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It was a good summer for the third-year student at American University’s Washington College of Law. She liked the attorneys at the D.C. firm, and they seemed to like her. She had done great work, they told her, and a place for her next year was a sure thing. Two weeks ago, the firm told her they couldn’t give her an offer. It was not her performance — they just didn’t have enough room. Such stories, says K. Jill Barr, WCL’s director of career services, “are much more common this year.” Law firms across the country are employing different strategies to deal with the dearth of legal work, but all the strategies involve employing fewer lawyers. Firms are rescinding job offers to associates; asking new hires to start six, even 15 months later; and firing second- and third-year associates. The bottom has been hit, say managing partners across the region. The market may not improve in coming months, but it’s unlikely to get much worse. Washington-based firms and offices are faring a bit better than many elsewhere in the country, especially Silicon Valley. And a glimmer of light can be found in the legal work stemming from the current litany of corporate fraud scandals. But that doesn’t mean local firms are immune to the economy’s persistent bearishness. Perhaps the most disconcerting development for many is the firing of low-level associates to make room for the fresh, and hopefully more productive, law school grads. Late last month, Shaw Pittman fired 11 associates, after laying off 19 in December. The incoming class of new associates this year is 25, with 20 in its D.C. area offices. Last fall, Cooley Godward fired 12 of its Reston associates as it prepared for the arrival of nine first-years. Those layoffs were part of a nationwide cut of 85 associates and special counsel. This technique of “trading up” has supporters in the world of law firm gurus. Ward Bower of Altman Weil Inc. notes that it’s a tried-and-true practice in the business world. “You’re getting rid of the C-level performers and looking for A- and B-level performers,” he says. No one enjoys the bloody business of firing in situ attorneys. An alternative that is only slightly less painful is withdrawing job offers before the new faces arrive. Dorsey & Whitney made the difficult decision to withdraw offers to six associates this year, says Richard Powers Jr., who took over as head of the D.C. office in August. And the recent class of summer associates will not receive offers for next fall “because of the business climate as we see it and because of our commitment to providing current associates a good quality of work.” Powers notes, however, that the firm is actively trying to increase its presence in Washington through strategic lateral hires. Other firms also have trimmed job offers to this year’s summer associates. Shaw Pittman, for one, did not extend offers to 10 of its 44 summer associates. Some firms had already decided to hire fewer associates this year. Cooley, for instance, cut its entering class by 50 percent, hiring only 41 new associates firmwide. Piper Rudnick has only six this year, down from 13 last year. At Dickstein Shapiro Morin & Oshinsky, 18 associates will start in the D.C. office this fall, seven fewer than last year. And the firm had nine fewer summer associates this year. But of the 18 eligible for jobs next fall, Dickstein extended offers to 17. Even Covington & Burling has tempered its hiring. It has 45 new associates starting this fall; last year there were 66. According to data compiled by the National Association of Law Placement, recruiting activity and job offers are down, while the job acceptance rate jumped to 73 percent from 66 percent last year. Although reports are grimmest from the West Coast firms, many Washington firms seem to be holding steady. Intellectual property specialty firm Finnnegan, Henderson, Farabow, Garrett & Dunner has 26 new associates joining its D.C. and Reston offices this fall, 31 firmwide — about the same as last year, according to managing partner Christopher Foley. And Foley says the firm likely will extend offers to the majority of the 27 law students who worked as summer associates this year. Hogan & Hartson dramatically increased hiring this year, bringing on 63 new associates, compared with 40 last year. Robert Duncan, the partner in charge of recruiting, attributes some of that to expansion in New York this year, but notes that the firm “is essentially still in a growth mode.” The firm likely will offer jobs to the majority of its 42 summer associates, he says. Numbers are also stable at Arent Fox Kintner Plotkin & Kahn, where 13 started work last week, one more than last year. The firm does have fewer lawyers now than it did several years ago, acknowledges managing partner Marc Fleischaker. The reason, he says, is that “we’ve been cautious about filling spots [left empty by attrition].” “Those of us who didn’t catch that [high-tech] wave as much as we might have wanted aren’t having quite the problems others are having,” he says. Howrey Simon Arnold & White, too, seems to be doing fine, in part because of the firm’s emphasis on litigation-a healthy practice in economic downturns. The firm takes in about 20 new associates a year. This year it’s 17 because three candidates took clerkships. Next year, says hiring chair Richard Ripley, they intend to add 20. Arnold & Porter has 61 new associates this fall, about the same as last year, says managing partner James Sandman. The corporate fraud scandals at Enron, Tyco, WorldCom, and others may bring a modicum of job security to a shaky legal marketplace. Local firms have seen an uptick in clients who want to understand measures by Congress and the Securities and Exchange Commission to increase corporate governance rules and oversight, says Fleischaker. Enron came too late to help this year’s crop of laid-off associates. But third-year law students and first-year associates can breathe a little easier knowing that there is work to be done: regulatory compliance, securities litigation, and white collar criminal defense. Serious work for serious times. They’re not initial public offerings, but it’s work. And it’s better than pink slips.

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