What do these four facts mean? For law firms, at least three things. First, in the short run, the war for talent will become more ferocious. Second, the cost of talent will only increase. And third, the need for firms to differentiate themselves will become apparent even to the hidebound.
This year’s famous hike to $160,000 in starting pay for first-year associates did not buy hiring firms anything in terms of separating themselves from their competition. The firms that can afford to pay more will pay more; but there is a price point that not all Am Law 200 firms will be willing to match. We’re confident that that number begins with a 2.
As costs rise, the price of a mistake only grows. The feverish but unsystematic, even casual, recruiting habits of firms seem painfully inadequate now. Firms will sharpen their techniques or start losing ground to others who have grown weary of viewing recruits through a glass darkly.
As we have argued before, firms are not all alike and do themselves and their potential associates little good by pretending otherwise. Firms need to define themselves and then make their distinctive qualities known to the job market.
A word for potential associates: Enjoy! The seller’s market will last until the next downturn-by which time most of you will be on to something else.