Carrie Nie says she was ready to jump in and get to work as a first-year associate with Winstead’s Dallas office, especially since she already had met many of the shareholders and associates while a summer associate in 2011.
“I reached out to them my first week, and said, ‘I’m here, can I help you with anything?’ ” says Nie, a 2012 graduate of Southern Methodist University Dedman School of Law in Dallas.
Nie joined the firm’s real estate/finance group on Sept. 4. Since then, she says she has been gaining practical knowledge from colleagues about crafting loan documents, conducting due diligence and working on foreclosures. “They’re good at finding appropriate projects that I can wrap my head around, sitting down with me and teaching me,” Nie says. “I went straight through from undergrad to law school. I’d done the school thing for a while. I was ready to start working.”
Nie and 249 other new associates started working full time this fall at 18 of Texas’ 25 largest law firms — that’s 12.1 percent more first-year associates than the 223 who began working at the same firms in 2011. 2012 marks the first time since 2008, when the recession began, that the large firms have brought in a bigger entering class than they did the previous year, according to Texas Lawyer‘s New Associates Survey.
See related charts:
* New Associate Statistics 2012
* New Associates’ Start Dates
* Women and Minority New Associates
* New Associates’ Practice Areas
* New Associates’ Law Schools
* Offers to Summer Associates at Large Firms in Texas
* Law Firm Perks
“Business is picking up for them, and the partners are looking down the line and saying, ‘I’ve got more work than I can do, and senior associates have all the work they can do,’ ” says law firm consultant William Cobb of Houston. “ When you’ve got fourth- to seventh-year associates working their buns off and starting to get tired, you pay attention to it. You don’t want them to be so burned out they start thinking, ‘There’s got to be another place for me to go.’ “
Additionally, two of the large firms in the survey, Houston-based Looper Reed & McGraw and Dallas-based Winstead, increased the base annual salaries for their incoming classes by $10,000 and $18,000 respectively.
Looper Reed raised first-year associate salaries to $120,000 to stay competitive in Texas, says James “Jamie” Ribman, hiring shareholder for the 123-lawyer firm’s Dallas office. “We took a look at the legal market, and what other firms were doing, and felt this was the right time to make a move,” he says. “There may be additional moves in the future,” he says.
Looper Reed hired eight first-year associates this fall, compared to five last year. “We’re seeing an increased volume of work, and we continue to be optimistic about the demand for legal services in Texas,” he says. “So we were hiring to meet that expectation.”
Winstead bumped first-year associate salaries from $142,000 to $160,000, because the firm saw an increase in the profitability of its first- to third-year associates in 2011, says Mike Alessio, a Dallas shareholder and member of the 300-lawyer firm’s board of directors. The firm increased base salaries for all three classes, he says. “For us, we wanted to match compensation with profitability and value,” he says. The younger associates have had more billable hours, due to increased business, and have had more success developing relationships with clients, he says. “We noted there was a greater client contact in first-, second- and third-year ranks and more opportunity for that to add value to the overall client relationship,” he says.
Winstead hired five first-year associates in 2012 compared to six in 2011. Alessio says that five or six is a normal size for the firm’s first-year class. “Historically, we have a very small starting class,” Alessio says.
Like most of the state’s large firms, Dallas-based Thompson & Knight is paying its first-year associates a starting annual salary of $160,000. “What our firm always does is look at market conditions and whatever our competition is doing,” says David Schulte of Dallas, hiring partner for the 326-lawyer firm. “One thing that stays the same is that $160,000 is a lot of money,” he says.
The firm increased the size of its entering class, from seven first-year associates in 2011 to 13 this year. “The summer associate class we were hiring from was a little bit larger than the previous summer,” Schulte says. The 2012 first-year associate class was initially recruited by the firm in the fall of 2010 during on-campus interviews for 2011 summer associates. “I think we’ve done a pretty good job of predicting the needs of our firm” Schulte says.
This year, Dallas-based Akin Gump Strauss Hauer & Feld also hired a larger first-year associate class — 10 for its Texas offices, compared to five in 2011. “The economy is not dramatically different than it was for the prior year’s class, but we’ve had a successful recruiting season and business remains strong in offices throughout the state,” says David Botter of New York City, the 902-lawyer firm’s hiring partner.
At the large firms, 80 of the 250 new associates are working in their firms’ corporate practice area. Houston-based Vinson & Elkins has the largest entering class with 59 new associates, 34 of whom are in the corporate practice area. The firm has a dual-track system: For their first two years with the firm, each new associate is assigned to two of the six groups within the corporate practice area, says Doug Bland of Houston, hiring partner for the 737-lawyer firm. “At the end of two years they will have experienced work in two closely related, but very different practice [groups], and they can make some decision about whether they want to focus on one or the other or both,” he says.
V&E’s 2012 class is larger than last year’s 46 new lawyers. “As an energy firm we’ve been fortunate to be part of the shale revolution, and we’ve seen a tremendous amount of transaction work and even litigation work coming out of that,” Bland says.
Kelly Sanderson is one of V&E’s first-year corporate associates in Houston. She is a 2012 graduate of the University of Texas School of Law in Austin and was a summer associate with the firm in 2011. Sanderson is in the mergers and acquisitions and capital markets groups. “I consider myself equally involved in both areas,” Sanderson says.
Since joining the firm on Oct. 1, Sanderson says she has worked on a client memo for the capital markets group defining the steps required for the client to reorganize its company and has prepared a company profile for the M&A group.
“The learning curve is very steep,” Sanderson says. “It’s amazing how quickly you begin soaking up information.”