Why the job market is changing

[smartandunique]

Why the job market is changing


Submitted by admin on Tue, 10/26/2010 - 7:54am
 
The law firm world that we have all known is changing. Fueled by new economic realities. Law firms are beginning to adapt to a new reality. And that makes it hard for law students to understand the part they care about the most — the entry-level hiring market.


As someone who spends a large amount of time studying the history and structure of the legal services industry, I might have some useful insight on the vagaries of the current job market, including how things might change in the future. 

Here are three relevant observations:

1. The traditional law firm hiring model (pedigree and grades) doesn’t do a very good job of selecting candidates who are likely to succeed as large firm litigators or corporate lawyers.

2 The traditional credential-based model is gradually being dismantled because clients are no longer willing to absorb the cost of bad hiring decisions.

3. The skills and behaviors you need to set yourself apart are not taught in law school—indeed, your typical law professor is completely unqualified to serve as your jungle guide.


How we got here

Although these observations may seem extravagant, they make more sense when placed in historical context. At the beginning of the post-World War II era, the vast majority of U.S. lawyers were general practitioners working as self-employed businessmen. They did not make much money, primarily because there were more generalist lawyers than work.

In contrast, the average partner working in a “large” law firm made approximately five times as much as the typical solo practitioner. Although big firm lawyers comprised only a small fragment of the private practice bar (less than 4 percent of lawyers worked in firms with five or more partners), they had specialized skills that were in short supply relative to demand. 

For the next several decades, market forces favored the larger law firms. During this time period, the rise of the administrative state and the growth of transnational commerce created an enormous need for sophisticated business lawyers. And the only credible way to fill this talent gap was for the specialists — the partners in large firms — to train younger lawyers (associates). 

Indeed, if a firm had an established reputation, the business clients were willing pay for this training. 

Historically, the leading business law firms recruited at elite, Ivy League law schools, in part because these schools had full-time, learned faculty and required an undergraduate education. In the days before the LSAT and stringent state bar admissions standards, there was a general belief that the Ivy League model produced better thinkers and problem-solvers. 

After lawyers and law professors organized themselves nationally — through the ABA and the Association of American Law Schools — they were then able to successfully lobby state governments to adopt the Ivy League model as the template for all law schools. This movement coincided with the rise of the great public law schools, which made legal education affordable to a large number of first generation professionals. 

These changes in legal education substantially diluted the business rationale for law firms to recruit at elite law schools. But, the self-image of law firms had become intimately intertwined with the educational pedigree of their lawyers. And because large firms were still only a small proportion of the total legal market, any pay premium for the top academic graduates was still small enough to pass along to clients. In short, there was no economic downside to being an academic snob.

These favorable economic conditions lasted for several decades, and it became the industry-wide presumption that partners from the most elite schools were the best lawyers. The institutionalization of on-campus interviews by large law firms further perpetuated this pattern.  In turn, 20-year-old college students looking for a reliable path to prestige and wealth set their sights on the so-called national law schools.

Most current law students are quite familiar with the rest of this story. 

As the financial and technology sectors boomed in the late 1990s and early 2000s, law firms went on a hiring spree. And for the first time in history, the demand for elite law school graduates outstripped supply. This produced an entry-level job market that was “bi-modal”—a large proportion of graduates clustered at salaries of $40,000 to $50,000, a second large cluster at $140,000 to $160,000, and only relatively few jobs in between. 

[smartandunique]

sorry..they didn't publish the whole article yet.

[john4040]

sorry..they didn't publish the whole article yet.

Where did you find it?

[IPFreely]

The intro is so badly written that I have to wonder what the author's pedigree is.  Also, going through all of those contortions just to avoid mentioning the commonly-accepted phrase "the Cravath model" seems a bit much -- which makes me wonder whether the author even knows the term.  If s/he doesn't, well, that's another strike against the author's meaningful ability to discuss the subject. . . .

[smartandunique]

The National Jurist

[nealric]

Here are three relevant observations:

1. The traditional law firm hiring model (pedigree and grades) doesn’t do a very good job of selecting candidates who are likely to succeed as large firm litigators or corporate lawyers.

