The days of associates being snapped up for $160,000 a year slowed considerably over the past three years. Eight to ten years ago, supply and demand favored associates who could count on six-figure salaries right out of law school. According to The Philadelphia Inquirer, "the devastation that swept through the legal marketplace in 2008 and 2009 has come to an end. Layoffs have stopped or at least have been sharply curtailed, firms that suspended hiring are recruiting once again, and profits, though flat or down, have stabilized..."
When the tide turned and hiring stalled during the recession, several years' worth of law graduates faced slim opportunities. Now the WSJ Law Blog reports that associate salaries are bouncing back to pre-recessionary rates and as previously noted on the Lexis Hub, lateral moves have picked up considerably. A hiring rebound should mean BigLaw is recovering and that there's plenty of work for these new hires. But not so fast. In an investigation of the relationship between associates' salaries and law firm health, the Inquirer reports otherwise, "Associate salaries and other compensation metrics don't come close to telling the story of changes under way in big law, say many of the profession's sharpest observers."
Several firms note in the report that business at larger firms has not bounced back and that slow improvement will take years. Why the high-salary hiring then? The Inquirer quotes University of Illinois Law Professor Larry Ribstein, who explained that "Good associates are still very valuable in this marketplace...(with) more regulation than ever, a sophisticated ability to grapple with that is more important than ever. The question is how many of them do you need. And the answer is, not as many as before."
The reality check, Ribstein adds in this Truth on the Market post, implies that law schools need to concentrate on preparing associates who can hit the ground running, "someone who actually knows something useful out of the starting gate, not just anybody with a high IQ from a top law school. The question of how to produce these people should be dominating the discussion at law schools today. So far, I haven't seen that happen."
WSJ Law Blog
Truth on the Market