Mind Your Business

The COVID-19 consequence: Emerging talent is at risk

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BigLaw firms that hire graduating law students utilize a synchronized approach dependent on a pipeline of talent identified two years prior to graduation. Interviews for summer positions are conducted in the summer before students begins their second year of law school, offers are made and accepted within two months, and the summer class is set for the following year.

That summer class constitutes the vast percentage of the incoming class of new associates 14 months later, as most law firms extend offers to almost every summer associate.

There are multiple problems with this approach to hiring: rates for junior-level talent are too high, diversity is not achieved, and the pool of candidates is too narrow. Yet this is the formula BigLaw and graduating students have become accustomed to, at least before the pandemic shook the model. BigLaw, even amid a pandemic, is not easily disrupted.

Health and welfare concerns brought on by the COVID-19 pandemic caused summer associate programs to be severely shortened or terminated, and economic uncertainty caused law firms to postpone the starting date for incoming associates into the next calendar year. Some firms have offered stipends to incoming lawyers to postpone their start dates for another year. This will inevitably impact the size of the next class to be hired.

All of this will fall on the backs of emerging talent. As it already was prior to the pandemic, graduating law students fall into two categories: Haves and Have-Nots. The Haves receive an offer for a summer position after one year of law school performance and grades. With that offer, they are virtually assured of full-time entry-level employment the following year, in the biggest law firms at a salary of approximately $200,000 per year. That type of salary pays off a lot of student loans.

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For their Have-Not classmates, even at top-ranked law schools, they struggle to find employment in too many cases at any salary. Corporate legal departments, nonprofits, smaller law firms and even more and more judicial clerkships often do not hire directly from law schools but rather from the pool of more senior lawyers leaving BigLaw.

For those students who did not land an entry-level job at a BigLaw firm, the circle is truly vicious as they attempt to launch their careers in an unwelcoming and unstructured environment.

The pandemic will worsen this situation. There will be fewer Haves as law firms reduce their hiring classes, crowding the market for the Have-Nots with former Haves. It may take several years for law firms to return to the levels of hiring they experienced prior to the pandemic. The steady decline in entry-level classes since that time will accelerate after the pandemic.

Aside from the impact this will have on law schools in general, there is a real concern that less privileged young attorneys will bear a disproportionate brunt of the impact. They often already suffer a disadvantage in law school performance during the all-important first year of law school. So much depends on familiarity and comfort with the curriculum, which less advantaged law students often do not possess.

With the pandemic decreasing the size of entry-level classes and forestalling the start dates of employment, less privileged law students—with or without an offer of employment—will struggle to maintain economic independence. We at Legal Innovators know this firsthand from discussions with some of our young lawyers.

One potential positive impact arising from the pandemic is to lengthen the gap between taking the bar and commencing employment. That gap can and should be used to more effectively train starting lawyers. Law firms have moved further and further away from that approach as the pressure on partner productivity has been accentuated and as the relationship between law firm and junior lawyers has become more transactional.

Greenblatt Parker headshotsJonathan Greenblatt (left) and Bryan Parker are the co-founders of Legal Innovators. Parker is the company’s CEO, and Greenblatt is its chairman.

It should be said that out of every crisis comes an opportunity. The pandemic should cause BigLaw firms to reassess their hiring practices. If they rationalize the salaries paid to young attorneys to correlate to the billing rates they can charge, and examine the functionality of legal services being provided by junior attorneys to scale their prices accordingly, they can experiment and take greater risks on people they believe have the talent to succeed than they can afford to do with salaries at market unsustainable levels. Right-sizing salaries may increase opportunities for more diversity in the profession.

Taking this approach will increase the level opportunity for a greater number of graduating law students across the board. It will level more of the playing field between the Have and the Have-Nots and will reduce the “all or nothing” risk-reward ratio for graduating law students. Utilizing apprenticeship type programs for a greater percentage of an entry-level class will also allow lawyers—often those coming from less privileged backgrounds—to demonstrate their skills over the course of a longer contest.

The game should not be over after the first possession. Looking at talent more broadly in this way, will allow the legal profession, which claims to want more equity amongst its participants, to become more equitable and drive the type of diversity and inclusion gains it has longed for. The traditional, risk-adverse legal industry is being forced to adapt in a new environment, which presents a unique, positive opportunity for firms and legal departments to flourish in the future if they implement change now.

It will be interesting to see whether, as the profession becomes more diverse, other rigid and potentially outdated practices will fall away as well. For example, if clients support diversity as they say they do, will they provide billable work to younger diverse attorneys, forcing law firms to consider promoting them based on their contributions to the bottom line of the firm rather than climbing a long and tedious lockstep pathway to partnership?

If so, law firms will make greater inroads toward solving their abysmal lack of diversity within their partnership ranks far sooner than the current system permits.

Jonathan Greenblatt and Bryan Parker are the co-founders of Legal Innovators. Parker is the company’s CEO, and Greenblatt is its chairman. Legal Innovators is an alternative legal services provider that is changing the way the law approaches hiring, pricing, inclusion and diversity of junior legal talent through a two-year work-based program.

Mind Your Business is a series of columns written by lawyers, legal professionals and others within the legal industry. The purpose of these columns is to offer practical guidance for attorneys on how to run their practices, provide information about the latest trends in legal technology, and how it can help lawyers work more efficiently, and strategies for building a thriving business.

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