There seems to be no end to bad financial news for law firms: Demand is flat, revenue growth is expected to fall short of last year's small gains, billable hours and realization rates are down and costs are rising.
And judging from law firms' recruitment for their 2013 summer class, no one is expecting the landscape to change dramatically anytime soon. An informal survey of 11 Am Law 200 firms conducted by The Recorder found that the appetite for summer associates has shrunk by nearly 40 percent from 2007. For law students, the good news is that recruitment seems to have stabilized. The good news for firms is that with smaller class sizes, it's much easier than in the boom days to get the pick of the litter.
Most of the firms will welcome Bay Area summer classes next year of about the same size as in 2012.
But several firms did diverge from last year's precedent. An above-average acceptance rate yielded an abnormally large 2012 class of 43 summer associates in the region for Wilson Sonsini Goodrich & Rosati, law school recruiting manager Stacy Trzesniewski said. The firm's Bay Area class for the coming summer will be about half that size.
Jones Day, meanwhile, is doubling down. To power its plans for expansion in California, the firm hired 44 percent more summer associates than last year in the Bay Area, said Robert Mittelstaedt, partner in charge of the San Francisco office. As many of its competitors are retrenching, the firm sees a chance to claim a greater share of the talent pool, Mittelstaedt said.
"We think we will grow in the future as much as we have in the past, and we want to be ready for it," he said. "We have a hard time passing up good talent."
Yet even a firm set on growth like Jones Day is hiring far fewer summer associates than it did before the recession. And most firms have slashed their recruitment further. Among the 11 firms surveyed, summer hiring has fallen by 38 percent on average from 2007 to 2013, which is consistent with nationwide statistics.
And for some firms, the decline was even steeper. Pillsbury Winthrop Shaw Pittman will have seven associates in its Bay Area offices in 2013, less than a third of the 25 it recruited for summer 2007. Orrick, Herrington & Sutcliffe will have 17 summer associates in the region in 2013, a 59 percent decline from the 41 it brought on board for 2007.
Anemic recruiting was among the factors that led the National Association for Law Placement to deem 2011 the worst entry-level job market in more than 30 years. Although it is too soon to produce statistics for fall 2012, NALP executive director James Leipold said he expects the volume of hiring done by firms to be "flat to a slight uptick" compared to last year.
Powered by demand for legal services in Silicon Valley, the Bay Area appears to be marginally outperforming other markets, Leipold noted. Career development officials at UC-Hastings, UC-Berkeley, UC-Davis and Santa Clara University said they saw a slight uptick in the number of employers who came to campus for formal recruitment.