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— Safe Harbor —
Like so much else that seemed to defy economic reality, summer programs have been hit hard by the economic crisis. A few law firms have canceled their 2009 programs, and several others -- Cravath, Swaine & Moore LLP; Gibson, Dunn & Crutcher LLP; Kirkland & Ellis LLP; and Shearman & Sterling LLP among them -- are reducing by a few weeks the time that summers can feed at the trough.
Things look even worse for next year. Many firms have deferred the
dates on which their incoming first-year associates may start work by
several months. Morgan, Lewis & Bockius LLP has told its
first-years to show up in fall 2010 rather than this fall. The firm
will pay each hire who opts for a public-interest job a $5,000 per
month stipend, which means Morgan Lewis will save not just $100,000 in
salary per hire, but the cost of benefits and training. Since the firm
will have a bunch of lawyers starting work in fall 2010, it warned this
year's summers that it will likely defer their start date to fall 2011.
In other words, Morgan Lewis won't need to hire any law students next
summer.
Let that sink in. No summer program in 2010. Over the last several years, Morgan Lewis has hired an average of 100 law students a summer, a small number given that the firm has about 1,400 lawyers. But those 100 bodies cost about $4 million in salary alone, with the firm spending millions more to recruit, interview and entertain them. (Morgan confirmed that it pays summers $3,410 a week in New York, but would not disclose other costs.) That's a large expense that Morgan Lewis -- and every other law firm in America -- could eliminate next year. Of course, firms could still send a few people to interview on campuses in the fall, and if the economy picks up by next winter they could review résumés and hire a handful of students. Even firms that will have summer programs next year will hire fewer lawyers. "We always want to hire the best people," says Howard Ellin, the hiring partner at Skadden, Arps, Slate, Meagher & Flom LLP in New York. "But if I had to make a decision today, we would expect to make a significant reduction in the number of offers we make to law students for the summer of 2010." The prospect that law firms could eliminate a significant cost from which they see no immediate benefit should terrify law students and the law schools to which they pay a hefty tuition. Law schools have constructed a hiring process that disadvantages law firms in two important ways. First, law firms hire students in the fall of their second year, two years before they will go to work as first-year associates. Moving interview season to the spring would allow the law firms to better assess their hiring needs. Second, law schools bar firms from making so-called exploding offers, ones that students must accept or reject within a given period, say a week or a month. That makes it harder for employers to manage their yield and has often led to overhiring. In the next few years, firms will very much want to avoid hiring more lawyers than they think they will need, meaning they will be less free with their offers. If they do end up with too many summers, law firms that have already laid off dozens of associates will be less reluctant to cull their summer associate classes. By allowing firms to manage their yield in an environment where they'd rather hire too few lawyers than too many, exploding offers may actually increase the number of students who get jobs. In any event, a student savvy enough to get a job with Skadden, Morgan Lewis or one of their ilk should be able to figure out whether to take the offer in a reasonable amount of time. David Marcus is senior writer at Corporate Control Alert. |
Law firm summer associates have long enjoyed one of the great boondoggles of the white-collar world. "Summers" are of no immediate value to their employers but make the same salary as first-year associates -- about $3,100 a week -- while being lavishly wined and dined. Firms offer permanent employment to virtually everyone they hire for the summer, which includes reimbursement for the bar exam and moving expenses. 
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