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Think pancake. Think flat as a pancake. Then you’ll have an idea of what the trend-line is for associate hiring at large Texas firms this year. The numbers of new associates reporting for work this fall in Texas changed little from the previous year, according to numbers collected from 22 of the 25 largest firms based in Texas or with large Texas operations. With a couple of exceptions, offer rates to the second-year law students who clerked at the firms this past summer are pretty much the same as in the fall of 2002. And base salaries paid to the first-year associates also are unchanged from 2002 at the majority of the 22 large firms. Taken as a whole, those statistics suggest firms are taking a wait-and-see attitude toward staffing as the nation’s economy mounts a slow recovery. “That’s the sign of the times right now. People are not, just not committed just yet to beefing up,” says William C. Cobb, a firm consultant in Houston. Cobb says firms, after struggling through tough times in the early 2000s, are having their lawyers work overtime to take care of business, and may be using temporary or contract lawyers to cover the workload. He says firms will expand again “after things are moving solidly.” But, he says, most have continued hiring new associates so they don’t alienate the law schools where they recruit summer clerks. This fall, 428 new associates are starting jobs in Texas at 22 of the top 25 firms on Texas Lawyer‘s “The 100 Largest Firms in Texas” chart. The total includes first-year associates who graduated from law school in 2003 and prior-year graduates who served judicial clerkships for a year or two before their firm assignments. While an apples-to-apples comparison is impossible, since the numbers collected by Texas Lawyer from the firms for 2002 excluded judicial clerks, it’s interesting to note that 393 new associates reported to work at 21 firms in Texas a year ago. A clear-cut comparison is possible for the offers large Texas firms are extending to the law students who clerked at the firms this past summer. Offer rates were up at 12 of the firms and down at eight of them. (The 2002 offer rates for San Antonio-based Cox & Smith and Beirne, Maynard & Parsons of Houston were not available for comparison.) The rates ranged from 100 percent at Jenkens & Gilchrist of Dallas and at Beirne, Maynard to 37.5 percent at Clark, Thomas & Winters of Austin. The average offer rate for the 22 firms was 76 percent, compared to 67.4 percent for 21 firms in 2002. That means that three of four law students who clerked in Texas at the 22 large Texas firms received an offer for a job for the fall of 2004. [See " Offers to Summer Associates at Large Texas Firms"] That offer rate is a reasonable predictor for how well a firm is doing or at least expects to be doing by the fall of 2004. The size of the summer clerk classes vary. In fact, according to the information collected, 22 firms with large operations in Texas had 709 clerks working in Texas during the summer of 2003. That total is only 81.9 percent of the 866 second-year law students who clerked in Texas at 21 firms during the summer of 2002. So, even though the average offer rate is up a little, the pool of summer clerks at the 22 firms is down a little. According to information provided by 21 of the firms, just over a quarter of the new associates in Texas graduated from the University of Texas Law School. The University of Houston Law Center and Southern Methodist University Dedman School of Law were the next most popular schools for the new Texas associates, followed by Harvard Law School. [See " New Associates' Law Schools."] The new associates at the 22 large firms graduated from all the law schools in Texas — except for Texas Southern University Thurgood Marshall School of Law — and 50 other law schools, according to information provided by the firms. SIZE MATTERS The biggest classes of new associates are at Baker Botts, with 53 new lawyers in Texas, and at Haynes and Boone, which has 50 new associates. Other firms with large Texas operations also have large new crops of associates, including Fulbright & Jaworski with 48 new associates in Texas and Vinson & Elkins with 34. But Jenkens, the fifth-largest firm based in Texas, has only nine new associates this fall, a number that’s roughly half of its new associate class in the fall of 2002. The firm made offers to 20 clerks last fall. William Durbin, chairman of Jenkens, says the relatively small class of new associates this fall reflects the firm’s effort over the past year or two to reduce its overall size and to restructure. But, he notes, “now we are where we want to be,” and the firm’s high offer rate this fall reflects that new focus, he says. “We were very deliberate in determining the size of the class for the summer associate program, and the class size was right, and everyone in our class was someone we were excited about coming to our firm,” Durbin says in explaining why the firm made offers to all 28 of its summer clerks this year. “This year we are expecting a pretty good yield,” he says. At Baker Botts, the firm has 53 new associates this fall, compared to 79 offers last fall. (The numbers can’t be precisely compared at Baker Botts and many of the other firms because some of this fall’s new associates clerked at the firm in the summer of 2001 and served judicial clerkships for a year.) David Sterling, the hiring partner for Baker Botts in Houston, says the firm’s acceptance rate for permanent offers was high last fall — the firm made 79 offers. “Our yield was up because I think we had good programs and less competition from the California-based firms,” Sterling says. When deciding to make offers, Baker Botts looks less at the practice needs of the firm than the qualifications of the summer clerks, Sterling says. The firm made offers to 71 of the 86 students who clerked at the firm this past summer, for an 86.6 percent offer rate that’s negligibly different from its 88.8 percent offer rate in 2002. “Once again we made offers to everybody we thought deserved one. … We are not real good at predicting ultimately who will accept and who will decline and so forth,” he says. “The numbers shake out how they do.” Taylor Wilson, hiring partner at Dallas-based Haynes and Boone, says the firm has such a large class of new associates — 50 started work in Texas