February 1, 2010 6:20 PM
Jones Day Is Not Thrilled with the Proposed OCI Rules
Posted by Zach Lowe
The public comment period on the proposed new rules for summer associate recruiting is over, and though we haven't seen all of the responses, we're pretty confident no firm or school will oppose the proposed changes with the vigor of Jones Day.
To review: A 17-member commission (which dropped to 16 when Jones Day withdrew its representative) charged by the National Association for Law Placement with revamping 2L recruiting released its proposal for a new recruiting system in early January. The main prong of the proposal is a ban on firms making any offers to prospective summer associates until mid-January, just a few months before those 2Ls would begin their summers stints at firms. The idea, the commission said, was to slow down a process that had grown increasingly compressed as more schools raced to get their students in front of firm recruiters by scheduling on-campus interviews in August--before those students even started their second-year classes.
Even a few people who backed the commission's proposal told us they expected some constituents would take issue with a prohibition on making offers until January. But we're not sure they expected to be told that any such rule might constitute (among other things) a violation of antitrust laws. That's what Jones Day suggests in its response to the NALP commission's recommendation. "In any other industry, this would immediately be perceived as a restraint of trade," Jones Day hiring partner Gregory Shumaker writes in the letter, which reads at times like a call to eliminate any hiring guidelines in order to allow the free market to run unabated.
In the letter, Shumaker writes that law schools could band together and exclude from the interviewing process any firm that makes an offer before the January kick-off date. The possibility of such a "boycott" combined with a ban on pre-January offers might amount to a restraint of trade, the letter says.
To be clear, Jones Day is not the only entity opposed to the NALP commission's recommendations. We've heard from a dozen or so sources from firms and schools who have problems with the proposed timetable. The commission and NALP have already organized three conferences to discuss the recommendations, and about 250 participants have been on each of those calls, according to the sources we've talked to. Lowenstein Sandler, for instance, submitted its own letter saying the commission's proposed system would introduce "an assembly-line approach" that would cause "real harm to the legal community" and force firms and students to "sustain active recruiting efforts for a period of over six months." In other words, the August-January gap would mean that firms would either go several months without speaking to prospective summers after first interviewing them or institute a time-consuming schedule of repeat interviews, says Raymond Thek, chair of Lowenstein's recruiting committee. "We'd have to triple our staff" to wine and dine prospective summers over that length of time, Thek says.
We called Shumaker to get further thoughts on the NALP proposals and the Jones Day letter. In particular, we wondered what Shumaker meant when he wrote that firms that had laid off lawyers or deferred incoming associates would be more likely to support the pre-January ban on offers. Those firms, Shumaker wrote, "have damaged their reputations among law students and law schools and impaired their ability to recruit effectively under the historical on-campus interviewing framework." The proposed system delaying offers until January "is plainly an effort to level the playing field between firms that are prepared to move earlier on employment offers and those that would prefer to wait."
The argument Shumaker puts forth here rests on two main points, he says. The first is that some firms (in Shumaker's view) want to use the faster timetable of the current system as an excuse for deferrals and decisions to shrink summer classes. "They are embracing the notion that the recruiting system was flawed, and therefore they had to hire too many people and were forced to let these people go or defer them," Shumaker says. "It's a fallacy. A lot of these firms unloaded dozens and dozens of lawyers and now they are reporting record profits per partner. It's unseemly."
Shumaker's second point is that firms worried about their economics want to wait until January to make hiring decisions so that they can do so with a better idea of how the firm's books look. That's fine for those firms, Shumaker says, but that shouldn't mean that firms ready to make hiring decisions sooner should have to wait. The recommendations, Shumaker writes, "disadvantage the recruiting efforts of more stable firms in favor of firms that are less confident in their ability to manage their hiring practices effectively."
Strong words. And we expect to hear more strong words on all sides of this issue now that the public comment period, which closed on Jan. 29, is over. The commission and NALP will now begin the process of gathering all of this feedback and issuing a formal set of recommendations. James Leipold, NALP's executive director, declined to comment on the Jones Day letter when we contacted him today.
Expect much more on this in the coming days and weeks.Make a comment