For new law school grads, the job outlook is still bleak

After sending out hundreds of applications, Tony Chiaramonte landed a clerkship in Texas. But hiring has flattened at many law firms. CLEM MURRAY / Staff Photographer
After sending out hundreds of applications, Tony Chiaramonte landed a clerkship in Texas. But hiring has flattened at many law firms. CLEM MURRAY / Staff Photographer
Posted: June 04, 2012

Tony Chiaramonte, a Drexel University law school graduate, is one of the fortunate ones.

He landed a coveted clerkship with the Texas Court of Criminal Appeals in Austin at the start of his third year in school. To get the job, which he will start in September, Chiaramonte sent out 200 to 300 applications.

Total yield? Two return calls.

"I think I hit every state," said Chiaramonte, 29, who graduated May 17. "I was not discriminating against any state."

Even as a robust employment market has emerged for lawyers with several years’ experience, a sobering new reality awaits this year’s crop of law school graduates: The market for those fresh out of school has rebounded only slightly from its recessionary lows and remains very weak.

Big law firms in Philadelphia and across the nation report that hiring of graduates is well down from its peak of just a few years ago, when legal work was plentiful and firms competed for first-year lawyers. This year, firms are showing a little more flexibility in hiring summer interns and first-year lawyers, but the change is incremental. Most important, law-firm leaders who once hoped that the hiring of young lawyers would return to its past peak now say it will likely stay down for years.

The struggling economy, continuing downward pressure on rates, and insistence by clients that their matters be staffed with experienced lawyers all are playing roles.

"I have a stack of resumes on my desk and a number of phone calls that I have put off making," said Stephen A. Madva, managing partner of the Center City firm Montgomery McCracken Walker & Rhoads L.L.P.

In years past, the firm brought in eight or nine new graduates each fall and hosted a class of about a dozen summer interns. This year, Madva doesn’t anticipate hiring any first years, and the firm has only two summer interns. Instead, it has been recruiting lawyers with several years’ experience and established client relationships.

"Our clients are not willing to pay us to train [young lawyers], and the numbers in the firm now are a pretty good match to the amount of work we have," he said.

Most law schools still are collecting employment data on this year’s graduates, so the best information available is for the job search of last year’s class. Figures compiled through February showed that, except for graduates of the very top schools, a great number of law school graduates hadn’t found jobs as lawyers.

Law schools say they expect this year’s results to be about the same. The hiring plans of law firms back up that assessment.

"It is not so terribly different from the way it has been for the past few years," said Drexel law school dean Roger Dennis. "We are about even in absolute numbers with last year, and our sense is that the quality of the jobs is somewhat up."

Yet it is an extremely tough market. Through Feb. 15, Drexel reported that 57 of its 131 graduates had full-time permanent work as lawyers, with nine more employed in full-time jobs in which a law school education was deemed to be an advantage. Others had found work in non-law jobs, while 17 still were looking for jobs.

At Villanova University, 132 graduates out of 252 were employed full time as lawyers, with 19 more in full-time jobs for which a law degree was an advantage. Fifty-nine graduates still were seeking employment at the time of the survey’s conclusion.

At Temple, 177 graduates were employed full time as lawyers out of total of 319 graduates, while 32 had full-time jobs in which a law degree was considered an advantage although not required. About 18 were without jobs.

Even for graduates of the University of Pennsylvania law school, who typically enjoy a high rate of success, the battered economy has exacted a price. The overwhelming majority of last year’s class found employment, 95 percent of the 274 graduates. Yet there was a slight downward trend in the number of graduates employed in sought-after jobs with big firms, those with 500 or more lawyers. That number went down from 152 in 2008 to 125 last year, even though the class size had gone up.

The city’s major law firms report hiring plans that track closely with the law-school statistics. Drinker Biddle & Reath L.L.P. will take on 23 first-year lawyers in the fall, up from 19 in 2010, when the legal world was still adjusting to the financial collapse, but still down from 37 in 2009. Schnader Harrison Segal & Lewis L.L.P. plans to hire three first-year lawyers in the fall, down from nine in 2009.

Cozen O’Connor has increased its hiring of first years slightly, from 13 in 2009 to 19 this year, but for a 575-lawyer firm, its program is relatively small.

Though big firms remain highly profitable, it has come in part through severe cost-cutting and layoffs. At the same time, competition among firms for work has sharpened, placing even greater pressure on hourly billing rates. The unraveling of New York-based Dewey & LeBoeuf, which filed for bankruptcy Tuesday, reinforced the idea that the business remains fragile. Dewey once was a global powerhouse.

"The Dewey collapse put a chill in the air and fear in people’s hearts," said James Leipold, executive director of the National Association for Law Placement, which tracks the legal-employment market.

This deep anxiety appears not to be a momentary blip. In a survey of managing partners and chairmen at 238 U.S.-based law firms conducted in March and April, Altman Weil, a Newtown Square-based legal-consulting firm, reported that those firm leaders overwhelmingly said the profession faced long-term financial pressures, and that firms would adjust, in part, by outsourcing work and hiring fewer inexperienced lawyers.

About 55 percent of respondents said they expected that smaller classes of first-year lawyers had become a permanent trend; in 2009, just over 10 percent said they anticipated hiring fewer new law school graduates. There were similarly large increases in respondents who said they expected that outsourcing of legal work, hiring of more contract lawyers, and lower law-firm profits all were part of the new normal.

"The prerecession associate-hiring binge is over, replaced by much more cautious and conservative hiring policies," Altman Weil said.

With such a grim employment market, it likely helped that Chiaramonte, who plans a career in public-interest law, kept a positive outlook. When he started his job search, he didn’t focus on the odds, and he was willing to go anywhere.

"I felt I would go wherever the job was," he said. "I was pretty lucky, and this job came around."

Contact Chris Mondics at 215-854-5957 or cmondics@phillynews.com

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