Happy Trends in the Legal Employment Market—Just in Time for the Holidays

There are a few pleasing trends in the legal employment market in the last couple of weeks, including:

1.  There’s a year-end associate bonus fight going on, with early announcers such as Cravath and Davis Polk being trumped by some of their competition.  Above the Law is a great place to follow this news; this is one of its many posts during the last couple of weeks.

2.  The Robert Half Legal Hiring Index reports that more legal employers are planning hires in early 2011, though the increase isn’t marked and over half of respondents indicated that they had no such hiring plans.

3.  Everyone I talk with at law firms on the east coast is jammed with work.  That’s notably unscientific but it counts.  More important, these lawyers don’t think this is just a normal year-end surge in activity; they expect the work to continue into next year.  Now, law firms have for some time now been getting more work from a smaller number of lawyers but there’s a sense that this productivity gain may be topping out, forcing employers to upwardly adjust the number of new lawyers they’ll need.

None of this is evidence that we’re going back to the “roaring aughts”  or a hiring market remotely resembling them.  We aren’t.  And there are other predictions of trouble on the horizon.  For example, there is the hard news of two consecutive months of contraction in the legal employment market.  And Wells Fargo’s Jeffrey Grossman foresees further declines in legal employment.  I’m not inclined to give much credit to that prediction, since it appears to hinge on a significant expansion of alternative fee arrangements between law firms and their clients, and such alternatives always seem to be right around the corner—but hourly billing continues to be the dominant model in spite of constant predictions of its demise.

I’m a cautious person, especially when considerable investments in law school and future careers are at stake.  Still, I’m mildly optimistic when looking at all this news as a whole.  The reason is that we’re starting to see several trends all pushing in the same positive direction.  I don’t react too strongly to one or another signal of the health (or lack thereof) in the market.  But when trends start to coalesce, that gets my attention, and this is really the first time in the last few years that we’ve had a group of positive signs coalesce.

Law firm bonuses, for example, are as much or more about public relations, i.e., the next recruiting class, as they are about the associates who have toiled for the last year.  The fact that there’s a public relations battle going on may signal that law firms are attempting to position themselves for more serious competition for new associates than they’ve faced in the last few years.  And I don’t discount the unanimity of lawyers working very heavy hours in the last couple of months.

None of this makes me think that this is the time to revise Advise-In’s cautious view of legal employment for new law school graduates for the next couple of years.  But it does make me hopeful—if these fragile trends continue for the next few months, and are joined by other data, prospective law students might consider adjusting their reasonable worst-case calculations of the value of a law school investment somewhat upward.

~ by Kyle Pasewark at Advise-in Solutions on December 17, 2010.

3 Responses to “Happy Trends in the Legal Employment Market—Just in Time for the Holidays”

  1. […] week, I analyzed some recent economic and legal market data.  The data did not have deep roots in terms of time, and my conclusion was tentative.  It was […]

  2. […] weigh in, even if late (indeed, the report ran just as the last couple of months give cause for a little optimism in the legal employment market).  And it’s good and important reading.  What it isn’t is […]

  3. […] I’ve been generally encouraged about trends in the near-term legal employment market.  In December, we saw some momentum gather for U.S. legal employment in the form of a confluence of encouraging […]

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