Bleak times in Big Law

Graduate School Law School
1

<p>The American Lawyer has published a pretty bleak article about the state of the job market at Big Law firms this year:
Law.com</a> - The Coming Law Firm Hiring Crisis</p>

<p>Here are some excerpts:
WHAT TO LOOK FOR IN THE LABOR MARKET RESET</p>

<p>Lower Starting Salaries</p>

<p>Firms are concluding that they are paying too much to their first-years. Many, if not all, are still struggling with the last round of across-the-board salary increases given to associates two years ago. Bumping starting salaries up to $160,000 in major money centers arguably made sense when profits were booming and firms feared that they were losing their best talent to the hedge funds of Greenwich. Those days are over and yet the 160K bogie remains as inviolate as though it were handed down at Sinai. If the market -- and not weird lemming-style management -- drove the salaries up, then presumably the market should drive them down. How far? Back to $130,000, where they lodged at the peak of the tech boom? Back to $100,000, which one managing partner refers to as a "life-boat offer" -- if you take it, we guarantee not to throw you over the side for several years? …</p>

<p>Wage Cuts</p>

<p>Several firms have announced wage freezes: no automatic raises for serving another year …
Delayed and Staggered Starts</p>

<p>Like snow geese that cross the 44th parallel every fall, new associates enter law firms each September as though they were obeying a biological imperative. If there is little or no work waiting for them this fall, that seems a mite pointless. Instead, look for firms to behave as their clients do, delaying starts of new employees until there is some demand for their services. And look for them to behave unlike their clients -- offering stipends for extended vacations, pro bono service and advanced course work, anything to build loyalty -- and keep them out of the office.</p>

<p>Sharply Reduced Summer Classes </p>

<p>I doubt that any of the major firms will stop recruiting first-year associates. However, I expect, given the glut of junior associates, that they will reduce the number of new ones they bring on for this summer... </p>

<p>More Layoffs</p>

<p>Next time it will be partners…</p>

2

<p>Even government will be cutting back.</p>

<p>Except for foreclosures and bankruptcies, this economy stinks for just about everyone.</p>

3

<p>This is where it pays to either...</p>

<ol>
<li> Be really good.</li>
<li> Have a diversified/marketable background (ie. engineering and science) and not study something like the classics.</li>
</ol>

<p>It always seemed to me that if you look to the left and look to the right, and you look like everyone else then you won't fare better than them in an unstable economy.</p>

4

<p>Being really good may not help. Unfortunately, as you get increasingly senior at most big firms, you get increasingly specialized. If the area in which you work isn't doing well, you may get laid off, even if you are very good. Mid-level associates and senior assoicates may get laid off simply because a firm doesn't see any openings for partners a year or two down the road.</p>

5

<p>
[quote]
Bumping starting salaries up to $160,000 in major money centers arguably made sense when profits were booming and firms feared that they were losing their best talent to the hedge funds of Greenwich. Those days are over and yet the 160K bogie remains as inviolate as though it were handed down at Sinai. If the market -- and not weird lemming-style management -- drove the salaries up, then presumably the market should drive them down. How far? Back to $130,000, where they lodged at the peak of the tech boom? Back to $100,000, which one managing partner refers to as a "life-boat offer" -- if you take it, we guarantee not to throw you over the side for several years? …

[/quote]
</p>

<p>Frankly, I think this had to happen. Seriously, $160k is a ludicrous salary to pay for somebody who is just 25 or 26 years old and with just a law degree. </p>

<p>I know, I know, some people will present the counterarguments, so let me deal with them forthwith:</p>

<ul>
<li>Only the very best law school graduates - namely those who are good enough to get into BIGLAW - will make those kinds of starting salaries.</li>
</ul>

<p>My response - so? Cue the world's smallest violin. The very best engineers - even the ones with PhD's - will probably never be able to make that kind of money in their entire careers, much less when they're in their mid 20's. And engineering is one of the most marketable disciplines in the country, to say nothing about the liberal arts disciplines.</p>

<p>*You earn those BIGLAW salaries only in the major cities where the cost of living is high.</p>

<p>Again, so? Re-cue the world's smallest violin. The average weekly wage in Manhattan in 2008 was $2805. Hence, by making $160 a year to start, you're already - right out of law school - already making more than the average person working in Manhattan. And Manhattan is not only the borough of New York with the highest average wage, but is the county (New York County, which is Manhattan) that pays the highest average wage of any large county (75k+ jobs) in the entire country. </p>

