There’s a War in the Legal Job Market: Why Should You Care?

Summary: The law profession and the industry are undergoing change. That change includes more automation and technology and perhaps fewer jobs. This article explores the current job market and where it and the industry are most likely going.

• The law profession and its industry are changing. Learn who benefits and who suffers with these changes.
• Law firm hiring trends are also changing. Law school enrollments are being greatly affected.
• Automation and technology are improving the quality of work and the profession, especially for clients; for others it may be more difficult, especially for young lawyers starting their careers.
• Many traditional tasks are changing making experience more of a premium now than ever before.

The State of the Law Job Market
It may be a small(er) world after all

A new paradigm in law is coming, and it’s the result of new trends hitting the profession and the practice of law itself: Among those are fewer law school graduates, fewer jobs, and the growing range of automation and technology in legal services. Like any progress or change in industries or even social systems, there are always winners and losers—usually, it’s few that win and many more losing. Such is how social systems usually work—there’ll always be losers.

Just as there’ll always be opportunities in law for grads with Juris Doctors (JD) from Harvard, Yale, and Stanford: such are the protections of privilege. They’ll always find security and top-paying work after graduation. For the rest, the prospects may likely be different—dramatically so.

Bernard Burk, a former professor at the University of North Carolina School of Law, had some prognostications on the coming entry-level law jobs market. He said it will be 25% smaller that it was 10 years ago, and this is even in the midst of a strong economy. Jobs should be expected to “grow roughly proportionate to the gross domestic product, which is basically flat.” He believes there’s no reason to believe that the numbers will even increase with the growth in the economy, which is roughly 2% a year. Nor will there be any lawyer shortages anytime soon.

Be cruel to your school

In 2010, 20% of law graduates were working jobs that didn’t require a law license. Only 40% were working in law firms, down from 60% from the class a decade earlier. To meet expenses, these grads were accepting a variety of jobs, some that didn’t require admission to the bar. Many have taken temporary and other work they say they are reluctant to put on their résumés for fear of diminishing their prestige and employability at law firms. Others struck out with solo practices. Most grads had substantial student debt (85% of graduates have taken out loans; average debt: $145,550). Growing numbers of students were failing to receive job offers from the firms they had interned with and others had offers rescinded; fewer firms recruited at college campuses. New graduates are also often competing with third- and fourth-year associates who’ve been laid off.

Many new graduates are now considering other options, like an MBA, as the more fruitful path.

What does this mean for the state of the legal job market? Like most things, it depends on whom you ask.

With fewer law school graduates—law schools in the U.S. graduated nearly 10% fewer students in 2015 than in 2010—both law firms and law schools have been re-evaluating their positions, in part because of economic realities and in part because the shrinking availability of legal jobs. Also, in 2010-2015 there was a significant drop in law school enrollments with 2017 being the first year gains were seen again.

No longer so soft on the Firm

Recruiters are seeing more candidates that are not choosing to pursue law firm jobs or stay with a firm. And though big firms may still pursue recent law school graduates with big money offers, for many of those entering the profession, there’s a growing attitude among young associates that they may only work long enough to pay of their law school debt, and even take an in-house job—which will pay less than the law firm of their dreams—and then leave. The profession, it appears, has a serious and growing reputation problem. The days of tolerance for the long hours, rote assignments handed out often on the whims of partners, and the unreasonable demands on associates seems to be wearing thin.

Why is this happening?

• Changing market dynamics: clients pushing for use of junior—and less expensive–lawyers, alternative staffing models, and the use of artificial intelligence and technology. The irony is that there are going to be fewer opportunities for junior lawyers. Expect more roles for support staff.
• Law firms are promoting increasingly fewer associates to partner.
• Diversity imperative: Doing the right thing comes at a price for the privileged class; clients have demanded more diversity and firms are responding (slowly but inevitably) and the result is even more competition for fewer law jobs. Still, bias remains. Statistics show that minorities and women leave their firms throughout their careers at a much higher rate than the overall average and this, in part, may be due to traditional “assignment and mentoring” practices that firms use to reinforce unconscious bias against diverse lawyers.

According to a study by the ABA Journal, changes to the legal profession job market have gone beyond law firms.

A breakdown for the year-over-year percentage decreases in jobs for the class of 2017 by type:

• Academia: -18%
• Business and industry: -15.4%
• Government: -5.7%
• Law firms: -2.3%
• Clerkships: -1.9%
• Public interest: -1.2%

When it’s time for Boomers to go quietly

For law firms, there’s a struggle for aging Boomers in the process of succession planning and implementation. Clients may feel loyalty to an attorney that has represented them and performed their legal work over the years. In this way, law firms are often unique. Studies have shown that law firms have nearly 35% of their business tied to lawyers that are over the age of 60. Firms have had challenges transitioning these clients to the firm’s more junior lawyers.

This is largely a result of origination-based compensation models used at most firms. Who receives credit for business becomes particularly significant around review, bonus, and making partner time. The senior lawyers are reluctant to transition their work or their client relationship, even for the good of the firm. It also presents an obstacle for creating incentives for up-and-coming lawyers. The result can be that younger lawyers become more apt to leave the firm or leave private practice altogether. When the retiring attorney leaves the firm, so do the clients in many cases. The firm loses all around.

What’s a firm to do?

