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Kai Ryssdal: Just as students across the country are settling into their classes, right around now new lawyers at big firms are settling into their first jobs. Most of those first-year associates have known for at least a year, and some of ’em even two, where they’d be working. Big firms start recruiting way before graduation so they can lock in the best talent. Or that’s the way it used to work until the recession hit.
With business drying up, some firms have found they can’t afford to hire everyone they had promised jobs to. And so the legal profession is rethinking its old-fashioned way of doing things. Ashley Milne-Tyte reports.
ASHLEY MILNE-TYTE: Bill Urquhart is a partner at law firm Quinn Emanuel Urquhart Oliver and Hedges in Los Angeles. He went to Harvard Law School in August to recruit students for his firm’s 2010 summer associate program. But Urquhart says he didn’t have the usual competition from rival firms. Those that did show up interviewed fewer candidates. He says for the first time in years, law students, even from the country’s top schools, can’t guarantee their futures.
BILL URQUHART: They’re freaked out. The whole situation is uh, something that they can’t get their hands around and don’t understand completely. They’re very frightened.
They’ve seen what happened to the class of 2009. Many of those students had jobs set up, only to be told their firms couldn’t afford to take them on this fall. Many firms have deferred start-dates to next year or beyond. Others have put new associates on half pay and asked them to do pro-bono work.
Orrick is a global law firm that works with financial institutions and other big companies. CEO Ralph Baxter says when the economy fell apart, Orrick’s business dropped quite a bit. So the firm didn’t hire any new lawyers this year. And it probably won’t hire any in the U.S. next year. He says the bad economy is forcing law firms to re-think the way they do things: including the practice of committing to young associates almost two years ahead of their start dates. And locking in raises.
RALPH BAXTER: Law firms are so wedded to tradition. I mean we’re trained in tradition. We’re trained to follow precedent, we’ve done it this way all these years, we are comfortable with it. Oh my goodness, we can’t change. And it’s nonsense. Of course we can change.
One big change Orrick has made is ending the hallowed practice of lockstep: that’s when firms promote associates at the same pace, giving lawyers matching raises each year, regardless of whether they do a good or bad job. Baxter says Orrick’s lawyers are now promoted the same way other workers are.
BAXTER: They will not earn more money unless they deserve it. And that means we won’t be passing additional cost along to the client, unless the lawyer is in fact able to deliver better, greater service.
Some firms have gone even further. Richard Ripley is a partner at Howrey, a law firm in Washington D.C. His firm has cut the number of hours first-year lawyers need to bill. It’s also bolstered training, and ended lockstep. Ripley says clients are demanding efficiency, now more than ever.
RICHARD RIPLEY: What this economy has done, what I’ve seen, is that our clients are carefully looking at how many lawyers are on a case, who’s doing what type of work, and can the work be pushed down to someone that is more junior.
And thus cheaper. Joel Henning is a consultant to the legal profession. He says it’s high time law firms behaved more like other businesses. But he’s afraid they may return to their spendthrift ways once the economy rebounds.
JOEL HENNING: I think that once we get business more robust and clients are screaming for legal services, that law firms will be screaming for the bodies they need in order to provide the services and all bets will be off.
Except perhaps those made by clients. Now they’ve gotten used to getting more for their money, they may not be willing to settle for anything else.
I’m Ashley Milne-Tyte for Marketplace.
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