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Podcast Episode CurrentEconEnvironment

The Current Economic Environment

What It Means to Law School Applicants and Students

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It’s no surprise that, during a recession, the legal job market tightens and legal employment is harder to find. Big Law firms that once snapped up students and law school graduates are laying-off lawyers, reducing associate class size or deferring the start dates for students with accepted job offers. Legal employers are changing the ways they recruit lawyers and the way they do business. Meanwhile, the tough times are steering more applicants to law school. What does this mean to currently enrolled law students, law school applicants and freshly-minted law school graduates? We interviewed law school deans of admission, financial aid and career services, the Executive Director at NALP and the writer for the Wall Street Journal who covers notable trends in the legal market for the business community, to get their advice on what can be done to navigate one’s career and application during these challenging times.

Guests include:

  • Jason Wu Trujillo, Senior Assistant Dean for Admissions and Financial Aid, The University of Virginia Law School
  • Johann Lee, Assistant Dean of Admissions and Financial Aid, Northwestern University Law School
  • Kevin Donovan, Senior Assistant Dean for Career Services, The University of Virginia Law School
  • Carole Montgomery, Director of the Career Development Office at The George Washington University Law School
  • Jim Leipold, Executive Director at NALP, National Association for Law Placement
  • Ashby Jones, The Law Blog at the Wall Street Journal

Transcription:

Welcome to Law School Podcaster, your source for inside information and advice on the law school application process. I’m Diana Jordan. Current economic conditions are significantly changing the landscape for law school students and applicants, as well as for graduates who are landing in an uncertain market. The tightening of the legal job market means that students are finding fewer Big Law firm job opportunities and they are also facing cuts in grants and funding that have slowed down public sector hiring. At the same time, in what seems like a defiance of logic, law school applications are up as more and more people consider law school a good bet for riding out a tough economy. In this show, The Current Economic Environment: What It Means to Law School Applicants and Students, we will explore the new reality, potential trends and how you might best position your legal career in light of these changes. In this segment, deans of admission, career services deans, a journalist and other experts will address the tightened job market, the financial issues, timing, and they will offer advice for applicants and students who will navigate their career during these tough economic times and other aspects of the current economic environment.

One of the key questions during these challenging times is what does the current economic climate mean to currently enrolled law students, law school applicants and freshly minted law school graduates? We asked Jim Leipold, the Executive Director at NALP, National Association for Law Placement, a nearly 30-year-old non-profit, serving the needs of all those involved in the legal employment process. Jim? “It means among other things that the folks finishing law school right now have to work a little bit harder at getting a job than did their colleagues who graduated a few years before.”

Jim, you say that a law school degree is still a valuable preparation for entering the market place. What do you mean by that? “Over the long haul, the market for new lawyers coming out of law school has been remarkably strong and steady. The current recession has certainly had a dramatic impact and it’s had an impact across all sectors but it’s hit hardest probably the largest law firms whose practices where the most closely tied to the financial sector and, in particular, firms in New York City. And also public practice settings that require public funding or grant funding. Those are the two areas that have had the most dramatic slowdown. In fact, there’s a lot of firms positioned in the middle that have thrived during the recession, in part because they have lower cost for offering legal services to corporations. And, at a time, when “Corporate America” has been trying to save money on their legal spend, some of the middle-tier law firms have actually been using this economic recession to grow and hire more lawyers.”

