Law firms inch back toward hiring mode

Still reeling from the effects of the recession, local law firms are cautiously dipping a toe back into the hiring market, but it could be years before employment activity returns to pre-recession levels.

Throughout 2009 and 2010, law firms here and nationwide coped with slackening demand for legal services as clients reeled in expenses. If they didn’t freeze their hiring altogether, firms curtailed it.

Now firms are signaling they may be inching their way back to normal. In a March survey conducted by California-based legal staffing firm Robert Half International, 29 percent of respondents said their firms would be hiring in the second quarter and none reported planned cuts.

Still, 58 percent of those surveyed said they would not hire in the second quarter.

It’s a sobering thought for the thousands of newly minted lawyers emerging from law schools this year.

“We’re not seeing the numbers pick up yet,” said Michael Keller, associate dean of career and professional development at the Indiana University Maurer School of Law. “[Hiring] is where it’s been the past couple of years.”

With law school attendance at an all-time high, attorneys have been coming out in droves since the recession hit. But the upcoming graduating class faces the steepest uphill battle, according to Keller.

“The class of 2011 may be the hardest hit by the economic downturn,” he said, noting that students graduating in the two previous years had time to develop relationships with law firms and nab offers before the recession really sank its teeth in.

Though most students still working toward their degrees are trying to remain focused on their studies and not the tepid job market, Keller said some are increasingly desperate and even depressed about their prospects.

Pie-in-the-sky hopes for a dream job at a major law firm are for the most part unrealistic, said Tom Hutchinson, a partner at Indianapolis-based Krieg DeVault LLP who oversees his firm’s recruiting committee.

“Students are having to adjust their expectations,” he said. This could mean a lower starting salary, longer hours or a job outside a top-tier city such as New York or Chicago.

“Students are much more willing to look at different markets, like Cincinnati or Indianapolis,” Hutchinson said.

Local law firms say salaries have changed little.

The lasting imprint of the recession could be a sea change in the way firms mine law schools for future lawyers. In the past, firms brought in large “classes” of summer interns, some of them with only one year of law school under their belts. Those class sizes were based on expectations of how many lawyers the firm would expect to add in the next two years.

Even amid the economic thaw, a lingering uncertainty has made firms more wary of long-term forecasts.

“For us, if there’s anything the recession did … we’re not as willing to project out the number of hires,” said Rob Gauss, deputy managing partner at Ice Miller LLP, the city’s third-largest law firm.

“We are already seeing there will be a shift in what has been traditional law school to summer employment to law firm employment in a straight-line fashion,” echoed Ice Miller partner and Personnel Committee Chairwoman Myra Selby. “The shift will probably be mostly in the timing. We may time the hiring of incoming lawyers a little differently and some firms … are discontinuing their summer programs.”

Ice Miller has kept its summer intern program intact, though the class size has been whittled to reflect the pressures of the recession.

“Our hiring in 2009-2010 was lower than in 2008, but we were still hiring in those years,” Gauss said. “We did not have the same experiences as other firms, whether locally or in other markets, where they deferred classes or rescinded offers.”

This summer, Ice Miller will employ seven or eight interns, about half of the usual 12 to 15 it accepted in the past. Overall, the firm employs 200 lawyers.

At Krieg DeVault, a firm of 140 attorneys, the summer program has been similarly trimmed from seven to three or four.

Summer programs are a key way of measuring hiring activity, and data from the past few years show just how much the recession spooked law firms and diminished on-campus recruiting. According to the National Association for Law Placement, a Washington, D.C.-based not-for-profit group, the median class size for summer programs in 2010 was four, down from six in 2009, and the smallest since NALP began collecting such data in 1993.

But overall, industry observers are tracking data that show a modest, yet encouraging, uptick in hiring. As part of its recent survey, NALP revealed that the number of summer interns receiving entry-level associate offers rebounded to 87 percent in 2010 from 69 percent the year before.•