The sacred apprenticeship model broke down in the past decade, as law firms swelled with dozens more associates. The average number of lawyers at a major New York firm nearly doubled, from 233 to 455, between 1984 and 2008, according to data provided by William Henderson, a professor of law at the University of Indiana. The number of equity partners, meanwhile, only creeped upward, from 72 to 99. Meanwhile, at the top 50 largest American law firms, average annual profits for partners grew five times between 1984 and 2006, from $309,000 per partner to $1.5 million. A very lucky few indeed make partner these days.
But the armies of young hopefuls were sustained by steadily rising six-figure salaries straight out of school, paid for by hours billed to the booming finance industry (starting salaries for first-year associates would reach $160,000 during the recent boom). As long as corporations and banks raked in billions, no one questioned legal bills in the millions. Now they’re starting to ask: “Do I really need to pay an Ivy League grad in a prestigious midtown office to check my contract for commas?”
New York law firms are in a painful contraction, firing people in large numbers for the first time. More than 15,000 people, including nearly 6,000 attorneys, were laid off from major U.S. firms between January 2008 and November 2010, according to the grimly fascinating Web site Law Shucks.
Meanwhile, overall U.S. law schools have kept growing-at least until this year, when applications dropped by 11.5 percent, according the Law School Admission Council.
A 3L in the middle of his class at N.Y.U. said the career services office told him that more than 50 of the roughly 300 people in his year seeking private-firm jobs were still looking for work only months before graduation. “I think they have to look at themselves,” he said of the school, “And say, ‘We can’t keep letting in this many people and charging them $50,000 a year when we can’t guarantee them jobs anymore.'”
The school declined to comment, and it’s worth noting that more students are likely to find jobs in the months leading up to and after graduation. “I don’t think J. Edgar Hoover could nail down solid numbers on this,” said another N.Y.U. law student, who graduated in 2010 and estimated that 20 of her friends didn’t have secure jobs (though some have found work since).
She’s bounced from working in a congressman’s office to an internship at a nonprofit, with a stipend from the law school that expires next month. “I turned down a scholarship” at a less prestigious school, she said. “Everyone said, ‘Don’t worry; you’ll pay it back in four years.'”
Stephen Younger, president of the New York State Bar Association, calls this crop of young associates “the lost generation.”
The Observer got an early glimpse of the association’s 112-page report on the future of the profession. “We are an advocate for the profession,” Mr. Younger said, “but we have to sound a wake-up call for our members.”
The report cites several cataclysmic shifts: swelling numbers of first-year associates; technology that can do what young lawyers once did; outsourcing of legal work (often to India); and clients’ demand for more accountable billing.
Other senior lawyers blame it on the kids these days, who want cushy salaries but aren’t willing to work 75-hour weeks. “So it failed their expectations of narcissism and entitlement,” said Scott Greenfield, a local defense attorney, who has a blog called Simple Justice. “All these low-self-esteemed tea cups want $160,000 jobs laid at their feet and don’t want to have to come into work. Now the promise of a wonderful life isn’t being fulfilled.”