The market for entry-level associates at law firms has stabilized, according
to the March 2003 edition of Patterns & Practices: Measures of Law Firm
Hiring, Leverage & Billable Hours (a Review of Patterns & Practices in
2002), an annual publication from NALP. Law firms increased entry-level
hiring by 3.7% from 2000-2001 and projected a decrease of 2.2% from 2001 to
2002. Just the opposite occurred in small firms, however, as hiring declined
3.4% between 2000 and 2001, but was expected to increase by 9% from 2001 to
2002. Also, employers had projected that their entry-level hiring would increase
by 10.7% between 2000 and 2001 (see the prior edition of Patterns &
Practices) but in fact the increase turned out to be 3.7%.
Using information drawn from the two most recent editions of the NALP
Directory of Legal Employers, Patterns & Practices provides
expansive documentation of the hiring of entry-level associates, summer
associates, and lateral attorneys at over 1,000 law offices representing over
600 major law firms nationwide. NALP's unique access to such broad coverage over
time makes Patterns & Practices the premier source for valuable
perspectives on hiring at the national, state, regional, and city level.
Distinct regional differences in hiring are evident. The market was strongest
in the Southeast region, with a 2.3% increase expected in entry-level hiring. In
the West and Mid-Atlantic regions in contrast, entry-level hiring was expected
to decrease by 7.6% and 4.2%, respectively. In the Northeast and Midwest very
little change was expected.
- Among the cities which collectively expected to hire at least 100
entry-level associates in 2002, changes from 2001 ranged from -23.7% in San Jose
to 15% in Dallas. In some cities, the change from 2001 to 2002 is very different
from the change from 2000 to 2001. For example, firms in Boston expected to hire
13% fewer entry-level associates in 2002 compared with 2001; from 2000 to 2001
hiring increased 6.8%. Firms in Minneapolis, on the other hand, expected an 11%
increase from 2001 to 2002, after a decrease of 2.3% in the prior period.
- Lateral hiring was off dramatically (-27.8%) between 2000 and 2001,
resulting in firms hiring in aggregate slightly fewer laterals than entry-level
attorneys in 2001, compared with hiring 38% more laterals than entry-level
attorneys in 2000.
- Lateral hiring decreased across all firm sizes, with a 34% decrease in the
largest firms, compared with a decrease of about half that, 18.7% at firms of
fewer than 100 attorneys. On an aggregate basis, smaller firms hire more
laterals compared to entry-level attorneys than do larger firms, with a ratio of
1.27:1 in firms of less than 100, and a ratio of 0.76:1 in the largest firms.
Among larger cities (again, those whose firms collectively hired more than 100
laterals in 2001), hiring was off in all except Detroit, Dallas and Houston. In
the San Jose area, lateral hiring was off by almost 75%, and it was off by
nearly half in many other cities, such as Boston, San Francisco, and Seattle.
Patterns & Practices documents other findings, including:
- Nationwide, 86.5% of second-year summer associates considered for
an associate offer received an offer. This ranged from about 81% in firms of 100
or fewer attorneys to about 90% in firms of more than 500 attorneys. At the city
level, in Austin 61% of 2001 summer associates considered for an offer received
an offer; in New York City and Pittsburgh, nearly all (about 96%) of summer
associates did so.
- In 2002, firms on average employed slightly more associates than partners,
for a ratio of 1.16:1. Large firms are typically more highly leveraged, with a
ratio of 1.62:1. Smaller firms, in contrast, employ fewer associates than
partners. On a city-by-city basis, these figures ranged from 0.54:1 in Detroit
to 2.43:1 in the San Jose area.
- Although billable hour requirements ranged from 1,445 to 2,160
hours per year in 2001, most offices reporting a minimum require either 1,900 or
1,800 hours (22.6% and 21.6% of offices, respectively). Contrary to its
reputation, New York City firms do not necessarily set the highest minimums.
Although 28% of New York offices required 2,000 billable hours, more firms in
Austin, Chicago, and Miami did so, 33%, 39%, and 40%, respectively. In the San
Jose area, most offices required either 1,900 or 1,950 hours; in Miami, most
firms required either 1,900 or 2,000 hours. In contrast, half or more of the
offices in Denver, Hartford, Portland, OR and Seattle set their billable
requirements at less than 1,900 hours per year.
- With respect to actual billable hours worked, about 26% of offices reported
an average of fewer than 1,800 hours per year, and about 19% reported an average
exceeding 1,950 hours per year. About 58% of firms of 501+ attorneys reported
that attorneys averaged more than 1,850 billable hours; for firms of 250 or
fewer attorneys, the figure was 45%.
In addition to documenting nationwide and regional hiring trends, the
120-page report presents detailed information on entry-level and lateral hiring,
offers, leverage ratios, and billable hours for 32 cities and 7 states,
including:
Cities - Atlanta, Austin, Boston, Charlotte, Chicago, Cincinnati,
Cleveland, Columbus, Dallas, Denver, Detroit, Hartford, Houston, Kansas City,
Los Angeles, Miami, Milwaukee, Minneapolis/St. Paul, New York City, Northern
Virginia, Orange County California, Philadelphia, Phoenix, Pittsburgh, Portland,
Oregon, Raleigh/Durham, San Diego, San Francisco, San Jose area, Seattle,
Tampa/St. Petersburg, and Washington, DC.
States - California (outside Los Angeles, Orange County, San Diego,
San Francisco, and the San Jose area), Florida (outside Miami and Tampa/St.
Petersburg), Missouri (outside of Kansas City), New Jersey, New York (outside
New York City), and Virginia (outside of Northern Virginia.)
Hiring Trends, 2000-2002
|
# Hired in 2000 |
# Hired in 2001 |
# Expected to be hired in 2002 |
% Change 2000-2001 |
% Change 2001-2002 |
# Offices reporting |
Entry-level associates |
8,229 |
8,536 |
8,352 |
3.7 |
-2.2 |
1,046 |
Second-year summer associates |
10,502 |
11,172 |
9,677 |
6.4 |
-13.4 |
1,091 |
Lateral Hiring, 2000 and 2001
# Hired in 2000 |
# Hired in 2001 |
% Change 2000-2001 |
# of Laterals Hired for Each Entry-Level Associate Hired
2000 |
# of Laterals Hired for Each Entry-Level Associate Hired
2001 |
# Offices Reporting |
12,217 |
8,817 |
-27.8 |
1.38 |
0.96 |
1,172 |
|