First-year associates usually begin their full-time careers at BigTex firms as fall begins. They put on their best suits and report to work after they take the Texas Bar Examination and then perhaps spend a few weeks of downtime on a beach or traveling in Europe.
That’s not the case this year. Most baby lawyers at Texas’ largest firms are starting their careers later than usual. Some firms have delayed the start dates for first-year associates by just a few weeks, while other firms have delayed start dates by several months or even a year. And at least four of Texas’ largest firms have not yet decided the starting salaries for their latest crop of first-year associates.
Most incoming first-year associates with BigTex firms received permanent job offers from the firms in the summer or fall of 2008 before beginning their final year of law school. The firms had downsized their 2008 summer associate classes in anticipation of needing fewer full-time associates for the fall of 2009. [See "Fewer Summer Associates Spread Their Wings at BigTex Firms This Year," Texas Lawyer , June 2, 2008, page 1.] Despite that caution, the ongoing recession means almost all of the BigTex firms pushed back the start dates for their new associates.
“The concern is that the recession is going to drag on for a while,” says Stephen D. Good, managing partner of Dallas-based Gardere Wynne Sewell. “We’re just not seeing the turnover we would normally see in the associate ranks,” he says. The 267-lawyer firm has 15 new associates in Texas compared to 14 last year.
Three of Gardere’s new associates started working in September for the $145,000 annual starting salary the firm adopted in May. That’s when the firm announced it was decreasing first-year associate salaries from $160,000. Good says the firm has not yet determined the salaries for the 12 associates who will begin working in January 2010. He says it is unlikely salaries will increase, given that other firms also have announced decreased first-year associate salaries. “The reality is we are waiting to see where the market is,” he says.
For this year’s New Associates Survey, the 26 firms with the largest Texas operations (according to Texas Lawyer ‘s April 27 “The Texas 100″ poster) were asked to provide information about the new associates in their Texas offices. Five of the firms decline to provide data: Baker & McKenzie of Chicago; Austin-based Brown McCarroll; Houston-based Fulbright & Jaworski; Greenberg Traurig of Miami; and Atlanta-based King & Spalding.
There are 358 new associates at the 21 firms compared to 397 new associates at the same firms in 2008 — a 9.8 percent decline. More than one-third, or 125 of the first-year associates, will not start their jobs until after Jan. 1, 2010.
See related charts:
New Associate Statistics 2009
Offers to Summer Associates at Large Firms
2009′s New Associate Hires Compared to 2008′s Offers
New Associates’ Law Schools
Law Firm Perks
Start Dates for First-Year Associates Compared to 2008 Start Dates
As in 2008, the majority of the firms are paying the first-year associates starting salaries of $160,000 a year. In addition to Gardere, three firms — Dallas-based Haynes and Boone; Richmond, Va.-based Hunton & Williams; and Pittsburgh-based K&L Gates — report they have not yet finalized salaries for their first-year associates.
“A lot of firms seemed to have dropped to $145,000, but our goal is to stay competitive with the top-tier firms in Texas,” says Thomas H. Yang of Dallas, the hiring partner for 500-lawyer Haynes and Boone. “It is not clear where that tier has set the number yet,” he says.
The 2008 starting annual salary for HayBoo’s 33 Texas first-year associates was $160,000. The firm, which has 425 lawyers in Texas, has decreased the number of first-year associates firmwide by about 10 percent compared to last year, Yang says. Last year the firm’s first-year associates started by mid-September, but this year most of the 38 new lawyers in Texas are starting Nov. 30, he says.
In the Texas offices of New York-based Weil, Gotshal & Manges, the majority of the firm’s new Texas associates, nine of 15, have voluntarily decided to take the firm’s offer to delay their start dates until January 2011, says Glenn D. West, managing partner of the firm’s Dallas office. Of the remaining new associates two are starting this fall and four are starting on Jan. 19, 2010.
“It’s a way to address the disconnect that all law firms have experienced between the incoming classes and the lack of attrition that occurred over the last 12 to 18 months, compared to prior years,” West says. Law firms hire based on certain assumptions of historical ratios of accepted offers and historical attrition, he says. With lower associate attrition rates due to the ailing economy, the firm has more lawyers than expected, he says.
Weil, Gotshal, which has 123 lawyers in Texas, gave a $15,000 stipend to associates with a deferred start date of January 2010 and offered an additional stipend, beginning at $60,000, to those who accepted a January 2011 start date. [See "Deferral Time."]
“We think it was a much better approach than law firms that effectively have mass layoffs of existing people in order to bring in new people,” he says. “We dealt with it in a different way.”
Unlike new associates at most of the large firms, first-year associates at Dallas-based Strasburger & Price have start dates that match those of last year’s first-year class. “I’m working on five different projects already,” says Ryan Langston, a first-year litigator in the firm’s Frisco office who started work on Oct. 5. “It’s a good thing to be busy, especially in this economy.”
Strasburger’s five first-year associates started work between Aug. 17 and Oct. 5, says Scott A. Shanes of Frisco, the firm’s hiring partner. The annual starting salary of $120,000 for the 166-lawyer firm’s first-year associates is the same amount paid to the firm’s three first-year associates in 2008, Shanes says.
Jackson Walker reports that all of its first-year associates, 10 for 2009, started working the day after Labor Day, the same day the firm’s 17 first-year associates began their jobs last year.
The 23 new Texas associates at Houston-based Bracewell & Giuliani have been asked to start their full-time employment by Nov. 2, slightly later than the Oct. 6 start-date deadline for the firm’s 31 first-year associates last year, says Jean Lenzner, the firm’s director of attorney employment. She notes that about one-fourth of the new associates were asked to come in earlier than the Nov. 2 deadline due to client needs.
The Dallas office of Washington, D.C.-based Patton Boggs reports delaying new associate start dates by about four weeks, to Oct. 19, to be consistent with the firm’s other offices. The remaining firms have also either pushed back start dates for all or some of their new associates.
Houston-based Baker Botts has delayed the start date for its 69 new associates — the largest number of first-year associates among the 21 large firms — until Nov. 16, says Cristina E. Rodriguez of Houston, the hiring partner for the 722-lawyer firm which has 467 lawyers in Texas. In previous years, the firm’s new associates began on staggered dates starting in September, but this year they are all starting on the same day in November, she says. “They are starting at a traditionally slower time of the year to focus on two months of training,” she says. “So they will be very well positioned to hit the ground running in January 2010.”