Ashby Jones writes the Law Blog at the Wall Street Journal. What do you think the impact is on students, applicants, and graduates, Ashby? “People who are just graduating, many of them, if they don’t already have jobs lined up are really struggling. I mean, really having a tough time finding work and especially those students who are coming out of the more elite schools, who typically don’t have any trouble placing their students into the top law firms. Law students who are currently in school, they’re still trying to get jobs for subsequent summers. That’s proving to be a little bit challenging as well. Law firms across the country have slashed their summer programs and that’s making those jobs a lot harder to get. Although I think those people have a little bit more hope that, within a year, year and a half, by the time they get out of school, the market will have changed significantly for the better and they’ll have an easier time of it. Now for people going into law school, I’m sure a lot of people are heading in with a bit of trepidation at this point, but it’s hard to know exactly where the market’s going to be three years from now, so I’m not sure that they should be losing a lot of sleep over it right now. The thing, however, I should mention about law school and hiring is that it all happens in advance to a degree that a lot of people find sort of absurd. A lot of times, the job that you get after your second year is the job that you wind up going to about a year and a half later, at the end after you graduate and take the bar exam. And so everything happens pretty early so it’s not exactly like the people entering law school right now can sit around and wait three years until the market changes to worry about a job. They’re going to have to start figuring it out if not this year, next year. They’ve got about a year and a half, maybe two years, before things might turn around.”

Carole Montgomery is Director of the Career Development Office at The George Washington University Law School. Carole, do you think this is a crises or an opportunity? “It can be a crisis if you are already $90,000 in debt with undergraduate. Now, you’re going to, depending on where you go to law school, you’re going to incur anywhere between $70,000 and $150,000, so you know that right now is something that you do need to think about, but I think the timing is also good because people that didn’t necessarily consider doing good, and by that, I mean public interest, government, non-profit, this is an opportunity to really think about that. You know, sometimes, they get swayed by the, “Oh, so many graduates from that law school go to Big Law.” Well, that’s not going to be true this year. What I hope it is doing is getting them to think about why am I applying to law school? What do I want to do? And then recognize that they will have to work to get a job. They’re going to have to make as many contacts as they can. And the good news about that is these are skills throughout your career that you’re going to use. If you come in with the right mindset, you know, this is a tough market, there are still some jobs out there, but as long as your expectations are reasonable, I think that makes a big difference.”

Ashby, what’s your opinion, crisis or opportunity? “Law firms are sort of trying to rethink the way they do business, rethink the way they hire people, rethink the way they pay their employees, pay their associates, compensate their partners et cetera, sort of everything that has been the textbook way that law firms run themselves is being reshaped and rethought right now, so it is sort of a crisis point and inflection point and law firms are having to adjust to it. How does that affect the current law student? For the most part, it is a challenge, it is a moment of crisis, but in crisis arises opportunity often. It’s just a matter of knowing where to look and knowing what opportunities are going to attract you.”

Jim, what is NALP’s perspective in regard to Big Law firms who are reportedly withdrawing job offers or postponing hiring? “For members of the class of 2008, who graduated and took the bar, they entered the job market just before things slowed down and then, as they entered the job market, sort of the industry collapsed and many of them lost their jobs. You have members of class of 2009 who took the bar this summer, who in many cases had offers but those offers are deferred for a year. And then you have people who just finished their summer programs now and are waiting for an offer for the following year. Those three classes are sort of all colliding in the market place and all are trying to enter law firms at the same time. And as a result, I think law firms have just seen that they need to almost put recruiting on hold for a little while until they see where this settles, when the economy is going to pick up, what sort of work they have. And so for people who would have normally gone through the on-campus interview program this fall, some firms are saying, “We’re just not going to be able to recruit from your class.” Others are saying “We’re going to recruit but it’s going to have to be later in the year. Come back to us in the spring when we have a better sense of where things are going.” So they’re not so much withdrawing from the recruiting process but delaying it, hoping to get a better sense of what their own situation will be financially.

Kevin Donovan is Senior Assistant Dean for Career Services at the University of Virginia Law School. Kevin, what do you say to students who have received start date deferrals or other changes after they’ve already accepted offers from the law firms? “If the law student believes that they have made a strong connection with a firm that is a fundamentally strong firm and it’s a good match, the culture and the feel of the place feel right to them and the practice area fits them, then we’ve encouraged them to try to be flexible and to work with the law firm going forward. Because the long view is that their trying to make a lasting connection with the firm and find a place to begin to build that practice and have their career, and they need to look beyond the fact that the times now are very difficult.”