<p>AVERAGE</a> WEEKLY WAGES IN NEW YORK CITY</p>

<p>Furthermore, nowhere is it written that you have to live in Manhattan just because you work there. You can live in Brooklyn. You can live in Queens. You can even live in - gasp - New Jersey. Any of these locations are going to be significantly cheaper than is Manhattan. Granted, you'll have to commute. But, hey, most people in the country have to commute. Just because you have a law degree doesn't mean that you're automatically exempt from commuting. </p>

<p>*You have to enter significant debt to become a lawyer.</p>

<p>Ok, sure, that's an issue. But how much of one, really? Even subtracting the costs of debt repayment from your income, the fact remains that you'll still be living financially better than the vast majority of Americans, especially those who are of the same age as you. </p>

<p>The one objection that I would agree is quite serious is that there are some people who take on giant debts to enter lower tier law schools only to get BIGLAW job offers. Solving that comes down to a matter of personal education: people shouldn't attend those lower tier law schools, or at least, shouldn't assume large debts to do so. They should instead be pursuing merit scholarships or considering part-time programs, which are offered by some top-ranked law schools such as Georgetown, George Washington, Fordham, or George Mason. That way, they can continue to work while pursuing law degrees, hence minimizing the total debt they will accumulate. The option is even more appealing if you can attend a part-time public law school as you will probably be able to move to the state in question and hence qualify for the state residency tuition subsidy, perhaps after a wait period (i.e. 12 months). George Mason's Law School, for example, is in Northern Virginia, right near the state border. Hence, as long as you are actually domiciled in Virginia, you can still work in Washington DC (where many people in N Virginia actually work) while attending GMU part-time and qualifying for state tuition.</p>

6

<p>
[quote]
Several firms have announced wage freezes: no automatic raises for serving another year …
Delayed and Staggered Starts

[/quote]
</p>

<p>I know two 2009 grads who had offers from firms where they summered. One has a start date in Nov. 2009, 6 months after graduation; another one has an offer with no start date yet. Both are NY BIGLAW firms.</p>

7

<p>Sakky,</p>

<p>You'll get no argument from me, or from any of the other in-house attorneys I know, that $160K is a ludicrous salary to pay a 25 or 26-year-old freshly minted J.D.</p>

8

<p>Sakky always hits the nail right on the head.</p>

<p>As I have said before, if everyone around you has the same qualifications and does comparable work, you're never really safe from being laid off which seems to be the case at the BigLaw firms where everyone has a JD.</p>

<p>While I want a JD sometime after I finish my PharmD, I would like to pursue an engineering or a science before. </p>

<p>I don't plan on going to any school other than public universities because a lot of private schools don't offer the same incentives/tuition waiver that I would be eligible for at public universities.</p>

<p>I don't see a point in spending 3 years full time to attend a top 10 law school and incurring at least $150k of debt just to get into a BigLaw firm. I'd rather attend a 4 year part time JD program that would cost me $0.</p>

<p>I think that when you have a PharmD, MS ChemE, and JD, it doesn't matter which school you come from. You have enough tools at your disposal to make the same if not more than what someone who went to school full time for 3 years incurring $150k of debt just to have a brand name on their resume.</p>

9

<p>seems like harsh(er) times to be entering the job market right now.</p>

<p>i'm just glad i'm a couple years away.</p>

10

<p>Im glad I still got several yrs for law school and then job market. hopefully the economics will become better then.</p>

11

<p>Hopefully the economy recovers by the time I finish college. I have to make the decision between going to law school in Canada or the US. And given the nature of the market for lawyers, once you make the decision there's no going back. </p>

<p>Though given the current market it looks like Toronto is in my future. They seem to be faring pretty well-their consumption figures are up and their banks didn't overleverage way beyond their means and spew out toxic toilet paper all over the world.</p>

<p>And sakky-I can imagine doing an MBA part time because there's nothing substantive you have to learn but extrapolating from my experience in undergrad law classes, I can't possibly imagine doing a part time JD. It's one of those degrees IMO (probably along with an MD) that MUST be done full time (hence the relatively small market of part time JD programs).</p>

12

<p>
[quote]
I can't possibly imagine doing a part time JD. It's one of those degrees IMO (probably along with an MD) that MUST be done full time (hence the relatively small market of part time JD programs).

[/quote]
</p>

<p>Oh, I don't know about that. Certainly seems to me that getting a law degree part-time from Georgetown is better than getting a full-time law degree at the vast majority of law schools out there.</p>

13

<p>Given the choice between full time Georgetown and part time Georgetown I'd pick the full time program every time though. We can't compare Gtown part time and U of Alabama, that's apples and oranges.</p>

<p>Which is to say if I can't get into one of the top15, then I'm giving up law school. Below top20, my job prospects may actually get worse.</p>

14

<p>
[quote]

And sakky-I can imagine doing an MBA part time because there's nothing substantive you have to learn but extrapolating from my experience in undergrad law classes, I can't possibly imagine doing a part time JD. It's one of those degrees IMO (probably along with an MD) that MUST be done full time (hence the relatively small market of part time JD programs).

