June 1, 2011 2:11 PM

NALP Report: Law Grad Hiring Reaches Lowest Levels Since 1996

Posted by Julie Triedman

Law school graduates looking for signs of hope in the latest hiring numbers released by the National Association for Law Placement won't find many.

According to a report released on Wednesday, 2010 law school graduates faced the worst job market since 1996, when the legal market was still rebounding from the recession of the early 1990s.

Overall employment nine months after graduation stood at 87.6 percent, the lowest since 1996, when the rate was 87.4 percent. And the report notes that the overall number of "jobs taken"--legal and non-legal--by the class stood at 36,043, nearly identical to the "jobs taken" figure for 2009 (although the number of law graduates increased year to year). The class of 2010's hiring rate is four percentage points lower than a 20-year employment rate high of 91.9 percent in 2007, NALP reports.

The drop is not surprising, says NALP executive director James Leipold. It is largely attributable to two consecutive years of cutbacks in summer associate programs by the nation's largest law firms. Leipold notes that, prior to graduation, members of the class of 2010 faced steep cuts in summer associate hiring for 2L positions in 2009. That year, some 17 percent of large firms cancelled those summer programs entirely, while many others scaled back on summer hiring. Consequently, the pool of eligible full time, first year associate hires was correspondingly smaller, Leipold says.

One result has been that fewer graduates are entering private practice. For the past 30 years, 55 to 58 percent of new law graduates pursued private practice within nine months of graduation, Leipold notes. This past year, only a slight majority--50.9 percent--did so.

"That's a major interrruption" in past hiring patterns, Leipold says. Plus, as the NALP report notes, more of those entering private practice are going to smaller firms than in past years.

More surprising than the market's overall weakness, says Leipold, is the decline in jobs that require a JD; overall, only 68.4 percent of last year's grads landed jobs that required bar passage, the lowest percentage NALP has ever recorded. 

The drop in employment would have been even more severe for the class of 2010 if law schools had not created a variety of new employment opportunities for their graduates. Some 2.7 percent of graduates this past year got a job via a law school program. Without those jobs, the employment rate would have been about 85 percent, NALP reports.

Adding to the dire outlook, many more jobs than in previous years are part-time, temporary, or both--a major concern for graduates when almost a third of them are leaving law school with $120,000 in debt, according to a report released last January by Indiana University's Center for Postsecondary Research. Fewer than three-quarters of 2010 law grads who reported having a job as of February this year had obtained a position that was both full-time and permanent, the NALP report finds.

Given the scope of the legal market's contraction and the marked shift out of private practice and large law firms specifically, the class of 2011 isn't expected to have an easier time of it, NALP predicts. "It took till 1997 for the market to come back after the 1991 recession, and the consensus now is that big law firms aren't going to go back to hiring like they did before," Leipold says. An uptick isn't expected until the class of 2012, Leipold adds.

The bright spot, if there is one, is that fewer graduates this past year faced deferred start dates at law firms. Separate research from NALP concluded that the number of deferrals for the class of 2010 was roughly half what it was for the class of 2009; deferrals made during the peak recession years posed a problem for the class of 2009 as we described here.

NALP plans to issue a report on salary data in early July, and that data, Leipold says, is related to the jobs numbers released Wednesday. "I think we'll see salary data come down because the percent of those going to the biggest firms is much less," says Leipold.

 

Illustration: Getty Images/Neil Webb

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