Monday, March 16, 2009

No Offers?

Someone asked whether I truly believe there will be a lot of no offers in the 2009 summer class (i.e. fall 2010 starts), even at the top firms.  I believe there will be a lot of no offers, yes even at top firms. Perhaps less at the top 1-10; my view is that they will continue to hire who they perceive to be the very best students. Overall, though, most firms are going to be very carefully analyzing the performance of each summer associate.  In the past several years, pretty much the story has been as long as you didn't mess up significantly or piss off a big P, you would get an offer. In other words, it was kind of hard not to get an offer.  But, we are moving back to when I was a summer associate -- in those days, most of my class in my office did not get offers -- I am not sure what the deal was, I think the firm decided later they didn't need as many entering associates.

Here's the issue.   Most of the firms went out and did OCI as usual in fall 2008.  Sure we were more in the buyer's seat and had perhaps slightly smaller classes. But most of the firms did not perceive how dire things would get. Remember, mostly stealth layoffs at this time.  So, late fall came, offers out, offers accepted.  Around late December/Jan, the sky started to fall.  Firms going under, mass layoffs, delayed start dates, firms start to think why should we even have a summer program? Some cut the program.  Now we have these offers out for the summer and quite frankly the firms wish they could take them back.  Most don't even need all the people they have on the books, and they have the entering - formerly fall 2009 now winter 2010 to deal with.  The long and short of it is that most firms have overhired for summer 2009 and will really analyze the hires carefully.

This means that you will need to be stellar, and yes, I will go over that (some I have already covered). I just don't want to do too early because then people will be asking again in May.  The days of being assured that you will get an offer are over.  You are now fighting for an offer.  BE ON YOUR GAME.

Before I do start posting about the summer, please do ahead and review the posts from last summer when I started. There I was pointing out some basic dos and don'ts.  Of course, that is basic behavior.  Your substantive job performance and interactions must be impeccable.
And you've got to try to get work from areas that are perceived to have needs going forward.  

So in the meantime, a couple things:  keeps Google searches on your firm so you can see what is going on (comings, goings, big new clients, cases etc -- Google alert good for this).  This may help target "busy" groups.  Keep all your interactions with the HPs and recruiting staff on a professional, courteous (non-psycho) manner.  We know you are nervous, try not to relay the deer in the complete headlights approach.  Respond promptly and succinctly to communications.  Whenever I send Andrew a message about the summer and he gets back to me, without any angst, 1,2,3 answers the question or whatever, I think, this guy is good, no pain in the neck/entitled soul, doesn't need coddling, seems like a team player, easy to deal with.  Just my 2 cents.

Hang in there. 

17 comments:

Anonymous said...

I'm curious why firms would no-offer so many SAs. In my mind, it would make more sense to maybe no-offer a tiny bit more than usual, but not significantly, so that they do not hurt their recruiting efforts in the future.

No one knows what the Fall of 2010 will bring, and for firms that have small summer programs, it would seem foolish to not have some people in the wings ready to work at that time. Firms have a load of options if they end up being overstaffed. They can delay start dates, and conduct a few layoffs along the way, rather than do something so graphic as mass-no-offers.

Thoughts on my analysis HP?

Anonymous said...

6:49 - Unfortunately, there is just no way in which your scenario would work out. Here's why.

Let's assume the economy is somewhat recovered by Fall 2010. Firm X, which decided to give offers to everyone in its 2009 summer class, does not only have enough associates at that point, but in fact too many. So, they end up being overstaffed (as you predicted), and they decide to exercise the options you suggested - delay start dates, conduct layoffs, etc.

In short, the firm will be trying to unload people when the economy is (again, hypothetically) back on the upswing. Can you imagine how much more of a PR disaster it would be for that firm?

On the other hand, assume Fall 2010 still sucks. Firm X, who decided to take too many 2009 SAs, ends up having to announce yet another round of delayed start dates, layoffs, etc.

In short, regardless of the state of the economy, there is no scenario under which being over-optimistic in hiring can be a wise plan. You might say, "Well, they just have to do some projections to avoid over-hiring." But I guarantee you that even by this summer, no firm will be able to project accurately what they will need in Fall 2010.

