“I nanny in the afternoons. Yes, that is how I use my J.D.!” a 28-year-old woman wrote in an email to The Observer.
We met her last Friday at a West Village coffee shop filled with well-heeled bohemians sipping mid-morning lattes. The wistful Southern brunette rested one elbow on the table, a delicate engagement ring catching the sunlight. “I thought that at least if I was going to be changing diapers at the age of 28, it would be my own kids’.”
She graduated with a degree in history from a Virginia college and thought about becoming a teacher, but her dad pushed both of his daughters to get law degrees, advising them that a J.D. is always good to have.
Two generations of liberal arts majors have followed the same advice, pouring themselves by the thousands into the corporate-law grinder that began with admission to a three-year program, hopefully top-tier, and ended seven or eight years later with a partnership at a top New York firm or a soft landing as an in-house counsel.
Never mind the gargantuan law-school debt and the gruesome hours, the deadening due diligence and shameless rainmaking. You were in six-figure land from the word go, assured by your late 30s of a two-bedroom co-op, a summer share in the Hamptons and good private schools for the children. Pay your dues. Collect the hours. Wait your turn. It would come. It had for so many others for decades in New York.
Not so for the babies of the ’80s, coming of legal age during the greatest upheaval of the profession in memory. The last predictable path to prosperity in New York City is gone, as dead as traditional investment banking.
When our young J.D. arrived here from the University of South Carolina law school during the brutal economic freeze, she found a job at “the sketchiest firm ever,” made up of lawyers fired or left unemployed when their firms went under during the recession. She knew the end was coming because one week they told her: “We can’t pay you anymore.”
Her experience isn’t typical, she noted, because she wasn’t especially passionate about being a lawyer. Now she nannies part-time in Tribeca. Her fiancé, who went to a more highly regarded law school, found a job at a prestigious midtown firm and survived the most recent round of layoffs.
Like other bright young New Yorkers with two sets of letters after their names, they’re getting by, just not in the ways they thought they would be. Our young J.D. sometimes walks by the cluster of downtown Manhattan courthouses on her nannying rounds. “I see the lawyers with their binders and I think, ‘I could be doing that.’”
Lawyers in New York City are handmaidens to the masters of the universe. “We’re just the minions who paper up the deals for the millionaire hedge fund people,” said David Lat, a Yale Law School grad and founding editor of the Above the Law blog, describing the mentality. “You can be a partner at Skadden, and still be a piker in this town.”
But in the past 25 years, as investment banking became high-stakes gambling, law remained a civilized pursuit. By unspoken agreement, grads from good schools would make partner within seven or eight years, or the firm would make sure they landed a job at a midsize shop or as an in-house counsel for a respectable corporation.
“That social contract has changed,” said Steven Molo, a former litigation partner at Wall Street firm Shearman & Sterling, who left to start a litigation boutique. Now, he said, the thinking of a young associate is to stay for a few years and “make as much money as you can in the short term.”
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.”
When Mr. Greenfield graduated from New York Law School in 1982, he said the job market wasn’t great, but he apprenticed himself to a senior attorney. In his field, criminal defense, he said there’s still plenty of demand for young lawyers in small firms and solo practices. But: “They want the big-buck practice,” he said. “They don’t want to do what they call ‘shit law.’”
For those who flee the city in search of better career prospects and maybe a few hours a week of free time, the path is hardly easier. “Typically, you got recruited; you were taken
care of,” said a 27-year-old second-year associate at a firm in Stamford, Conn., who’s already been sent out to networking events to pass around his business card to potential clients. “They wouldn’t start pressuring you to get clients until your sixth or seventh year down the road. Now they’re saying, ‘Why aren’t you getting clients?’”
Or as a 2008 N.Y.U. grad, who moved back to Alabama after he lost his job at a New York firm, said of the alternatives: “It’s like telling someone to go be on an Arena Football League practice squad. You get beat up like a football player, but it’s not the same job.”
Experts, including the bar association in some cases, have called on firms to reevaluate hourly billing and reduce the number of first-year associates; meanwhile, law schools need to let in fewer students and give them a more honest picture of the job market.
But getting born winners to take stock of the losses isn’t easy.
“I don’t know that if we were to flick a switch and the economy were to pick up whether we would see any lessons applied there,” said Mr. Molo, the former partner at a huge Wall Street firm. “People would still be hiring 140 associates.”
He recently formed a boutique litigation firm, MoloLamken, which has grown to 13 lawyers and in 2010 argued three cases before the Supreme Court-and won each of them. With its model of flexible billing and significant mentoring, his firm could be a model, but he’s not convinced others will follow.
“Many people would view what we did in the short term as an economically irrational act,” he said. With partners at major law firms making in the seven figures, he said, “what holds a lot of people back is just inertia.”
The army of young cannibals, raised on whole wheat bread and pop psychology, has other plans. “If I could work 60 hours a week and get weekends off, I never would have left,” said a 28-year-old who spent a few years at one of the city’s top handful of firms but recently left to work for a hedge fund. “I know people who have had three kids and have never been at the birthday of any of their kids.”