Law Firm Deferrals Put Future Grads on Notice

The Philadelphia Inquirer ran an interesting article about the recent trend of deferred associate jobs at major law firms. Many of the article's key points echo the thoughts of a previous column on this blog, which lauded the efforts of several current law students who seek to create a union of sorts in order to push back against some of the more onerous changes taking place during the recession. That blog post anticipated that law firms would capitalize on current market conditions in order to cut back salaries, benefits, perks, and quality of life expectations of incoming lawyers. The column in the Inquirer further illustrates that point and suggests that the current changes will indeed have a lasting impact beyond the current economic downturn.

In the column cited above, several credible sources weigh in on the most visible and dramatic recession trend, which is the deferral of start dates for new attorneys. James Leipold, the executive director of the National Association for Law Placement (NALP, the producer of the leading law firm guide) notes that both the breadth and the volume of deferrals dwarfs what occurred during the 2001 recession, while David Skeel, a corporate law professor at Penn Law, envisions the deferral movement paving the way to lower salaries and other cutbacks in the future.

The Inquirer article doesn't go far beyond salary considerations when analyzing potential permanent changes to the legal landscape, but it seems a safe bet that other perks and quality of life efforts will melt away as well. This is what we posited several weeks ago:

That is why it is a near certainty that law firms will go right back to squeezing every last drop out of their associates. Without fear of a Wall Street exodus and armed with lowered expectations, firms are likely to keep practice groups “streamlined” (aka woefully understaffed and overworked) while holding compensation in place. Which will of course lead to even more brutal job conditions than we had in place before all this happened. The billable hours will skyrocket, diversity will take a backseat, and nascent training and mentorship programs could disappear entirely.

The quote above seems even more likely given the weight of new evidence. As firms push more and more associates into deferred start dates, it will increase the fear that jobs are scarce and that associates have very little bargaining power. With that shift, law firms will take back the high ground and presumably see little need to address the issues of junior associates. It is no secret that many partners at BigLaw firms frown at younger generations and see the most recent generation of associates as overpaid and coddled, so it is highly unlikely that firms (which, by and large, are partnerships controlled by those same partners) will seek to improve quality of life without market pressure to do so.

What does it all mean for someone thinking about attending law school? Ironically, probably not a whole lot. Most young attorneys who thrive in a law firm have their eyes on making partner and don't need higher entry-level salaries or "soft" perks in order to remain motivated. Those that have no interest in making partner or remaining an attorney at a big firm are usually not all that happy anyway, regardless of whether their starting salary is $145,000 or $160,000 and regardless of whether there are mentorship programs and annual conferences to attend. Since most law school grads fall into one of those two categories, it is unlikely that a sea change at the junior associate level will dramatically alter the big picture landscape for law school grads. That said, it is more imperative than ever that pre-law students and law school applicants gain a solid understanding of their career options and the steps that are necessary to either secure or avoid a BigLaw job coming out of school.

In short, everyone needs to be on notice.

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