[/quote]

It couldn't possibly imagine doing a full-time JD. You're taking on $150k in debt and have no income for 3 years.
When I am ready to apply to law school, I'd prefer one that's free (public university + National Guard tuition waiver) and part time (so I can work 36hours/week for $100k/year + benefits).
As I said before, if you come from a soft undergrad degree, it's in your best interest to attend the best possibly law school you can get into because you're going to rely on the name of your law school for employment.
As for me, if I worked the same hours as an associate lawyer (72hours/week for example), I'd make about $200k/year as a pharmacist. To me, having a JD could only improve that and give me more opportunities but that's the baseline that I am starting with.</p>

15

<p>Like I said, below top 20 I'm giving up law school (or going to Canada). If I'm going to spend $150k of a bank's money (or my parent's money, either way) for law school, I want a return on investment. And $60k/year as an ADA or as a real estate lawyer doing house closings isn't going to cut it. I could make that fresh out of undergrad.</p>

16

<p>
[quote]
Given the choice between full time Georgetown and part time Georgetown I'd pick the full time program every time though.

[/quote]
</p>

<p>I'm not so sure. Again, the part-time program will vastly reduce your total debt load as presumably you'll be working the whole way through as opposed to giving up three years of income. Furthermore, you may be able to find an employer who will provide tuition subsidies as part of your benefits package, which will further reduce your arrears. Granted, you will need to take another year to graduate. But if done right, you may well be able to graduate with very little debt, perhaps none at all, and that may well be worthwhile.</p>

17

<p>
[quote]
And $60k/year as an ADA or as a real estate lawyer doing house closings isn't going to cut it. I could make that fresh out of undergrad.

[/quote]
</p>

<p>If that 's really true, then good for you. You're clearly better off than the average person, for the fact is, most people can only dream of making $60k right out of undergrad. The average liberal arts graduate in 2008 made only $33k to start. Heck, even the average engineering graduate, across all engineering disciplines, made only $56k to start.</p>

<p>Best</a> entry-level salaries for new grads - CNN.com</p>

18

<p>The average NYU grad makes about $55k fresh out of school.</p>

19

<p>
[quote]

The average NYU grad makes about $55k fresh out of school.

[/quote]

I would hope so. NYU is ridiculously expensive to attend.</p>

<p>
[quote]

If I'm going to spend $150k of a bank's money (or my parent's money, either way) for law school, I want a return on investment.

[/quote]

If you want a return on investment, defined as [potential income per year]/[total money invested] you should join the National Guard.
They can make the denominator of that equation = 0 => ROI = infinite. I'm getting my PharmD for free right now and I plan to go to grad school for a MS ChemE and JD for free as well.</p>

<p>
[quote]

Again, the part-time program will vastly reduce your total debt load as presumably you'll be working the whole way through as opposed to giving up three years of income.

[/quote]

Sakky is right. Pick between these options:
a. 3 years full time + $0 income
b. 4 years part time + $100+k/year w/ benefits for 36hours/week</p>

20

<p>As for the National Guard-I value my life and limbs. I'm not going to risk my personal safety for an education. I want to go to law school, but not that desperately. Like I've said before, you can't go to law school if you're dead.</p>

<p>And your false choice assumes that I can actually earn $100k out of undergrad working 36 hours a week, especially with a BA in econ. It's more like 4 years part time+$50k/year and benefits for 50-60 hours a week. Presumably I'd come out ahead, but at what cost? Incredible stress beyond what any reasonable human should endure (holding down a full time job+law school)? Law school is an incredibly time consuming degree and it's not something I'm willing to take on while holding down a full time job (esp. if I end up in a job like consulting that involves a lot of travel).</p>

<p>I'll probably get a better ROI in Canada where the cost of law school even for int'ls is ~$30k CAD/year. Bay Street firm pay varies between $100k and $140k a year, and I don't pay for health insurance, not to mention a cut in the cost of living and taxes.</p>

<p>In the long term, I'm better off doing a full time JD, getting much better grades, and getting a great law firm job rather than doing a part time JD while holding down a job and getting lesser grades (I have one rule-never bite off more than I can chew-it's worked pretty well for me so far). My JD won't be worth the paper it's written on if I had a 2.7 in law school.</p>