Law Schools

What Happened At The NALP Recruiting Summit?

Living life in a post-Guidelines world...

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Two weeks ago, for the second time in three weeks, I found myself back on the road for a business trip. While my previous venture outside of Nashville was to meet with legal employers in the Washington, DC market, this trip was a bit different. After an inexplicable two hour delay on the BNA tarmac — on the plus side, I can say that both Netflix’s Sex Education and the recent Robert Caro piece in The New Yorker are quite good — I arrived in New York City to attend the sixth annual National Association for Law Placement (NALP) Recruiting Summit, which brings together some the nation’s top law schools and legal employers for a day long discussion on an array of legal recruiting topics.

With those in the NALP orbit still reeling from the decision made one month prior to abandon the recruiting guidelines which had been in place for more than four decades, and with the Summit representing the first time the various NALP stakeholders would all be in the same room, one might have thought this would be an all-day discussion as to what will fill the vacuum, or more simply, what happens next. Well, you would be wrong.  While there would be a time to discuss the post-Guidelines world, the Summit stuck to its established practice of taking a broad look at the legal recruiting universe.

The opening session saw Citi’s David Altuna provide an overview of the state of the legal economy. In short, the financial situation for the law firms continues to improve, though with some significant caveats. From 2010 through 2017, law firm revenue increased 4.4 percent year over year, which is a respectable growth rate for any industry. However, demand for legal services — measured by Citi as the total number of hours logged by attorneys at law firms — grew only 1 percent per year during this same period. How did revenue growth vastly outpace demand growth? Billing rates increased during this same period by 3.9 percent year over year. If you cannot get consumers to buy more of your product, you can bolster your bottom line by charging them more for the same thing. Of course, the concern is that, theoretically, you eventually hit a limit on how much consumers are willing to pay. The good news is that over the first nine months of 2018, the aforementioned figures all increased. Firm revenue shot up by 6.3 percent, demand increased by 2.5 percent, and billing rates increased by 4.3 percent. On the flip side, firm expenses also increased in the first nine months of 2018 by 5.9 percent, compared to the 4.2 percent rate of increase from 2010-17, but that increase is still less than the increase in firm revenue and can be explained, at least in part, by the bump in associate salaries to $190,000.

That was the good news. Not surprisingly, there was also some bad financial news. Much like the American economy as a whole, the growth in the legal market is primarily happening at the top — both in an inter- and intrafirm manner. Despite the fact that the top quarter of the Am Law 200 saw the largest increase in billing rates from 2010-17, those same firms saw the highest increase in demand for their legal services. In fact, the entirety of the growth in demand was limited to this top 25 percent. Those firms saw a 3.7 percent growth in demand post-Great Recession while the rest of the AmLaw 200 saw a contraction of demand by 0.5 percent. For the top 50 AmLaw firms, it is as if the Great Recession never happened. For the other 150 firms, well… at least the bottom is no longer falling out. Interestingly, boutique firms are actually on stronger financial footing than Am Law 50-200. And within firms, nearly the entirety of this increased revenue is flowing to the partnership.

Wearing his best flak jacket, NALP Executive Director Jim Leipold took to the podium next and reviewed the results of the recently completed recruiting survey. After a small dip, entry-level legal recruiting has returned to its post-recession peak. While the total number of students securing legal jobs after graduation continues to fall, that is due to the fact that the total number of graduating law students are at record lows. However, the current crop of national 1Ls is larger than the cohort that just graduated so we should finally see an increase in graduating law students in 2021 under President Gillibrand. 

The class of 2017 saw 54.4 percent of graduates working in private practice, which is near the historical norm and a vast improvement from the dark days of the recession when the figure fell below 50 percent. 28.1 percent of these graduates entering private practice went into Biglaw, i.e., firms with over 500 attorneys. Reflecting what David Altuna had previously explained, some law firms are showing growth in their recruiting efforts, both in terms of the size of their summer associate classes and the number of schools they visit for recruiting purpose, while other firms are retracting in both areas.  