Not giving out many offers this summer will be the norm, and there will be no significant stigma on firms who do that, because everybody else will be doing the same thing. And when they are ready to hire again, they'd rather be "the firm that's hiring" as opposed to being "the firm that overhired."

There are just so many experienced attorneys who have been laid off - if Fall 2010 turns out to be awesome, the firms won't need that much time to ramp up to meet client demand. Why would they preemptively keep a bunch of inexperienced law school grads in the wings, as opposed to hiring the experienced ones who've been laid off and are hungry for any paycheck?

And remember - these firms' allegiance and priorities lie with the people who PAY them - the clients. In this climate, every firm is going to (or should) try to show their clients that they are careful with spending - and that includes not bringing on too many inexperienced associates.

Anonymous said...

Dear HP,
Do you have any advice for what we 1Ls should do now to get ready for recruitment next fall? Since it sounds like summer associate positions will be difficult to get, should we target certain practice areas? Any advice you could give would be greatly appreciated.

Anonymous said...

7:23 - I understand you analysis, and I agree it makes sense for firms who have summer classes of 50+ for a few hundred person office. But for the firms who aren't as highly leveraged, I still think my analysis makes sense. If you only have say 10 SAs in a 150 person office, how much benefit is it to cut it down drastically? You aren't saving very much money, and wouldn't you rather be the firm that still had a high offer rate, even during a recession?

Maybe I am deluding myself out of hope.

Anonymous said...

I'm not sure I agree with HP. An offer to a summer associate costs a firm absolutely nothing for over a year. Might as well make the offer and then delay start dates by a few months or even a year (as firms have already done). I'm not sure there's even a PR hit: firms in the vaunted V10 are already doing this and 1Ls and 2Ls already know about it (see abovethelaw.com)


"Why would they preemptively keep a bunch of inexperienced law school grads in the wings, as opposed to hiring the experienced ones who've been laid off and are hungry for any paycheck?"

This line of logic has gotten firms in trouble in past recessions. They stop hiring first years with the expectation that there's a massive market of experienced and recently laid off attorneys ready to jump at a Biglaw offer. However, the reality is that in normal years the attrition rates for second to fourth year associates is extremely high (50-80 percent). Firms are overstaffed because attrition has disappeared. Attrition has disappeared due to lack of outside opportunities. When the economy recovers these laid off associates will take advantage of opportunities outside of Biglaw and normal attrition rates at big firms will return. Most laid off associates at Big firms would have left within 1-2 years anyway. Most people who've experienced Biglaw for a few years leave and don't come back.

f-3 said...

Employment rates are not expected to pick up significantly even in 2010, which means attrition rates will remain low perhaps into 2011. Therefore, I agree with the prediction that firms will reduce offer rates significantly this summer.

Look, we can speculate, and agree or disagree on all these predictions, but it's not going to change anything for the people who actually have to worry about getting a permanent offer, or change how firms actually feel about headcount. The only things we really should be focusing on are (1) what SAs should do to minimize chances of a no-offer to the extent that they can control it, and (2) because they can still get rejected through no fault of their own, what Plan B, Plan C, Plan D they should think about.

Anonymous said...

HP, what are your thoughts on 2Ls with summer gigs pursuing clerkships or LLM's in order to give themselves an extra year before starting in a firm? Would you look favorably on your summer associates if they were considering this?

Anonymous said...

OK, I am getting really pissed off at this "advice" I keep getting because it is getting me no where. I graduated law school last summer and still don't have a job. Everyone and their dog keeps telling me I should do volunteer LEGAL work to hone my skills and make me more marketable if the economy ever turns around.

PROBLEM: All I have is a JD and no experience. Non-profits are getting flooded with resumes from EXPERIENCED attorneys.
RESULT: Non-profits won't even let me work for them for free because they don't want to waste time training me and their malpractice insurance is cheaper without the likes of me.

Sorry if this is brash, but what the hell am I supposed to do. At least law firms have the decency (and the budget) to send out rejection letters. I NEED legal experience...so what can I do?

f-3 said...

This is really a very good time to build up traffic for this blog, when there are so many people craving some guidance and advice. But as people have said before, there needs to be regularity so that people don't lose faith. What happened to GP and DT? This seems like a delegation issue more than anything else - the more delegates you have, the more frequent the posts.

