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Downturn Dims Prospects Even at Top Law Schools
By GERRY SHIH
This fall, law students are competing for half as many openings at big firms as they were last year in what is shaping up to be the most wrenching job search season in over 50 years.
For students now, the promise of the big law firm career — and its paychecks — is slipping through their fingers, forcing them to look at lesser firms in smaller markets as well as opportunities in government or with public interest groups, law school faculty and students say.
The frenzy has even pushed the nation’s top firms, a tradition-bound coterie, into discussing how to reform the recruitment process with an earnestness that would have been unthinkable just years ago.
Even if the economy is beginning to pick up, the legal profession has been pummeled over the last year, with some firms closing and survivors often asking associates to take leaves of absence.
How bad is it? Skadden, Arps, Slate, Meagher & Flom, the juggernaut of New York, has slashed its hiring by more than half. For the first time in 136 years, Morgan, Lewis & Bockius, a respected Philadelphia firm, has canceled its recruiting entirely. Global firms like DLA Piper and Orrick, Herrington & Sutcliffe have postponed recruiting for several months to see if the market improves.
At Yale, students accustomed to being wooed by Big Law’s glittering names — like Baker & McKenzie; Milbank, Tweed, Hadley, & McCloy; and White & Case — were stunned when those firms canceled interviews in New Haven this month.
New York University, Georgetown, Northwestern and other top universities confirm that interviews are down by a third to a half compared with a year ago, while lower-ranked schools are suffering more. What is more, when interviews finish in a few weeks, even fewer offers will be extended, said Howard L. Ellin, the chairman of global hiring at Skadden, Arps, because many firms are interviewing students for slots they may not fill.
After he lost his job as a television reporter two years ago, Derek Fanciullo considered law school, thinking it was a historically sure bet. He took out “a ferocious amount of debt,” he said — $210,000, to be exact — and enrolled last September in the School of Law at New York University.
“It was thought to be this green pasture of stability, a more comfortable life,” said Mr. Fanciullo, who had heard that 90 percent of N.Y.U. law graduates land jobs at firms, and counted on that to repay his loans. “It was almost written in stone that you’ll end up in a law firm, almost like a birthright.”
With the cost of law school skyrocketing over the years, the implicit arrangement between students and the most expensive and prestigious schools has only strengthened: the student takes on hefty debt to pay tuition, and the school issues the golden ticket to a job at a high-paying firm — if that’s what the student wants.
“Students came in with a certain sense of what the compact was going to be,” said Irene Dorzback, the assistant dean for career services at the New York University School of Law. But with the system crumbling in recent months, Ms. Dorzback said, “people are now accepting this notion of a lost year.”
The timing is worst for the class of 2011, the second-years now looking to get into firms, because of a unique logjam created last year. After the September financial crisis, firms chose to defer their new hires at the price of steeply cutting recruiting this year.
But students who miss the brief window of opportunity to land an offer this fall may struggle to break into firms once next year’s class rises. When Julia Figurelli, a second-year student at the University of Pennsylvania, decided to enter law school a year ago, she expected to find a lucrative law firm job in three years — if not collecting the $160,000-a-year associate salaries at one of the uppermost partnerships. By the time she obtains her J.D., she says, she will have around $200,000 in debt.
“Had I seen where the market was going, I would’ve gone to a lower-ranked but less expensive public school,” she said. “I’m questioning whether law school was the right choice at all.”
Once aiming to work in Philadelphia, Ms. Figurelli is now hunting for jobs in lower-paying markets, like Pittsburgh and Fort Lauderdale, Fla. “I’m looking anywhere my competition isn’t looking,” she added.
School officials are pushing students to look beyond the white-shoe firms, to delve deep into alumni networks and to start mass letter-writing campaigns to potential employers. Like Ms. Figurelli, many students say that for the first time, they are considering and seeking work with government and public-interest groups.
The Social Security Administration, for example, said applications for lawyer positions and clerkships had more than doubled this year, to 2,000, from 800. The public-interest job fair at N.Y.U. this year was “packed to the gills,” Mr. Fanciullo recalled, but whereas in past years students had seven or eight interviews, some of his classmates this year had zero. “There’s a humongous trickle-down effect,” he said. “When the big firms don’t hire, everyone looks to government. And when those get filled up, then what happens?”
It has been a bizarre new reality, especially for elite schools. At Harvard, officials have had to hawk résumés or tell students, quite simply, to buck up. (“Now is not the time for avoidance, denial or panic,” Mark Weber, the assistant dean of career services, wrote in a March memo to Harvard Law’s graduating class.)
With the system’s frailties exposed by the recession, said Mr. Ellin from Skadden, Arps, the time could be ripe for “massive overhaul.”
Discussions at industry roundtables and casual talk among officials at leading schools and firms suggest a consensus that interview dates should be pushed back to the spring of the second year, if not the third year. The recent problems have arisen, reform-minded critics say, because the legal industry essentially hires two full years ahead of when employees begin to work. And because young lawyers have to be advanced by lockstep every year, it is difficult to make recruiting changes that are responsive to shocks in business.
“There’s a long list of issues that need re-examining,” said Ralph Baxter, the chairman of Orrick. “The current economic circumstances have helped people see the economic inefficiencies we’ve been living with.”
Even lockstep, as sacred a pillar of Big Law as the billable hour, has been undermined by the hiring headaches of the last year, some argue. Orrick and another major firm, Howrey, have introduced innovative programs for associates based on apprenticeships or tiered systems that depart from the traditional “up or out” partner-track models. Some industry observers say their moves represent first steps that may ultimately give firms greater flexibility in hiring.
“The situation is so dramatic it has freed them up to make changes that they wouldn’t otherwise,” said James G. Leipold, the executive director of the Association for Legal Career Professionals. “We’re going through a period of a surprising amount of experimentation.”
Not that any of those changes will come into effect soon enough to help the class of 2011.
On a recent Friday afternoon, Mr. Fanciullo sat at home waiting anxiously for his first callback after four days of interviews. Firms customarily called within 48 hours, he explained.
“You almost bank on the big firms hiring you because they’re really the only ones who can help you pay your debt,” he said, his mind already skipping forward to a situation he didn’t choose to articulate. “Quite frankly it would be an absolute disaster. I don’t know what I’d do."