Law firm recruiting flat for fourth straight year

For the fourth year in a row, law firms continued to exercise limited entry-level hiring, according to the latest study by the National Association for Law Placement, Inc.

NALP just released its “Perspectives on Fall 2012 Law Student Recruiting,” an annual report based on NALP surveys on selected aspects of fall recruitment activity and the experiences of both legal employers and law schools.

The report also found that the legal sector saw a very small net gain in overall jobs in 2012, and overall lawyer headcount remains far off of pre-recession highs.

Against that background, recruiting volumes by U.S. law firms on the campuses of U.S. law schools were mostly flat during the late summer and early fall of 2012 compared with recruiting activity the year before. As reported by both law schools and law firms surveyed by NALP, there were pockets of growth and pockets of declining volumes, with a majority of stakeholders reporting no change from the previous year.

Over the last three years, law firms have increased their entry-level hiring activity compared with the crash in entry-level hiring reflected by the data from 2008 and 2009.

Rather than exhibiting the slow and steady recovery that might be hoped for, however, some firms seemed to put the brakes on in 2012, and both the median and average number of offers made to 2Ls (members of the Class of 2014) for summer associate positions in 2013 fell, as did the percent of interviews resulting in offers, after two years of gains that followed 2009 nadirs.

Law firms continue to bring in small summer classes, with median and average class size barely increasing from recession-era lows.

Offer rates coming out of summer programs remained high, but fell by more than a point from the previous summer, and, perhaps not surprisingly, acceptance rates for those offers set another record for an historic high.

For the fourth year in a row, few firms ventured back into the 3L market, and thus, students with offers from their summer program found few competing offers on the table.

For members of the Class of 2013 who were summer associates in 2012, the offer rate for entry-level associate positions fell by more than a full percentage point, from 91.4 to 90.2 percent.

Compared to the dire 2009 rate of only 69.3 percent, offer rates remain strong, but did not continue to grow.

Only 19 percent of offices reported returning to the market to look for 3Ls who had not previously worked for them. In total, fewer than 100 offers were made to 3Ls nationwide by respondents to NALP's survey.

“We have seen some faltering in recruiting volumes this past fall,” says NALP Executive Director James Leipold, “and that reflects the continuing faltering in the larger legal economy.

If you read the client advisories coming from some of the private banks that are involved in law firm financing, it’s clear that 2013 is not likely to be dramatically better.”

As law firms battle for market share and compete within a global marketplace that is driving the price of legal services down,  he said, “law firms continue to be cautious about bringing in more lawyers than they can confidently keep busy.”

“I would expect flat and faltering to be characteristics of the entry-level law firm hiring market going forward, at least for the short and even medium term,” Leipold said. “Multiple experts have made the case that the legal market is not likely to return to pre-2007 levels, and the recruiting environment reflects that reality.”

In 2012, both law schools and law firms reported a mix of increases and decreases in recruiting activity as measured by the number of campus visits made, with the largest number of employers reporting no change at all.

While law firm recruiting activity and volume vary greatly from one office to another, these national aggregate numbers demonstrate that recruiting volumes were mostly flat after two years of modest growth.

Geographic differences were quite apparent, underscoring the fact that the recovery for the legal economy has been uneven, varying tremendously by location and practice area.

It seems clear that law firms remain cautious in their first-year hiring, unwilling to make commitments to large numbers of new law school graduates at a time when client behavior and the demand for legal services continue to be uncertain.