Employment Prospects Dim as Firms Retrench, Derailing Career Paths for Many
By NATHAN KOPPEL of the WSJ
Fabian Ronisky thought he was on track last summer to become a high-powered corporate lawyer. He was an intern at a leading firm in Los Angeles, earning about $3,000 weekly. But the firm didn’t offer him a permanent job.
Alexis Smith, top, and Fabian Ronisky both are about to enter one of the worst job markets for attorneys in decades. Neither has a lawyer job lined up.
So Mr. Ronisky, a 25-year-old student at Chicago’s Northwestern University School of Law, spent the fall sending 50 resumes to law firms and government agencies, to no avail. Now, just days shy of graduation and with $150,000 of student loans, he plans to move back to his parents’ home in San Diego and sell music and movies online.
“I wanted to use my education,” he said. “But times change.”
Mr. Ronisky is one of about 40,000 law-school students who will graduate this spring and enter one of the worst job markets for attorneys in decades. This year’s classes have it particularly bad, according to lawyers and industry experts. Though hiring was down last year as well, they said 2009 graduates applied for jobs before law firms had felt the full brunt of the downturn.
The situation is so bleak that some students and industry experts are rethinking the value of a law degree, long considered a ticket to financial security. If students performed well, particularly at top-tier law schools, they could count on jobs at corporate firms where annual pay starts as high as $160,000 and can top out well north of $1 million. While plenty of graduates are still set to embark on that career path, many others have had their dreams upended.
Part of the problem is supply and demand. Law-school enrollment has held steady in recent years while law firms, judges, the government and other employers have drastically cut hiring in the economic downturn.
Large corporate law firms have been hit particularly hard. The nation’s 100 highest-grossing corporate firms last year reported an average revenue decline of 3.4%, the first overall drop in more than 20 years, according to the May issue of The American Lawyer magazine.
Morrison & Foerster LLP, a 1,000-lawyer San Francisco-based firm, hired about 30% fewer graduates this year than in the prior year. “It would not surprise me if all firms cut back on hiring law graduates for a couple of years,” said Keith Wetmore, its chairman. Saul Ewing LLP, a 250-lawyer Philadelphia firm, cut hiring of law graduates this year by about two-thirds.
Law firms of all sizes have suffered as clients have curbed work on real-estate acquisitions, mergers, public offerings and other staples of corporate practice. They have had to fire lawyers, reduce hiring and defer the start dates of the law graduates who did receive job offers.
Many 2009 law graduates who were offered jobs just started work this year. And many graduates hired in 2010 won’t start until 2011. So even when the economy picks up, firms would first have to absorb their backlog of recent hires.
It is too early to get a comprehensive view of the employment rate for the 2010 class, but there are plenty of troubling indicators.
Law firms had an average of 16 summer internship positions to offer this year, about half the number of the previous year, according to a March report by the National Association for Law Placement Inc.
Employers last year offered 69% of summer interns a full-time job, down from about 90% in the previous five years.
The University of Texas School of Law, long regarded as among the nation’s top 20, estimates the employment rate for 2010 graduates is down about 10% to 15% from last year.
“I’ve been at this for 23 years, and this is the worst job market I’ve ever seen,” said Karen Klouda, head of career services at the University of Iowa College of Law.
Those considering law school might want to reconsider, said Allan Tanenbaum, chairman of an American Bar Association commission studying the impact of the economic crisis on the profession. Students take on average law-school debt of about $100,000 and, given the job market, many “have no foreseeable way to pay that back,” he said.
Thomas Reddy, a second-year student at Brooklyn Law School, hasn’t landed a summer internship yet after sending resumes to more than 50 law firms. He is taking on about $70,000 of debt each year of the three-year program to earn his degree, but said he may be fortunate to make $80,000 a year in a lawyer job after graduating. “That is less than what I was making before I went to law school,” he said.
Many graduating students remained optimistic and determined to find legal jobs, according to interviews with students and career counselors. And many have secured good positions.
But it is bad form on campuses to bask in one’s success, said Sue Landsittel, a Northwestern law student who will clerk at the 9th U.S. Circuit Court of Appeals in Seattle and join a top corporate firm after that. “You want to celebrate your own good fortune, but you have to remember it’s a delicate issue.”