Summer associate ranks look thinner for the upcoming season as many of the nation's law firms have pulled back from the record-breaking hiring of 2007.
A sampling of summer associate programs at several top firms shows a decrease in the number of students that they plan for this year. With last year's summer associate tallies representing all-time highs at some of those firms, they appeared more guarded at recruiting time last fall.
And as the economy has taken a dramatic downturn since on-campus interviews that began in August 2007, some law firms could find a mismatch in the supply of summer associates and their demands for full-time starters.
"Doing good work and behaving appropriately will be more important than ever," said Bruce Elvin, associate dean at Duke Law School and director of career services. On-campus recruiting remained robust last fall at Duke, he said, but the recent economic upset has created some jitters among would-be associates. "Over the next few weeks, we'll get a better sense of the signals," he said.
A 'CHALLENGING PLACE'
For the upcoming summer, Skadden, Arps, Slate, Meagher & Flom is expecting 300 law students, down from 321 in 2007. The number of its summer associates in 2007 soared above those in 2006, when the law firm brought aboard 219 summer associates.
Latham & Watkins also has reduced the number of associates it is expecting. This year, it plans to welcome 264 law students, compared with 284 in 2007. In 2006, the firm hired 276 law students for its summer slots.
Sidley Austin also is preparing for fewer summer associates this year. In 2007 it had 232, compared with 217 this year. Jones Day, which brought on 262 summer associates last year, expects 248 this season. In addition, Thelen Reid Brown Raysman & Steiner recently decided to trim its summer associate program from 11 to eight weeks and to delay the start date for first-year associates from September to January.
Kirkland & Ellis, which hired 229 summer associates in 2007, is planning on 190 this year.
"As we were in the process of putting together the summer associate class, we were cognizant that the economic conditions could be a little different this year, that the economy at large might be in a challenging place," said Jay Lefkowitz a partner at Chicago-based Kirkland & Ellis and a member of its management committee.
Although the size of summer associate classes partly depends on the success of a law firm's recruiting efforts and the supply of qualified candidates, law firms are starting to moderate their hiring, said James Cotterman, a consultant with Altman Weil Inc.
"It will be a conservative hiring cycle," said Cotterman, in an e-mail message. He noted that the starting salary at many big law firms is $160,000. "It is going to be hard to sustain if the finance markets do not improve," he said.
Summer associate hiring at least at some top firms may have declined, but law firms in general appear to be casting a wider net for the summer associates they bring on.
According to NALP, formerly the National Association for Law Placement, of the 120 law schools that provided on-campus interviewing information, 56 percent reported an increase of 5 percent or more in the number of employers participating in the process during fall 2007.
The uptick in the number of schools visited likely was due to more midmarket firms participating in on-campus recruiting, said Joel Henning, a Hildebrandt International consultant.
"Had recruiting season been more recent, when the risks to the economy and the slowdown in financing for the deals were more evident, you might not have seen the throngs on campus," he said.
This year's more conservative staffing for the summer at some of the big firms is in contrast to the industry's hiring last year. The average size of summer associate programs in 2007 "reached a level not seen since the late 1990s," NALP reported. Among the 400 employers responding, the average size of summer programs was 13 students.
At the same time, the percentage of summer associates receiving offers for full-time employment was at a record level. Some 92.8 percent of summer associates in 2007 received offers for permanent jobs at their firms, compared with 90.8 percent in 2006, NALP found.
But the economic picture has shifted considerably since last summer and since recruiting season for this summer as well. On March 18, U.S. Treasury Secretary Henry Paulson declared the U.S. economy in a "sharp decline." The announcement followed the rapid-fire move to sell near-defunct investment bank Bear Stearns to JPMorgan Chase & Co.
Just four months earlier, the economy for the third quarter of 2007 was expanding as gross domestic product surged by 3.9 percent, the fastest growth since first quarter of 2006.
"Nobody knows what the economy will mean to law firms," Henning said. For those firms needing to trim costs, the simple move is to "cut at the bottom," he said, by getting rid of existing associates or restricting the number of job offers. But sending unproductive partners packing, though a more complicated move, is a better strategy, he said.
"You get bigger savings," he said.
Even as some law firms are scaling back this summer, others are ushering in more associates.
DLA Piper, for example, plans for 129 associates this season, compared with 109 in 2007. The law firm grew by 290 attorneys in 2007, to 3,623 lawyers total.
Morrison & Foerster also is expecting a sizable increase. It hired 108 associates last summer, but has plans for 144 this summer. Part of the 33 percent escalation is due to a higher number of law students accepting offers than the firm had anticipated, said Keith Wetmore, chairman of the law firm.
Wetmore said that the firm has not felt the impact of fallout in capital markets and structured finance work. He also expects to keep the rate of offers to summer associates intact.
Still, the number of newcomers will take some adjustment, he said.
"There's always a challenge to have that big of an upswing."