As the previous commentator has shown in his frustration, people have heard ad nauseum that they need to keep trying, keep their head down, network, etc. but these uncommon times call for uncommon advice too. Time to get more ideas and thoughts flowing from both the authors and commentators.

HP?

Cha said...

7:27 - are you just unemployed right now or working a non-law job? If I were you I would try to get a paralegal job or something else where you can use your legal skills in a law firm. Then, as the attorneys start trusting you they will probably give you more research assignments etc. Soon enough you will be doing legal work. Then you can have the chat about moving into an attorney position.

I am a 3L graduating w/ an offer at a new firm after working during the school year and summers as a paralegal that also did supervised legal work. I think its a good transition. It won't pay your loan bills but neither will being unemployed.

Anonymous said...

11:08, I actually tried that for a time, but most paralegal or legal secretary positions have the "JDs need not apply" language in their job posting. I think it's harder to get non-law jobs with a JD and a law license because we are viewed as flight-risks (rightly so).

Anonymous said...

Have you tried being a public defender? Have you tried hanging outside a courthouse and asking people who go there for DUIs, traffic tickets, etc. if they want a lawyer to represent them that day?

I heard you can make $ doing these things...

Anonymous said...

I'm still not sure if I'm buying that most very top firms will no-offer much more than usual. Most, if not all of them, make representations to candidates at some point during the courting process where they say they generally make offers to everyone. This statement, for example, is on Debevoise's webiste: "Each summer associate is hired with the expectation that we will be able to extend an offer to him/her to return as a full-time associate." I understand the word "expectation" is in there, but the general idea is that these firms represent themselves as giving offers to everyone during the 2L's decision-making process. It is partly because of this that I expect that no-offers at these firms will not jump up this year, its a bit like misrepresentation.

Also, I think no-offering someone now is significantly different than when you were in law school. Law school tuition has doubled over the past ten years, an increase much much higher than inflation. A significant amount of no-offers to people with 50k in debt will cause much less of an uproar than if they had 150-180k in debt as many do today. With that much to lose, and sites like ATL willing to publicize their plight, law firms are at least conscious of the fact that a significant uptick in no-offers could spell a PR disaster. If no offers were going to happen we would have seen more last year when several prominent firms, Cravath, White & Case, and Shearman, all drastically over-hired. But instead they defered to save fact. At the very worst I see a mostly normal offer rate this summer with deferrals in 2010, and many many fewer offers at OCI this fall to compensate.

Anonymous said...

Wow 5:48, where do I begin?

Law firms - yes, even big ones - are pushing back start dates even after they had originally communicated an earlier start-date to folks. The same law firms who said "we're done laying off people" last fall are now laying off people in second and third rounds. If you think some vague statement on their Web site is going to deter them from no-offering summers, you're seriously deluding yourself.

Law firms are going to protect their own people first. They are not going to pay attention to how much debt a summer associate will have a year or two from now.

As for the PR disaster that ensues? The only PR they care about right now is what they project to their clients who are paying their bills and keeping them afloat. I would not risk the wrath of these clients by continuing to send out offers to high-paid associates with little experience. If they need workers down the road, they have their pick of experienced, laid-off attorneys who are willing to work at a significant discount from their previous salaries.

Anonymous said...

law students need to stop thinking that law firms make business decisions with them in mind.

Anonymous said...

6:48 - If they didn't care about that type of PR Morgan Lewis would not have told its 2009 summers already that they would receive offers for 2011 (a one year deferral). How is that "protecting their own?" And I'm eager to hear an explanation for that move that does not involve saving their reputation with law students. Clearly Morgan Lewis will have their pick of associates in 2011 but instead they chose to preemptively defer this year's summers instead of no-offering them. Further, very top firms like S&C, Cravath, Davis Polk, Cleary, Weil etc. have not had layoffs yet even though it would undoubtedly make short term business sense for them to do so. They still care about their reputations and they will this summer.

- 5:48

f-3 said...

I still don't understand the utility of trying to predict what law firms will do at the end of the summer, especially since we'll find out in a matter of months. What people predict now will not change the fact that summers have to assume offers are not automatic, associates have to assume that no paycheck is automatic, and partners have to assume that no piece of business is automatic. You don't get a bigger prize for accurately predicting the offer rate. Sounds corny - but just focus on what you can actually plan for and control, and that's your work quality and your reputation.