Dean Carole Montgomery, at George Washington, what is your view on the job market? “It’s a little tougher than it has been in the past, absolutely. I’m not going to pretend that it isn’t. There’s a lot of laterals on the market, second, third, fourth year associates who’ve been laid off so there’s a lot of competition. Even though nobody really wants to do temp work, sometimes you do it. That’s drying up and the government and public service jobs are a lot more competitive now, but they are not all impossible and, you know, there’s so much to say for face-to-face time. And one of the examples I can give you is one of the large firms who said, we are not going to extend any permanent offers this year to the 2L summers because the present year’s class we’re deferring, so we have no need so we’re not going to extend any offers. But one of my students actually, first of all, networked his way into getting the 2L summer position and they made an exception and they gave him the permanent offer. So I really can’t put enough stress on that. If they’re willing to work for it, there are still jobs there.”

Jim, we’re hearing that on-campus interviewing is down. What does NALP observe on campuses? “The overall volume is down and it varies, you know, from school to school. The number of employers coming to campus is smaller and employers that are coming to campus, in general, are hosting fewer schedules and seeing fewer students than they have in the past.”

At the same time, we are hearing that number of law school applications is rising. At the University of Virginia Law School, Jason Trujillo is Senior Assistant Dean for Admissions and Financial Aid. Jason. “We experienced a 20% increase in the number of applications received this year. Interestingly, the national average is only up about 6%, so not all of our increase was due to the economy. I will say anecdotally however there were a lot more personal statements this year talking about how they were laid off from their job or they saw the writing on the wall. They thought they were getting laid off from their job. They always wanted to go to law school and this presented a natural opportunity for them.”

At Northwestern Law, Johann Lee, the Assistant Dean of Admissions and Financial Aid is also seeing an increase. Johann, what is your take on students who say, “I just lost my job so I might as well go to law school now?” “If they thought about going to law school for quite a while, and they know what lawyers do on a day-in-day-out basis, then it should definitely be a step that they should take. What I’ve seen is that a lot of folks don’t really think about exactly what lawyers do on a day-in-day-out basis. They look at going to law school as a place to sort of hideout while the economy recovers, and the fact of the matter is it’s a pretty demanding profession, so if you don’t go into it you know completely convinced that this is what you want to do for a living, then the end results usually aren’t too good. And I’m not talking from a job or economic standpoint; I’m just talking from a happiness standpoint.”

Ashby Jones at the Wall Street Journal, what do you think about going to law school during the tough economy? “They’re going to a graduate to a legal world that looks a little bit different than the way its looked for the last 50 years or so, but it will probably provide a good number of opportunities for people so I don’t necessarily think it’s a bad strategy to go to law school. However, I should say that I think a lot of people go to law school for the wrong reasons. They go to law school because they think it will lend them, sort of, an instant air of prestige. They can come out and say they are a lawyer. Typically, if you go to an elite school, you can come out and get a high-paying job at a law firm. Those, even when the job market is good, aren’t necessarily the right reasons to go to law school nor do they necessarily lend themselves to a life of happiness, as a lot of sort of disgruntled lawyers will tell you. But, nevertheless, I think for people who are interested in the law, who want to be lawyers, now is not a bad time to do it because the economy is tough and so it’s not a bad place to hide out for a few years.”

Jim, you say that the legal economy is a financial creature that follows the national economy; it will pick up, but there is uncertainty about what the hiring needs will be and how long after the economic recovery employment will pick up. What else should law students know? “I think it’s going to be a tight job market for a number of years but I think as the economy recovers, corporations have to turn to law firms almost first thing if they want to do a deal, if they want to launch a new company, if they want to have a merger, if they want to do any number of things. And so, the legal work does follow as the national economy picks up and the jobs will, in turn, follow that. I think the biggest problem for law students who are graduating right now will be figuring out how to manage their debt, among other things, until such time as they can find a job and enter the economy. So I think careful financial planning is going to be really important.”

