Las Vegas Sun

February 16, 2019

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In down economy, a tough way to start a legal living

Law firms are hiring fewer new lawyers and cutting starting salaries

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Chris Morris

Beyond the Sun

The recession is making it tougher on law school graduates who expected to jump into a new career.

Following a national trend, some Las Vegas law firms have cut back on hiring, delayed start dates in other cases and trimmed salaries.

Firms have even cut the number of clerks they hired over the summer and are planning to do so again next summer. Those clerkships often lead to permanent jobs.

“We know other firms have done what the bigger firms have done, which is deferring people from being hired,” Nevada State Bar President Kathleen England said. “We also know that a lot of firms that had very numerous and vibrant summer associates positions — when you hire them between their first and second year in law school and second and third years of law school — that they cut way back. That is normally where big firms would hire their associates. They are trying to spend money more wisely and be more efficient.”

Byron Francis, managing partner for Armstrong Teasdale in Southern Nevada, said neither the Las Vegas nor Reno office had any clerks over the summer, but they are eyeing some for next year. The only new hire in the firm is in the St. Louis office and that person’s start date was pushed back until Jan. 1, he said.

“Hopefully with the economy turning around, we will be back to the same basic hiring we have done in the past,” Francis said. “It has been a tough time for young law students. It is the first time in my memory there has been this type of hiring attitude out there, and it’s nationwide.”

Francis said he has heard about firms cutting salaries of new hires from $110,000 to $100,000. It’s an understandable move, he added.

“Everyone is trying to deal with the level of business that is down,” Francis said. “I think the brunt is being taken across the board. When it comes to the slowdown, how much work do you have in the law firm to support this number of lawyers. I think everyone is feeling it.”

Paul Hejmanowski, managing partner at Lionel Sawyer & Collins, said no one was hired this fall and the summer program was reduced, but no decision has been made on future offers.

“We have been basically kind of cautious in our hiring approach right now because of the uncertainty in the economy,” Hejmanowski said. “When you have an organization, you only hire when you anticipate you are going to grow. (A recovery) does not seem to be on the immediate horizon.”

At Snell & Wilmer, administrative partner Patrick Byrne said the firm shortened its summer associate program from 12 weeks to eight as a cost-cutting measure. The two associates were extended offers to work next year after they graduate, he said.

The firm, however, has even pushed back the start date of three new hires, one to the first week of November and the other two until early December. Normally, they start after Labor Day. In addition, some starting salaries were also trimmed.

“We did our best to meet the competition on salaries,” Byrne said. “It is a reflection of the market and the rates we can capture. We are getting our costs in line for what is appropriate for the market and what the economy allows us to do. That is not unlike what other firms are doing.”

Byrne said the firm has been fairly busy, but it’s looking at the future. The economy for many clients is difficult, and he doesn’t expect a quick recovery.

Byrne said he expects more competition for government jobs such as district attorneys, city attorneys and clerkships that some law students would otherwise not have been interested in because of the limited hiring by private firms.

“It is a tough time to be a law student,” Byrne said. “The national firms are cutting back on hiring, and the number of opportunities for students at the top of the class has been reduced. There is going to be a ripple effect, and people who came out in 2009 will be completing against people in 2010. This will make it difficult for new lawyers.”

The legal market often lags the nation as a whole and the effect will likely be felt even more next year, Byrne said. Raising salaries in 2007 looks silly in hindsight, and that trickles down to new hires, he added.

“Lawyers have had an unprecedented run of salary increases across the country, but that run is over,” Byrne said.

Not everyone said they had to stop hiring new graduates.

George Ogilvie III, managing partner of McDonald Carano Wilson, said it hasn’t curtailed its summer program or hiring practices.

“I don’t think Las Vegas’ legal community has been affected by the economic downturn as the legal industry across the country has,” Ogilvie said.

Thomas Ryan, managing partner at Lewis & Roca, said his firm might be an exception as well. It had five summer clerks and extended offers to all five. Three have accepted for next year and one recent UNLV graduate joined the firm this week.

The firm, however, has encouraged summer associates to consider judicial clerkships as an option for next year, Ryan said.

“That way we don’t have so many planes on the runway trying to take off at the same time,” he said.

Ryan admits it’s a tough market for new lawyers, and understands why firms have delayed start dates, offered incentives to stay away and even revoked offers.

“I think it is designed to help the law firm get through this tough economic cycle,” Ryan said.

Terry Coffing, managing partner at Marquis & Aurbach, said the recession has played a role in encouraging summer associates to seek judicial clerkships and get more experience before they accept a job at the firm. It traditionally makes offers to 80 percent of the summer clerks. Two of three clerks accepted offers made a year ago, he said.

Coffing said he has heard of local firms revoking offers and doesn’t think it will get better soon.

“It is going to be tough for them in the next year because a lot of experienced attorneys are looking for work,” Coffing said. “That obviously creates a lot of pressure on the new folks.”

It’s the out-of-state firms that are facing the biggest problems because they have higher billing rates, he said. That has led to aggressive pricing and created opportunities for firms that didn’t have high hourly rates.

Cynthia Asher, director of career services at UNLV’s. Boyd Law School, said the school is hosting fewer firms looking to hire summer associates or graduates. The school is in its fall interviewing season.

Asher said she has heard students say firms are pushing back start dates this fall by a few months or even a year.

It’s too soon to say what will happen with the summer associate program.

“It is premature at this point. Some are hiring equal numbers to last year, and some ... declined to participate, but will touch base in the spring,” Asher said. “They are waiting to see what happens with the economy. We don’t know what they will do in the spring.”

Boyd Law School Dean John White said there will be more competition for jobs because a lot of coastal firms aren’t hiring that traditionally get placements from West Coast law schools. That will prompt law schools in California, for example, to try and place students in Las Vegas. He said it will be difficult, however, for them to make inroads in this community.

“Some firms hire only the top students,” White said. “There will be more competition now at every level.”

The bulk of Boyd graduates stay in Las Vegas or go to Northern Nevada, Phoenix or Utah, he said.

The good news is that fewer people took the bar exam in 2009 than in 2008. The State Bar of Nevada reported that 386 took the exam in July, down from 436 in July 2008. In February, 264 took it, down from 313 in February 2008.

“Does that reflect that (experienced lawyers) who practice in California and probably think our streets are paved with gold now think that this is not the place to move to or is this first-time takers (coming in lower percentages)?” England said. “We haven’t drilled down into those numbers to know the trend.”

The decision by firms to cut back on hiring is prompting more people just out of school to consider opening their own practice, England said. That’s a concern because they will be overwhelmed by the prospects, she said.

“It is hard enough practicing law,” England said. “It is really hard to practice law and run a business at the same time ... Unlike a normal businessperson, if you went out and opened a 7-Eleven, you would have payroll account and general account and you have to comply with all the licensing fees. If you are a lawyer, you have a lot more things to do.”

Coffing said there is always a percentage of new graduates who strike out on their own, but called that a “dangerous game” for them to play.

“Law school in many respects doesn’t prepare you to be a good practicing attorney,” Coffing said. “To be thrown into that environment without any type of mentoring or guidance, I can’t imagine.”

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