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One of the more interesting figures discussed is that for the just completed Fall 2018 Recruiting Cycle, 53 percent of callbacks resulted in offers and 35 percent of all extended offers were accepted. While those statistics are not remarkable on their face, what makes them worth mentioning is that both increased from a year before. An increase in either offer or yield rate is typical, but both increasingly simultaneously is unusual. In looking at post-graduation offers, 97 percent of 2018 summer associates received an offer and 88 percent accepted.  Both numbers are record highs, but while the former is only slightly above the peak, the 88 percent acceptance rate is significantly higher than the low to high-70s percent rate seen pre-recession. As Jim pointed out, this is likely due to a drop off in the 3L hiring market. Fewer students are willing to turn down a good job for the prospect of a landing a “better” position that is likely not going to materialize.  

Jim also reviewed the biennial student survey which included some interesting nuggets that confirmed my prior beliefs — students like employer swag, so keep cranking out those branded portable powerbanks. Perhaps the most interesting statistic of the entire presentation came during this section when those students surveyed said that 45 percent of all summer associate offers had been accepted by the end of August. For those of us in the legal recruiting world, this continual, for lack of a better phrase, calendar creep is not surprising, but to think that even ten years ago, callbacks routinely stretched into the September and October, this new timeline is remarkable.

The student survey also contained some fascinating narrative responses, including the following on OCI:

The entire OCI process was antiquated, stressful, and ultimately almost made me drop out of law school. I firmly consider it to be one of the lowest points of my life and wish that no other person has to suffer through it. The screener interviews are a complete joke that does very little in gleaning any substantive information about the firm. Every response is a stock answer that makes the interviewer look like nothing more than an automaton. In fact, there were multiple points where I wasn’t sure if I was actually being subjected to a Turing Test. Not only that, but I had numerous interviewers outright insult me. One called me a liar when I told him what practice area I was interested in, “You’re lying, you’re a liar, I don’t believe you.” Another mocked me for not being very good at hockey, “You were probably terrible . . . My son could skate circles around you.” My OCI experience was so negative that I rejected both offers from Vault 100 firms and decided to go into Public Interest where I might be treated with at least a semblance of respect. I hope the day comes soon where law students aren’t put up for auction in front of cruel people in nice suits.

I am not sure I have come across a more trenchant paragraph on the topic of OCI. If the author of this quote reads this column, know that you can reach out via email if you want to talk.

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The remaining presentations had some interesting portions. I wanted to roll my eyes when 17-year-old Josh Miller discussed Generation Z, especially after he mentioned he was born in December 2001, i.e., after September 11th, but I found many of his insights quite valuable. Apparently, by a two to one margin, members of Generation Z are more interested in a job with financial security than doing something they love, a marked shift from millenials and something that raises long-term questions for all of the public interest capacity that law schools have built up in recent years. Also, Instagram is the most popular social media platform for Generation Z because of the inherent competition for likes. So basically, the Black Mirror episode “Nosedive” is about five years away from being a documentary rather than dystopian fiction. In a separate presentation, Summit attendees got to see some of the interesting video tutorials being developed by the Career Services Office at the University of Virginia School of Law.

However, as I mentioned at the start of this column, while the whole Summit was not devoted to our post-Guidelines world, an hour had been blocked off for round table discussions on the topic. As you might imagine, I was READY to talk.

Unfortunately, the cathartic moment I was craving did not come to pass. Rather than an open, free for all discussion, each table of 8-10 participants had a conversation with a NALP board member who served as the institutional voice explaining the decision. While other participants might have had a different experience amongst their small group, I do not think many minds were changed at our table. Those who came in with objections to the changes, myself included, seemingly only had their opposition harden. In my mind, the effect that the post-Guidelines world will have on first-generation college grads, those who do not come from a family of attorneys, and those who attended non-“elite” undergraduate institutions will be more acute than I originally thought. I also now wish I had taken at least one course in Antitrust Law while at NYU.

But while I might have wished for a slightly different structure and focus to the day’s events, at the end of the day, I was glad that I attended the NALP Recruiting Summit and as with all my trips to New York City, very much in the mood for some dumplings and pizza — not necessarily at the same time, but also not inherently opposed to such a combination.

(The views of this column do not necessarily represent those of Vanderbilt University Law School.)

Nicholas Alexiou is the Director of LL.M. and Alumni Advising as well as the Associate Director of Career Services at Vanderbilt University Law School. He will, hopefully, respond to your emails at abovethelawcso@gmail.com.

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