Dean Montgomery at George Washington, what do law students and graduates need to know now? “For the currently enrolled students and new graduates, they need to adjust their expectations. They need to think outside the box. They need to be more flexible about the type of practice and the geographic location. They need to understand that they may have to consider, and remember I’m uniquely situated because I’m in D.C., so some of these opportunities may be more plentiful here, but they need to think about non-legal jobs like a project manager or a contract specialist that will gain them skills that they can sell later to legal employers when the market picks up. Above all, they need to market themselves and their skills and here comes the word that all of them hate, network, network, network. Days of clicking and uploading your resume to get a job are gone. You need to make contacts now that are going to help you later. And most important, do use your career services, offices. They are free and we do have a lot of employment information.”

How is the recession affecting the school’s ability to help students finance their law school education? Johann Lee is Assistant Dean of Admissions and Financial Aid at Northwestern. Dean, what’s going on at your school? “We’re evaluating the amount of scholarships and grants that we give out. We’re evaluating the different loan products that are available and frankly, the number of loan products and the types of loan products that are available are changing pretty much on a weekly to monthly basis, so we’re definitely evaluating and taking stock in that situation. And then hopefully, we’re also evaluating what the job prospects and employment prospects are of our student’s post graduation, and right now, they’re still pretty good, but we look at all three of those items together as well as our loan repayment program, which we’re currently evaluating in order to determine the best way for our students to be able to pay for their legal education.”

There is uncertain financing, less government assistance and some schools are cutting back on financial aid, what does it look like at Virginia? “This is a school by school issue. At Virginia, we have not cut financial aid. We’ve cut spending on travel. We’ve cut spending on print brochures, for example, but we did not cut financial aid. If anything, financial aid is even more important in these tough economic times.”

What about inside the classroom? Kevin Donovan with Career Services, is the current economic climate forcing law schools to change their curriculum at Virginia? “There’s really been a focus by a lot of corporate clients that we’ve heard about, and that I experienced as a practitioner. Focusing on the competencies and readiness of junior lawyers and so the law schools, I think, are trying to address that by providing more training on kind of fundamental competencies in addition to the scholarly training, you know, that happened before. So at Virginia, I mean Virginia is now over five years into its law and business program that focuses very heavily on kind of the fundamentals of business for people who want a corporate practice. It also has over 20 clinical programs. That’s a great opportunity for students to get more hands on experience, and then you’re also seeing schools incorporate classes that focus on presentation skills and negotiating and those types of basic competencies that go beyond just the academic disciplines themselves.”

Dean Montgomery at GW, are law schools changing their curriculum to adapt to a changing economy on legal market? “We increased like by one clinic, but I think a lot of the schools are increasing their actual hands-on clinical training as well as, what we call it, outside placement but externships, where students can do internships or unpaid opportunities and get school credits for it, so I think those things are on the rise.”

Jim, you say we are going to a time of experimentation. What is NALP observing? “In a way, things got so bad that firms were freed up from looking over their shoulder to see what the other firms were doing and it allowed them to try some new things. So we’re seeing some firms, for instance, implement what they’re calling apprenticeship programs where they’re bringing students on in the first year at a much lower salary but also with a much lower expectation in terms of billable hours and they’re devoting more of that first year to training. We’re seeing some firms lower their starting salaries and others not. We’re seeing some firms say, “We’re going to skip our summer program and just hire laterally. We’re not going to take first year law students right out of school. We’re going to wait and just grow our firm laterally.” So I think what that means is that, where in the recent past, law firms, particularly large law firms, have tended to all do the same thing in almost a knee-jerk way and salaries have coalesced very quickly around the common number and recruiting practices have coalesced very quickly around common practices. I think what we’re going to see going forward is more diversity of practice in all of these areas and I actually think that’s healthy. So you’ll have firms that compete with each other some of whom have apprenticeship programs, some of whom don’t; some of whom offer a starting salary of 160, some of whom offer starting salary that’s considerably lower, some of whom abandon a model of hiring first year new associates and others who continued to have traditional summer programs followed by first year associates. In the training and development arena, you see some law firms leaving this lock step model where each year you automatically get a promotion and moving to a more merit based, competency based system. And so you may or may not progress from year to year. All of those things were beginning to happen before the recession for a number of reasons but the recession accelerated most of those changes and I think will support those changes. I think, over time, we’ll see more firms drift toward recruiting later so, rather than the focus being on students as they return to school in the beginning of their second year, recruiting will probably begin to happen later in the second year, whether that’s late Fall or early Spring, and there too, different firms may choose to recruit at different times. So students are just going to have to be prepared for a much broader range of practices and understanding for each firm that they’re interested in what course that firm is choosing.”