on Oct. 1 — because, like Baker Botts, its acceptance rate was high last fall. The firm extended offers to 58 clerks after the summer of 2002, according to information compiled in Texas Lawyer‘s new associate summer clerk report in 2002. “We were a bit of a victim of our own success,” says Wilson, a partner in Dallas. Because the firm has so many new associates this fall, the firm made fewer offers to recent summer clerks, he notes. Haynes and Boone made offers to 34 of the 65 students who clerked at the firm’s Texas offices in the summer of 2003. That’s an offer rate of 52.3 percent, compared to an offer rate of 65.2 percent the previous year. Another factor in the relatively low offer rate in 2003 is the acceptance rate, he notes. The firm made slightly fewer offers at the end of this summer because it expects a robust acceptance rate because of market conditions. “There was a bit of a shift in the marketplace. We have been witnessing just a higher acceptance rate, and we saw it again last summer,” Wilson says. “What that might say is there are fewer offers going around from other firms. It’s a good position to be in because we are able to recruit the best attorneys.” Wilson says he’s getting a sense from this fall’s recruiting season — when he’s on campus interviewing law students who are interested in doing summer clerkships at the firm next year — that some students are getting frustrated. “Some firms have backed off significantly on their hiring. From our discussions on campus, we are seeing there are fewer law students ultimately getting jobs, which is discomforting,” he says. Vinson & Elkins, which has 34 new associates this fall in Texas, has scaled back the size of its summer clerk program, but not its offer rate. The firm made offers to 54 of the 62 students who clerked in the firm’s Texas offices in the summer of 2003, with an offer rate of 87.1 percent. While the offer rate was 86.1 percent in 2002, the firm had 115 summer clerks in the summer of 2002. Thomas Leatherbury, the Dallas-based partner who heads the firm’s employment committee, says the firm restructured its summer clerk program this year. Instead of holding two sessions during the summer, the firm had most of its summer clerks report in May and work at the firm for 10 weeks, he says. A small number came for the latter half of the summer because they did early-summer clerkships at firms in New York, Washington, D.C., the Silicon Valley or Chicago, Leatherbury says. He believes the new structure is helping the firm land more of the highly sought-after students. It’s working already, according to Leatherbury, who says that despite the smaller summer clerk program this year, the acceptance rate for the fall of 2004 so far is looking good. As a result, he says, the firm should have about the same number of new associates in the fall of 2004 as it has this fall. “We encouraged people to come to us first, and our clerk groups in various cities got very tight, and that turned about to be a really good thing for us,” Leatherbury says. OFFER RATES Litigation-only firm Beirne, Maynard & Parson made offers to each of the nine second-year students who clerked at the firm this past summer. A 100 percent offer rate is the norm at Beirne, Maynard, says Denise Acebo-Hansen, the firm’s hiring partner. “Our philosophy and our program is we don’t ever have more summer clerks than we intend to extend offers to. We don’t play the numbers game like some firms do,” she says, adding that it puts more pressure on the firm to carefully predict hiring needs in advance. Acebo-Hansen, who clerked at the firm for two summers before joining it 12 years ago, says the summer clerks like the firm’s philosophy on hiring. The tough part for the students, she says, is getting through the campus interview process. Several other large Texas firms have high offer rates for this summer, including Dallas’ Akin Gump Strauss Hauer & Feld, which extended offers to 86.2 percent of its Texas summer clerks; Bracewell & Patterson of Houston, with an 84.4 percent rate; and Cox & Smith, Gardere Wynne Sewell of Dallas and Locke Liddell & Sapp, based in Houston and Dallas, each with an 80 percent rate. Also, Jones Day extended offers to 81.4 percent of its clerks in Texas, and Weil, Gotshal & Manges had a 91.7 percent offer rate. At Bracewell, the firm’s offer rate jumped from 66 percent in 2002 to 84.4 percent in 2003. Jennifer Jacobs, general counsel for professional development at the firm, says the offer rate is largely based on staffing needs, but also on the individual candidates. “We are so relationship-driven in our hiring. We look for a fit,” she says. “Surveys like yours are what make you look at the numbers, but we are really looking more at the fit and our hiring needs.” The offer rate dipped considerably at Strasburger & Price, down to 40.6 percent from 77.8 percent in 2002. Kirk Sniff, managing partner of the Dallas-based firm, says the firm offered jobs to a smaller percentage of the students who clerked in the summer of 2003 because the acceptance rate for offers a year ago was higher than normal. The firm has 17 new associates reporting to work this fall out of 21 offers. [See " 2003's New Associates Compared to 2002's Offers"] Sniff says it was a difficult decision to make fewer offers. “We had an exceptional group this summer. We really had top-notch people because of the competition that was out there, and to draw that line lower than in the past in terms of the offers, that was tough,” he says. Strasburger will scale back its summer clerk program next summer, he says, reducing the size from about 32 to around 20, because the firm figures to hire fewer new associates for the fall of 2005. Most of the new associates starting work in Texas this fall at the 22 new firms will make the same base salary as their counterparts who started work in the fall of 2002. But a few firms upped the starting base salary a little, with Bracewell moving to the prevailing Big-Tex base rate of $110,000, up $5,000. Winstead also increased its starting base to $110,000, up from $100,000, and Beirne, Maynard moved to $100,000 from $95,000. New York-based Weil, Gotshal increased its starting base in Texas to $125,000, an increase of $5,000 from $120,000. Related chart: Law Firm Perks Benefits can be much more than health insurance and bar association dues.

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