2 The traditional credential-based model is gradually being dismantled because clients are no longer willing to absorb the cost of bad hiring decisions.

3. The skills and behaviors you need to set yourself apart are not taught in law school—indeed, your typical law professor is completely unqualified to serve as your jungle guide.

If anything, large firms have become even MORE prestige obsessed and MORE grade conscious in the downturn. The traditional credential-based model isn't being dismantled at all- firms are just hiring fewer people. Perhaps the current method isn't a good method of selecting candidates, but I've yet to hear of a large firm complaining that they aren't getting quality candidates. The issue is getting enough clients to pay for the training of those quality candidates- which they will have to do regardless of their screening criteria.

Small firms seem to be doing the same thing they've always done. They go to the local schools.

[Thane Messinger]

Here are three relevant observations:

1. The traditional law firm hiring model (pedigree and grades) doesn’t do a very good job of selecting candidates who are likely to succeed as large firm litigators or corporate lawyers.

2 The traditional credential-based model is gradually being dismantled because clients are no longer willing to absorb the cost of bad hiring decisions.

3. The skills and behaviors you need to set yourself apart are not taught in law school—indeed, your typical law professor is completely unqualified to serve as your jungle guide.

If anything, large firms have become even MORE prestige obsessed and MORE grade conscious in the downturn. The traditional credential-based model isn't being dismantled at all- firms are just hiring fewer people. Perhaps the current method isn't a good method of selecting candidates, but I've yet to hear of a large firm complaining that they aren't getting quality candidates. The issue is getting enough clients to pay for the training of those quality candidates- which they will have to do regardless of their screening criteria.

Small firms seem to be doing the same thing they've always done. They go to the local schools.

Absolutely correct.  Firms are changing, along with the demand for their services . . . but the impact vis-a-vis students is very much more of the same. 

What might be difficult to accept is that a senior practitioner CAN tell, roughly, who's "got it" and who doesn't, and there IS a correlation to prestige (both school and grades).  For a firm, at whatever level, that's good enough.  Especially with the latter (grades), the assumption is that you (the future graduate) do control that.  We can debate this ad nauseam (and I have, usually in a way critical of firms and law schools), but the fact remains that firms simply cannot be bothered with reforming law schools; they get what they take.

Thane.

[bigs5068]

One thing I notice, but maybe it is only because I am in the Bay Area is that if you have a computer science or engineering background your grades in law school will not matter. There are so many huge tech companies here that are doing extremely well and need to protect themselves and IP firms are doing amazing. If you have an engineering background you are golden regardless of what law school or what grades you get.

[Thane Messinger]

One thing I notice, but maybe it is only because I am in the Bay Area is that if you have a computer science or engineering background your grades in law school will not matter. There are so many huge tech companies here that are doing extremely well and need to protect themselves and IP firms are doing amazing. If you have an engineering background you are golden regardless of what law school or what grades you get.

Bigs -

It might be going a bit far to say that law school and grades don't matter at all, but what is true is that legal employers look for qualities.  Some of those qualities are obvious (such as alma mater and grades), and are important for the traditional law student.  Other qualities are unique, such as those for IP work.  Still another quality that can apply somewhat differently is language. 

So if a firm or agency needs someone who understands a specific field, such as chemical engineering, that or a degree in chemistry will serve to put that candidate in a different position.  This is also true (albeit somewhat differently) with language proficiency; one either can communicate or one cannot. These can have the effect of seeming to push grades to the side, but in fact that is not true either.  First, chances are good that an engineer will too have those grades.  = :  )   The correlation between learning science and learning the structure of law is positive.  And specialized knowledge is a soft factor pulling, on average, those applicants into higher-ranked schools.  Finally, while the universe of individuals with a law degree plus some specialized credential is smaller, it is not a universe of one.

[bigs5068]

Your right when you use the word all in any context it is usually wrong. It seems that if you have respectable grades and an IP background from even a CBA school you would have a better shot at an IP job than someone with solid grades from Hastings or another tier 1/2 school and with a Political Science Degree. It certainly helps to have a specialized knowledge when going into the job market. A J.D. and grades are not always enough to set you apart. There are plenty of people with a J.D. and good grades, but not that many with those qualities and a computer science degree.