Dean Donovan, from a Career Services perspective, you’re advising existing law school students to be broadminded in their search this year. What do you mean by that? “To think creatively about the types of initial career options that they would consider and not to lose heart. Our students are coming out exceptionally qualified for the market place, even in a tough market place, and so we continuing to see the majority of our students getting strong interest from the firms, but we still are encouraging everyone to look beyond that and to reach out to a broader group, to consider clerkships and to consider other positions, possibly public interest positions or government positions that would enhance their credentials if their goal is a law firm job and they don’t immediately receive one during the interview process.”

Dean Montgomery, what can students and graduates do to navigate their career and application during these tough times? “First of all, really have a good idea of why you are going to law school. I don’t mean that you have to know exactly what practice area you want, but when I get a student that sits down and says, “You know, I really hate research and writing.” Are you kidding me? That’s what lawyers do, so make sure you have a grasp of what lawyers really do and talk to practicing lawyers and see what their day-to-day is like. They can set themselves apart by marketing and doing really well at unpaid internships or other positions. The best experience in the world is doing an unpaid internship in a government agency or a public interest organization or those types of things because they can’t afford to hire the number of people they need, therefore their interns are doing really substantive work and you can’t put a monetary value on that, so they should be prepared to do some unpaid internships. And again, my favorite word, ‘network.’ And make sure all your materials that you are submitting for a job are perfect. And I encourage everybody, contact alumni of your law school. They’re very pleased to say ‘I had a great time at whatever their law school is and here’s the things I think you should do when you go to law school, so take advantage of that.’”

Ashby Jones at the Wall Street Journal, what advice do you have for students and recent grads? “Keep your options as open as you can and keep your thinking about where you want your career to go as flexible as possible. There’s nothing wrong with taking, maybe, a lower-paying government job. There’s nothing wrong with taking, maybe, a public interest job for a while. There’s nothing even wrong with taking a lower-paying or maybe unpaid internship for a period of time and that can certainly be good resume fodder as well. You’ve got to be tenacious. You’ve got to hustle. You’ve got to send letters. You’ve got to call to follow up and geographically, even you know, even just not domestically but internationally also, you hear stories about lawyers going to work in India and to work overseas, and I don’t necessarily think that’s a bad way to go at all. And so I think it’s mostly a matter of being diligent, being tenacious and being open minded to maybe a broader range of ideas and possibilities than one might have been when one entered law school.”

Dean Donovan, you’re on the front line at career services at UVA Law School. Do you see any hope? “There are segments of the legal services market that remain strong and our goal has been to try to help our students find their way through to those so that those who seek a law firm job and are not able to make a connection to “Big Law,” they are still able to find a professionally fulfilling opportunity in the law firm world.”

Let’s look to the future. Dean Montgomery, do you think the recession has changed the legal employment environment permanently? “I hope so. Big Law has over hired for years. Some of them have already done some things like instead of deferring, they’re going to give their newest entry-level associates a year-long training program or whatever. I’m hoping that it does change but it’s going to be market driven. I know that clients, for example, some of them are now doing what we call flat fees for services instead of hourly fees so that means I’ll give you $1 million to do this merger and acquisition or whatever it is, that’s it, bottom line. This is what I’m going to pay you instead of the hourly. Therefore, I think they have to change their hiring because their revenue stream is going to be different.”

