkowitz reported the lowest salary in the survey: $1,500 per week.
Don’t let those cushy paychecks distract you from the underlying news here: there are fewer summer associates for a reason.
According to Eric Seeger of Altman Weil, with clients sending less work to outside counsel, there is decreased demand across Biglaw. “In firms where partners are having a hard time keeping themselves busy, they have less work to throw to associates,” he said.
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The bad news doesn’t end there. Survey respondents also said they expected to welcome fewer first-year associates to their firms in the fall, with average class sizes dropping from 40.4 to 38.6. Enjoy those paychecks while you can, summers, because 46 percent of Biglaw firms expect to have the same number of associates or fewer over the next five years.
Are layoffs coming to Biglaw in the future? The writing may already be on the wall, and it doesn’t seem to bode well for associates.
This Year, Fewer but Better-Paid Summer Associates [Am Law Daily]
Staci Zaretsky has been an editor at Above the Law since 2011. She’d love to hear from you, so please feel free to email her with any tips, questions, or comments. You can follow her on Twitter or connect with her on LinkedIn.
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