Whether it’s small law firm recruiting or Big Law, here’s what any firm with a commitment to finding new and quality talent can do:

Referrals: Firms can utilize a variety of approaches. Traditionally, legal recruiters, job boards, and word-of-mouth networks have been the logical first step in finding new attorneys.

What is often overlooked is that the top source of quality hires, almost of all hires, is in-house referrals. This is more than third party websites and even more than online job boards. To undertake professional development, some companies are creating programs to tap into this resource. Referred employees are faster to hire, perform better, more native to the culture, and likely to stay longer.

This also seems to be the industry’s best kept secret. Aside from claims of recruiters that employee referrals are the top source of their best hires, companies and firms are allocating very little of the budgets to referral programs. The bulk of their talent development spending still goes to traditional channels like postings to job boards and staffing agencies.

Branding: Another overlooked resource is employer branding. Most firms spend little and have even less interest in considering it. Yet, 80% of business leaders believe in its critical importance. For both candidates and legal recruiters, company culture is the most significant way for a company to stand out from its competitors—a firm’s long view vision is seen as more important than perks and a firm’s reputation. One reason branding tends to be undervalued is that data for it is hard to come by. Branding ROI is difficult to measure and most companies can’t show a direct correlation between a stronger candidate development approach and branding efforts.

Both referrals and employer branding are often described as one of the most important factors in finding and retaining talent and yet it’s often an area of underappreciation and underinvestment.

The changes ahead: Demographics

• Age: Although, the Boomers have long gone grayhead, they’re not leaving so fast. Many are delaying retirement for financial and personal reasons. Though their time may be nigh as they’re aging out by necessity—for those born between 1946 and 1955, they’re either 70 or soon will be.
• Attitude: Career attitudes and loyalties are changing. Too many have experienced layoffs, reorganizations and corporate buyouts and mergers, failed startups, and in the process loyalty on both sides has eroded. (For employees, you could say it was well-earned.) Corporate culture has fundamentally changed and Silicon Valley (and technology in general) helped. Employees have re-evaluated the value of staying with one organization for a long time. Professionals who would change jobs every 4 to 5 years had, until recently, been seen by human resources professionals as a liability. Conventional wisdom now is that if you don’t change jobs every few years, you’re not dynamic and growing. The perception is that you haven’t been exposed to different ideas, philosophies, and cultures. People are moving around more than ever before.
• Adultlets: The Boomers give them a lot of grief but Millennials are the future and their influence is real. (And really, can they do any worse than the Boomers?) Millennials aren’t here for the Boomers and their approach can be very different. They’re focused on gaining different experiences quickly and moving up in their careers. Whatever Millennials are, they’re no doubt a reflection of the instant-information culture that they came of age in. Their age is one that can accomplish things in a much shorter time—than even 10 years ago.

Automation & Tech: Fire or fired?

Because law isn’t like other businesses, it’s traditionally been immune from many of the changes that have faced other industries. But even that’s changing now: technology and automation are having profound effects on how the industry works and how the public is using it:

• Online startups like LegalZoom, Avvo, and LawDingo, many which also match clients with lawyers, are now automating “low-level lawyerly tasks.” This doesn’t just affect research, but also contracts and wills and other tasks.
• Once a meticulous page-by-page human task 20 years ago, much of the discovery process is now becoming automated and routinized. “E-discovery” tools are quickly getting better and more sophisticated which further reduces the need for a professional lawyer.
• Automation is helping to make lawyers within big firms more productive, but it’s also reducing the need to bring in first-year lawyers which further exacerbates the demand for first-year associates.
• Despite the automation of some client work, no one thinks technology will make lawyers obsolete, but it could have the result of reducing the number of opportunities for lawyers in the future.

For those contemplating future law careers, automation does have an upside: lawyers will be able to practice law at the “top of their license.” They’ll be able to concentrate on higher-value work making the work they do more interesting. Plus, there’s an upside for consumers: The lower-value work will be more accurate and far less costly. It’s been argued that an estimated 70% to 80% of every hour billed by lawyers may not require a law license.

Expect the talent imperative for law firms to be in a period of change in the coming years. These changes, and the law firm staff model that goes with it, will require changes that will affect both the Goliaths and Davids of the industry—and only expect more challenges ahead.

About Harrison Barnes

Harrison Barnes is the founder of BCG Attorney Search and a successful legal recruiter. Harrison is extremely committed to and passionate about the profession of legal placement. His firm BCG Attorney Search has placed thousands of attorneys. BCG Attorney Search works with attorneys to dramatically improve their careers by leaving no stone unturned in job searches and bringing out the very best in them. Harrison has placed the leaders of the nation’s top law firms, and countless associates who have gone on to lead the nation’s top law firms. There are very few firms Harrison has not made placements with. Harrison’s writings about attorney careers and placements attract millions of reads each year. He coaches and consults with law firms about how to dramatically improve their recruiting and retention efforts. His company, LawCrossing, has been ranked on the Inc. 500 twice. For more information, please visit Harrison Barnes’ bio.

About HiringPartner

HiringPartner is a data-driven recruiting and applicant tracking system. Hiring Partner delivers the intuitive, integrated management tool you need, while maximizing your attraction of top talent through our exclusive network.

There are many job boards, applicant tracking systems, and ways to recruit law firm attorneys out there—but there is only one Hiring Partner. Hiring Partner is the most powerful legal recruiting tool ever for law firms. In other words, Hiring Partner is not just an organizational tool, but also a talent magnet. For more information, please visit https://www.hiringpartner.com/