There is a silver lining to the recession. Ashby, at the Wall Street Journal, what are you seeing? “There are still practice areas that are in demand now and are going to be in great demand down the line. You think of intellectual property, copyright, trademark and patent law, that’s not going anywhere any time soon. I think that, as a specialty, it’s only going to grow. And it’s only going to get bigger. It’s only going to get more internationally focused, that is one example of a practice area – could be one that students give some thought too. I think also we’re going to see more regulation, frankly, in this country at least, and then also over in Europe and probably in other parts of the world as well. We’re going to see an increased amount of financial regulation. We’re going to see, certainly with this administration, we’re already seeing other types of regulation being contemplated and being put into effect. And so I think regulatory law could be an area that not necessarily benefits from recession, but continues to do well on the future. So you know, and there are other practice areas like that too. So for every practice like structure finance or like M & A right now, mergers and acquisitions that are a bit in the doldrums, there are other opportunities and other areas. Students, I think, just have to be a little bit savvy about figuring out what they are and figuring out if that is a practice area that interests them.”

There is advice for law school applicants, students and graduates. Dean Trujillo with admissions at UVA Law School, what do you have for current students? “My advice to current students, is diversify your skill set. People say diversification is great in investments. Well, it’s also great in investing in their human capital. You want to be more flexible and more diversified in your skill set than you have before, and that’s the best advice I can give.”

And Dean Donovan, what are your words of wisdom? “Stay positive. Take the long view. Don’t give up. You’re receiving exceptional training and skills and you are as strong a candidate as you would have been if the economy was bad, and so go out positive, optimistic and forward looking and just committed to working your way through this process.”

Dean Lee, please tell us your perspective? “There was this thought that these huge law firm jobs were just growing on trees right outside the law school, you just go outside and you pick whatever job that you wanted. Now, it’s more like your regular job market. You have to work a little bit at it but still, the opportunities are still available. So in the end, it just means a little more due diligence is involved as a law school applicant but in the end, the careers are still out there. The sky isn’t falling really.”

Jim, as head of NALP, what advice do you have? “Hang in there. It is a very stressful thing when you’re graduating and can’t find a job and I would encourage students to think about being self-aware and developing a support network for themselves and trying to figure out how to stay positive while they’re looking for work because they have a great education, a great skill set and they will find work as the economy returns.”

Dean Lee, any other wisdom for law school students? “Law school is a professional school, it’s very similar to medical school but no one ever goes to medical school without thinking about what it means to be a doctor. Well, a lot of people go to law school without thinking what it means to be an attorney. They don’t go through that particular due diligence. So I think, as an applicant, definitely I’d think about what it means to go to law school. For those who are graduating or have graduated or on their third year, the fact of the matter is in the end, it will all work out. If you went to law school with a passion for the law, those opportunities are still available out there, so be patient. It will all work out.”

It’s no surprise. The recession presents new challenges and more competition than ever for current students and for recent law school graduates, facing the prospect of securing legal employment. This means that students and graduates, and even law school applicants, have to more carefully than ever consider what their goals and expectations are for practicing law and for how they want to begin their legal careers. Our experts from law school admissions offices, career offices, NALP and the Wall Street Journal have given you their perspective, indicating that, while there may be changes in the hiring of Big Law firms, there are nevertheless opportunities available in new and developing fields, in the public sector, and at midsize and smaller law firms. Networking, our experts tell us, is more important ever, and they also advise applicants and students to research and use the resources of law school alumni networks and career services offices. While you may have to work harder and dig deeper to find jobs, they are out there and it helps to start thinking about why you want to go to law school and what type of lawyer you might want to be before you even apply. This type of due diligence helps applicants and students set reasonable goals and to then tailor their job search to fit those goals. In the end, our experts all say that, in the long haul, a law degree is still a valuable preparation for entering the marketplace and there is good reason for optimism.

For more information, a transcript of the show, or to register to receive more Law School Podcasts, visit www.lawschoolpodcaster.com. This is Law School Podcaster. I’m Diana Jordan. Thanks for listening and stay tuned next time when we explore another topic of interest to help you succeed in the law school application process and beyond. Look for us on Twitter and Facebook to get the latest news and insight into the world of law school.

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