Business & Practice

‘Longer Runway’ Due to Virus Means Anxiety for New Big Law Class

Sept. 10, 2020, 9:40 AM

Fall has become a season of discontent for a 2020 Big Law associate class whose expectations of a stable start to their careers have been upended by the coronavirus.

Many bar authorities across the country, including in New York and California, delayed or canceled in-person bar exams scheduled for July for public health reasons, leaving recent law school graduates anxiously studying for months on end for an exam that may or may not happen this fall, to be administered in an online format that presents potential problems.

They also face another big hurdle — employment. Many law firms have pushed back start dates for their associates to the New Year. Some are providing stipends and health insurance to get the grads over the hump, others are not.

Law firms are also facing the unknown, eager to not repeat hiring mistakes they made in the Great Recession that led to a so-called “lost generation” of Big Law associates, while also trying to ensure long-term financial sustainability in a difficult economy. It’s all added up to anxiety and confusion for the newest group of Big Law associates.

“What’s incredibly frustrating for people is we just don’t know how to plan and financially plan our lives at least for the remainder of this year and this has been ongoing since March,” said Donna Saadati-Soto, a Harvard Law School 2020 graduate who plans to work in Big Law.

Chaotic Time

The annual routine for moving from law graduate to first-year Big Law associate is well established and until the turbulence of 2020 was generally predictable. Third-year law students, Big Law offers already in hand, graduate in May and then spend 10 weeks over the summer studying for the July bar exam, before heading to work at firms in September or early October.

But instead Sophia Dauria, a 2020 Fordham Law School graduate who is poised to start at Troutman Pepper in January, has spent the last four months studying for the bar at a plastic table in her living room while her roommate works from home.

“It’s really unlike anything any other class has had to experience,” she said.

“With all of the chaos back in March, we knew there would be a lot of disruption to what is usually the transition from law school into your legal career,” said Saadati-Soto.

The disruptions have hit home for recent grads like Saadati-Soto and her classmates headed for firms.

Saadati-Soto said among her classmates, some are starting new jobs on time, others’ start dates have been pushed back a few months, but a large chunk will have to wait to start work until 2021.

This means figuring out how to make ends meet, a tough task for law graduates, many of whom have already taken on significant debt to complete their degree.

Some graduates find themselves asking if they need to find part-time or full-time work before starting their jobs in Big Law as they don’t have the financial resources to go without income until next year, said Saadati-Soto.

“It’s just not ideal at all and I’m just disappointed that more effort isn’t being put in to understand the unique situations this pandemic has put a lot of us in, whether that’s mental health issues, accommodations or financial and housing security,” Dauria said.

Firms’ Decisions

Since the coronavirus pandemic hit the U.S., some law firms have made operational changes, including austerity measures in the form of pay cuts or furloughs.

Several firms, like Baker Botts, Orrick Herrington & Sutcliffe, and Seyfarth Shaw, announced early on that they would delay the start of work for their first-years until 2021 or after the postponed bar exams.

It’s not just that there might be an October bar exam and students would need time to study, but part of delay is also demand driven, said Lisa Smith, principal at Fairfax Associates.

Data released by Thompson Reuters last month showed that associate hours on average were down relative to partner hours. It also showed demand was down 5.9% relative to the second quarter of 2019.

“Is it the right time to bring in a new class when demand isn’t at its peak?” Smith asked.

“That doesn’t create the best experience for incoming associates so pushing it to January in that instance makes some sense. They’re coming in at a time when there’s work to do and a better start and [the delay] will preserve some of the work for the existing associates,” she added.

A January start also pushes the expenses of paying and training a new class to 2021 and helps manage cash flow in a year of uncertainty, Smith said. Even if the demand isn’t there in January or February, it’s more likely to be there in the second half of the year as the prospects for a rebound in the economy then are more optimistic.

“So there’s a longer runway to balance expenses and demand whereas if you’re bringing in people in September, October, it’s basically all expense and no revenue and this isn’t the year that a lot of firms want to be bringing in a lot new expenses without corresponding revenue,” Smith said.

However, some firms are busier than ever, noted Michelle Fivel, a partner in the associate practice group at legal recruiting firm Major Lindsey & Africa, but are delaying because of onboarding and training needs.

“It’s harder to do that when everybody is remote — much harder to do that,” she said.

Goodwin Procter is one of a dozen firms that are onboarding their associates in the fall. Emily Rapalino, it’s hiring partner, said the decision was due to the firm’s busy practices as well as the success of the firm’s virtual summer associate program.

“We felt like we gained a lot of experience onboarding new attorneys through that summer program, figuring out what works in the remote environment and integrating new employees so we feel like we have the capability and we’ve developed the tools to integrate a new class remotely,” she said.

Mixed Messaging

A sense of uncertainty still looms over incoming Big Law associates, whatever the reasoning for delays.

Northwestern Pritzker School of Law former dean and professor Daniel Rodriguez said there seems to be a communication gulf between what the firms are saying is going to happen in the short term and what the students and graduates are hearing.

Firms have made significant adjustments to summer programs and on-campus interviews, but have said they don’t expect to have a serious abatement of hiring of promising young associates, he said. Rodriguez noted no Big Law firm has thus far canceled its first-year class.

But graduates he’s spoken with worry that they’re not being told the whole truth. The truncation of summer programs, postponement of on campus interviews, and the looming uncertainty about the economy makes graduates more skeptical and nervous, which isn’t ideal for recruitment, he said.

“So much of the hiring process in Big Law requires trust on both ends,” he said.

Saadati-Soto said she hasn’t seen much transparency from the law firm side, and some of her classmates have only received one or two emails about potential their start dates. It’s tough, she said, for a recent graduate trying to make decisions about, for instance, where to live and sign a lease.

“It feels like we’ve just been hung out to dry,” said one law school grad poised to start next year at an Am Law 50 firm, who declined to be named to preserve relationships with the firm.

There’s a worry that delays in start dates could indicate financial issues firms are having that could lead to cut backs in first-year hiring, the graduate said. But first years don’t have much of a choice other than to wait it out as it would be nearly impossible to find another job given the current economy and lack of bar licensing, they said.

“I can’t afford to lose this job,” said the graduate.

To contact the reporter on this story: Meghan Tribe in New York at mtribe@bloomberglaw.com

To contact the editors responsible for this story: Rebekah Mintzer at rmintzer@bloomberglaw.com; Chris Opfer at copfer@bloomberglaw.com

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