New Jersey law firms suspended or scaled back their summer associate programs for 2010, concerned about whether they'll have enough work to keep trainees busy and about the prospects for extending permanent offers in recessionary times.
Of a group of 20 firms surveyed, 10 reduced their summer programs and six eliminated them, at least at their New Jersey offices.
All told, there were 90 summer hires at the surveyed firms, down from 118 last year, and the average weekly salary for 2L associates dropped 2.1 percent, to $2,266 from $2,314.
There were no summer hires at McCarter & English in Newark; Greenbaum, Rowe, Smith & Davis and Wilentz, Goldman & Spitzer, both in Woodbridge; and Wolff & Samson, in West Orange. The same was true for the New Jersey operations of two out-of-state-based firms, Ballard Spahr Andrews & Ingersoll in Voorhees and Reed Smith in Princeton.
Stephen Barcan, administrative partner at Wilentz Goldman, says the firm suspended its program due to "lack of certainty of being able to place people, given the economy and lower hiring needs."
Despite the bad times, other firms are forging ahead with programs -- and large ones at that. Lowenstein Sandler in Roseland has taken on 18 summer associates, the same number as in 2009.
"We are certainly impacted by the recession, but we are actively planning on and working on the recovery rather than focusing on the rear view mirror," says managing partner Gary Wingens.
The firm, which laid off 21 lawyers in early 2009, can't expect to rely solely on lateral recruitment when the economy picks up and demand for services rises, since that's when qualified laterals will be most in demand, Wingens says.
Sills, Cummis & Gross in Newark expanded its summer class this year but reduced the salaries. It hired eight students, up from six in 2009, and dropped 2L salaries to $2,000 from $2,500 in 2009. Managing partner R. Max Crane says the recession offered the firm an opportunity to correct salaries that "had gotten a little out of whack," but it kept the summer program in gear because it sees the downturn in legal services as temporary. "The firms that don't panic are the winners," Crane says.
For some firms, though, the recession has been an opportunity for reflection on whether traditional summer programs are serving their needs.
At McCarter, which had nine summer associates in 2009, the personnel committee is reviewing all aspects of its hiring and training of associates. The model of recruitment that McCarter and other law firms "blindly follow" is unlike anything used in other industries, says managing partner Eric Wiechmann. He says recruiting students in the middle of law school for post-graduation careers, then finding spots for them in the firm, "doesn't necessarily make sense."
Putting summer hires on hold was prompted by the greater efficiency demanded of the firm due to inability to raise rates amid the recession, Wiechmann says, adding that the firm wanted to avoid hiring associates who would be laid off in a year or two.
McCarter will decide in the fall whether to have a summer associate program in 2011. Meanwhile, resources are being redirected toward training, mentoring and development of existing attorneys. "I think it's more, let's focus on who we have," Wiechmman says.
Greenbaum Rowe, which had four summer associates in 2009, suspended its program last September, when on-campus recruitment took place, perturbed at the idea of bringing on too many hands that would be idle. "It's a function of having the work to give to people," says co-managing partner W. Raymond Felton.
Since then, however, the outlook has become brighter. "We are seeing some signs of improvement in the economy and the demand for legal services," says Felton, adding that a decision on resuming the summer associate program will be made later this year.
One problem Felton sees is that on-campus recruitment has gradually moved to August from the fall, which has made for a longer lead time. In September 2008, when Lehman Brothers' bankruptcy sent the stock market plummeting, Greenbaum Rowe had already committed to the size of its 2009 summer program, he says. "In good times or bad, it's always difficult to project what your needs are going to be," Felton says.
Day Pitney of Florham Park, which cut its summer associate class from seven in 2009 to four this year, undertook a dramatic overhaul of the summer regimen. The new program -- dubbed an apprenticeship -- is comprised of two, four-week assignments to specific departments or practice groups. Previously, summer associates had little exposure to transactional work, but this year's apprentices will be immersed in it for half the time.
The Day Pitney summer class is also schooled in law firm finances, client development and networking skills. More traditional summer fare -- social and recreational events -- have been scaled back.
Summer associate hiring data from the National Association for Law Placement indicate that 2010 saw a decline in hiring nationwide and that firms in northern New Jersey were more cautious about hiring than the nation as a whole.
When law firms nationwide extended a second interview to a candidate for a 2010 summer associate job, the candidate was offered a job 36 percent of the time, compared with 47 percent for 2009 positions, NALP says. Firms in northern New Jersey offered 2010 summer associate positions to only 16 percent of those called back for a second interview, compared with 32 percent for those called back a second time for jobs in 2009.
And 43 percent of candidates nationwide who were offered a 2010 summer associate position accepted the job, compared with 33 percent in 2009, NALP says. Locally, candidates were even less selective than the nation as a whole. Candidates for jobs at northern New Jersey firms who were offered 2010 summer associate positions accepted 60 percent of the time, compared with 40 percent in 2009.