NY Bar Mulls Task Force to Study Legal Job Market

07/16/12

In a legal job market where after nine months from graduation only 55% of the class of 2011 is into jobs that require a law degree and far fewer candidates are into jobs that require an attorney, bar associations are obviously alarmed. Other bar associations have been conducting their own studies and a few have come up with findings that indicate that recession, law schools, and technological developments in e-discovery and record-keeping bear equal parts of the blame.

However, the NY bar being one of the leading bar associations in the country (the Wall Street advantage): when the NY bar is trying to investigate what’s gone wrong with the legal job market, – we do expect interest as well as results. It gives hope that may be a solution would be found to restore the supply-demand balance to pre-recession times and alleviate the pressures on soon-to-be-homeless law graduates saddled with non-dischargeable debts.

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According to the Wall Street Journal, the new task force being formed by the NY bar association to investigate the maladies of the legal job market includes representatives from the New York County District Attorney’s Office, from the Legal Aid Society, from businesses like Pfizer Inc., from top law firms like Skadden, and from academia like the Harvard Law School. The group is expected to convene in September for the first time, and it has been given the task of isolating the causes of the job shortage and make recommendations within a year.

Carey R. Dunne, the new president of the NY Bar Association, and chairman of the litigation practice at Davis Polk, told the WSJ that “This isn’t just a hand-wringing exercise” and he expects results to be definitive.

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The drastic situation in the legal job market was in direct response to the economic recession when companies and law firm clients, as well as law firms, were forced to ‘optimize’ their operating models and maximize cost-benefit ratios in order to survive. Firms like Dewey, which did not try to optimize, but gambled in non-traditional fashion to achieve business growth have suffered hugely, gone into bankruptcy, and only escalated the pressures on an already weak legal job market.

However, the economic recession only forced businesses to rethink their relations vis-à-vis lawyers and law firms, and made those grievances explicit that were already implicit. Corporate clients have begun to create streamlined in-house legal departments with results measurable by and accountable to standard business metrics. There has been a rise in alternative billing models, like flat-fee (fat-free?) structures that shift away from the traditional billable hours model practiced by law firms. There has been a rise in legal staffing companies and temporary law jobs with rates as low as $25-$30 an hour to review documents. E-discovery companies are using modern software to do the work that needed armies of associates. The new graduate out of law school is also out of traditional document review and discovery work that used to pay hundreds of dollars for the hour.

Meanwhile, law-school tuition has continued to escalate, with law school graduates filing lawsuits against their schools accusing them of tampering with data and misrepresenting the actual state of the legal job market or their standing within it.

However, Mr. Dunne said such finger-pointing was myopic in nature, and one of the purposes of the task force was to have exchange of information and perspectives between the components of the legal job market. He said the focus until now has been constricted to include only large firms and top law schools, but “A different story needs to be told at the other levels of the market.”