In this week's Large Numbers of Law, we take a look at a strange phenomenon going on in the legal employment market. Any young lawyer knows that these days it's hard to find work.
68.4% - That's how much of the class of 2010 was able to find a job requiring bar passage.
64.0% - 2010 grads with full time jobs requiring bar passage.
A large number of law school graduates are not finding job as lawyers, and many of those finding work are in part time or temporary positions. That's not really a phenomenon though, that's just a bad economy. Where things get weird is while recent grads are struggling to find jobs, law firms are struggling to find people to hire.
49% - Large law firms with difficulty hiring skilled associates, particularly in litigation, real estate, employment, and corporate law.
How can you have a bunch of people looking for jobs, and a bunch of firms looking for lawyers, and both sides being unsatisfied? Simple. The skill sets don't match up. Firms want experienced attorneys, and recent graduates only know about the fee tail and promissory estoppel.
50.9% - 2010 grads finding jobs at law firms (compare to 55.9% for the class of 2009).
53% - 2010 grads with law firm jobs working at firms with 50 or fewer attorneys (compare to 46% for the class of 2009).
With entry level legal hiring still in a slump, more attorneys are headed to government positions, non-profits, and small firms. An ugly truth that law schools don't like to admit is that legal experience is not a widely transferable skills. Handling a quickie divorce doesn't train you to work on a multimillion dollar bankruptcy. Insurance defense doesn't train you to handle a securities fraud claim. Dog bite suits don't prepare you to set up an international private equity deal.
What we're left with is a smaller number of recent graduates finding any work at all, many being stuck in temporary or part time jobs where their experience gain will be stunted, and of the people working full time, an increasing number are gaining experience that isn't relevant to larger firms.
We'll add to all that just one more kick in the pants:
20% - In-house counsel that refuse to staff first and second year associates on some matters.
Even if you do happen to land that big firm job, there matters you're permitted to work on is shrinking, so even people at the top are getting less of the experience law firms are looking for.
"It’s a bargain made throughout the generations that has served democracy and capitalism well."
Those are the words of K&L Gates chairman Peter Kalis discussing firms not wanting to staff junior associates. Though junior associates have lower billing rates that midlevels, they spend far more time doing the same work, making junior associates ultimately more expensive. Add to that the cost of having a midlevel review their work, and the bills quickly pile up.
Kalis argues that clients should suck it up and pay the bills anyways, precisely because of all that mess discussed up above. Experienced midlevels do not materialize out of thin air, they have to be trained. He's hoping that clients will realize that overpaying for a first or second year now will ultimately benefit them years down the line by creating a cohort of talented midlevel and senior associates.
Invest in the future, take one for the team, think of the greater good.
36 - Associates laid off by K&L Gates in 2009.
4.9% - Percentage of associates those 36 represent.
Facing tightening belts, K&L Gates decided it would rather can a large number of junior associates than keep them on board during the lean times. Sure, there wasn't a whole lot of work for them to do, but they could gain experience by sitting in on meetings, doing pro bono work, looking over the work done by other people, attending in-house training, and a whole host of other activities that wouldn't be billed to a client, but would still give them experience.
What did K&L Gates do instead? They said "Fuck the bargain, fuck the generations. Sacrifice is for clients, who might not even use that attorney they're investing in ever again anyways. We're just their employer, it's not our job to pay for their training. I got a summer home to pay for, yo."
$755 million - K&L Gates 2007 revenue.
$959.5 million - K&L Gates 2008 revenue.
$1,039 million - K&L Gates 2009 revenue.
$1,060 million - K&L Gates 2010 revenue.
Of course, gross revenue doesn't paint a complete picture. Staffing levels change, there's differences in overhead...
$855,000 - K&L Gates 2008 profits per partner.
$930,000 - K&L Gates 2010 profits per partner.
Oh, snap.
K&L Gates isn't at all unique.
5,820 - Lawyers laid off from Big Law from January 2008 to November 2010.
Over the same period, just like K&L Gates, many firms posted increases to both gross revenue and profits per partner.
[Clients find junior associates aren't worth it.]
[Firms complain about lack of talent.]
