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Same ol’, same ol’. That pretty much sums up this year’s placement of recent law-school graduates. Entry-levels hires in 2005 decreased at 10 firms, increased at 11 and remained constant at another seven among the firms surveyed. Perhaps a more telling predictor of Atlanta firms’ futures, experts say, is a look at lateral associate hiring. And from that vantage point, the picture is cheerless. The number of lateral hires decreased between 2004 and 2005 at 13 Atlanta firms, indicating a cautious market and an enervated economy. “My experience in the marketplace is that the economy is still very tight, and I think that laterals reflect that,” said Melba Hughes, president of the legal placement firm Hughes Consultants. Firms are “not going gangbusters like they used to,” she said. Instead, they are pulling back from any ambitious hiring practices they may have had previously, she said. And while the impact Hurricane Katrina will have on the nation’s legal community is still unfolding, it may make things a bit edgier for students, according to Hughes. With several displaced third-year law students transferring to Georgia schools, she said, there may be more graduates this year competing for the same number of positions. The domino effect anticipated by displaced third-year students cannot be calculated until Gulf Coast firms assess their damage. In some cases rescinded offers are likely, thrusting New Orleans’ most promising candidates into their adopted communities’ job pools. The pace of a given practice area also determines the numbers of openings. For example, Hughes said, real estate and compliance department hiring is on the increase. “Hiring is picking up [in select areas], so you’re getting mixed messages,” she said. The number of lateral hires at Arnall Golden Gregory, King & Spalding and Sutherland Asbill & Brennan each was down by more than 10 from last year. While hiring declines at other firms were less drastic, almost half of the practices surveyed decreased lateral hiring. Arnall Golden hired two laterals this year, compared to 14 in 2004; King hired 10, compared to last year’s 24; and Sutherland hired 10, down from 21 last year. Other local firms where lateral hiring decreased include Ashe, Rafuse & Hill; Balch & Bingham; Burr & Forman; Fisher & Phillips; Ford & Harrison; Georgia Legal Services Program; Jones Day; Ogletree, Deakins, Nash, Smoak & Stewart; Smith, Gambrell & Russell; and Weinberg, Wheeler, Hudgins, Gunn & Dial. The situation is not isolated to Atlanta. Hughes, who places lawyers in California, New York, Chicago and Philadelphia, said she senses lateral hiring is down nationwide. The overall decrease is not likely to turn around until the economy rebounds, Hughes said. “Law firms are not independent economic systems. I think law firms very much are interdependent on the larger economic systems,” she said. Bucking the trend were Greenberg Traurig — which hired 19 laterals this year, up from nine in 2004 — and Troutman Sanders, which increased from 12 to 26 lateral hires. Lateral hiring also increased at the Atlanta Legal Aid Society; Littler Mendelson; McGuireWoods; Powell Goldstein; Seyfarth Shaw; Stites & Harbison; and Thomas, Kayden, Horstemeyer & Risley. Beth S. Kirch, director of legal career services at the University of Georgia, said when lateral hiring rises, it’s often because the economy has improved. During a recession, she said, the number of entry-level hires is likely to fall. When the economy bounces back, firms look to hire laterals to fill their gaps. A spike in lateral hiring trickles down quickly to entry-level hires, Kirch said. MORE OR LESS All hiring is primarily a function of how much work is walking in the door, said Weinberg Wheeler managing partner John M. “Skip” Hudgins IV. “We hire lawyers because we have more work and we need more lawyers. We hire lawyers as the work comes in,” he said. Weinberg Wheeler hired one fewer entry-level lawyer and three fewer lateral hires than last year, though it is looking to bring one more lateral associate on board. “Lateral people have a little more experience, and they can hit the ground running faster,” Hudgins said. New offices for Fisher & Phillips this year in Kansas City, Mo.; Dallas; Tampa, Fla.; and Somerset, N.J., were attributed to a firmwide increase in hiring. But in Atlanta, the number of entry-level hires remained the same from last year. The Atlanta office hired three entry-level lawyers in 2004 and again in 2005. That could go up next year, said hiring partner Steven M. Bernstein, adding that the firm extended offers to all four of its 2005 summer associates. The same is true at Ogletree, where both of this year’s entry-level lawyers came from the firm’s summer 2004 class, said recruitment director Gregory J. Hare. The firm strives to hire at least two entry-level associates each year from its summer program, he said. “To the extent that that’s not adequate, we look to laterals.” And if a promising lateral wants a job, Hare said, it behooves the firm to make room. “If you have a good person come along, you find a way to make them fit,” he said. Ogletree, like Fisher, gained employees across the firm. Last year Ogletree merged with the 50-lawyer South Carolina firm Haynesworth Baldwin Johnson & Greaves. In Atlanta the firm absorbed three shareholders, three counsel and two associates, Hare said. However, lateral hires at Ogletree’s Atlanta office fell from five in 2004 to two in 2005. ANOTHER DAY, ANOTHER $100K The base pay rates changed at just three out of 27 firms that provided data on salaries. Base pay for entry-level associates rose from $100,000 to $110,000 at Robins Kaplan as of Sept. 1, and from $95,000 to $100,000 at Stites & Harbison. Initial pay at the Georgia Legal Services Program increased from $35,550 to $36,050 this year. Littler Mendelson’s entry-level base pay is $100,000, but that figure is under review for 2006, according to Michele Lotta, national recruitment coordinator. Bernstein said he does not expect a citywide change in entry-level salaries anytime soon. Firms draw salaries upward when they find it necessary to stay competitive, he said, adding that the Atlanta market does not look like it is close to facing that pressure. “Jones Day did that a few years ago in reaction to national trends. In our case, we would be looking at what our competitors are doing, and I’m sure they would say the same of us,” Bernstein said. “We’ll watch the market and react accordingly.” The base pay at Bernstein’s firm, Fisher & Phillips, is $90,000. Associates can expect an increase to $95,000 after their first full year, as well as potential productivity bonuses, he said. The starting salary at Weinberg Wheeler is about average for Atlanta. “Salaries�the $100,000�seems to be where everyone is,” Hudgins said. “It’s not like we all get together and talk about it, but they’re all about the same.” The firm’s bonus plan has gone up over time, and Hudgins said he expects that salaries eventually will, too, when the economy shifts and firms feel they have to respond. At the Atlanta Legal Aid Society, where the $34,000 starting salary ($36,500 after passing the bar) is just a third of the pay at more competitive practices in town, low pay is offset with “great benefits,” deputy director Marian Burge said. That includes an education plan that reimburses employees up to $500 per month on their student loans, she said. Lawyers at Ogletree, whose starting salary is the par $100,000, can expect their first pay raise after one year, Hare said. They typically receive an annual raise of about $5,000 to $10,000, which he said is also “normal for the market.” The salary surge five years ago began in California, when firms there became the first to start pushing for more competitive prices. “That was just latent fear that law firms were going to lose their best and brightest to in-house jobs with inflated salaries,” Hare said. Ogletree offers six pay scales nationwide across its 24 offices, Hare said. The base pay for an entry-level lawyer in Los Angeles is $115,000; in Washington and Chicago $110,000; in four Texas offices $105,000; in Atlanta, Miami and New Jersey $100,000; and $90,000 at 12 other locations, he said. The variance boils down to location and demand. “It’s a bigger-market, smaller-market thing,” Hare said. Bernstein agreed that pay scales might tip based on geography. For instance, Fisher’s base pay in Chicago is higher than in Atlanta, he said. Regardless of location, the market seems to be holding steady with no large change in the predictable future. “I think today you see a much more prudent market,” Hare said.

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