When it rains, it pours. According to the American Bar Association in a recent article by Debra Cassens Weiss, only 55.2% of law graduates found full-time, long-term legal jobs in 2011. More than one quarter (26.2%) reported as “underemployed,” meaning they are either unemployed, seeking work or an additional degree, or in a non-legal, part-time or unpaid position. Top programs in terms of placing students in full-time long term jobs were Columbia, Harvard, New York University, Stanford, and the University of Virginia. Those with the lowest job placement rates were Golden Gate University, the University of the District of Columbia David A. Clarke, and Whittier.
Unfortunately for many, the bad news doesn’t end there. Weiss goes on to say that “among law grads whose employment status was known, only 65.4% were in any kind of jobs requiring bar passage, the lowest percentage ever measured by the group. The overall employment rate nine months after graduation was 85.6%, the lowest it has been since 1994.” Sadly for young law grads and those considering law school, the outlook for finding a good legal job is becoming less likely. One has to wonder how much longer this will take to set in and translate into dwindling law school enrollment.
Law firm mergers were down from Q1 to Q2 in 2012—and the recent failure of Dewey & LeBoeuf may well be to blame. According to Altman Weil and a recent JD Journal release, law firm mergers declined from 14 in January-March to 10 in April-June. The Hildebrandt Institute, in a similar report, pinned the decline as falling from 20 to 5. A consultant with Atman Weil, Ward Bower, noted one potential factor could be Dewey’s decline following its problematic 2007 merger with LeBoeuf.
According to Bower, the effects on mergers have been both direct and indirect. They have been indirect in terms of a growing hesitancy not to be the next Dewey. Yet they have also been direct in that the market gained 300 Dewey partners over the past 6 months with Winston & Strawn adding 60 litigators and Greenberg Traurig adding 50 in Warsaw. Taken together, the consensus seems to be that any moves made should come with a heightened sense of caution. According to Kent Zimmermann with Zeughauser Group, “there are a number of underperforming firms out there, and firms that are thinking of growing know that and want to evaluate opportunities with scrutiny,” he said. “Nobody wants to wind up with a lemon.”
How firms navigate merger opportunities and discussions in the months to come will be interesting. No one wants a lemon, but everyone wants and needs to grow strategically. Two firms of note that did make moves this quarter include 415-lawyer Pittsburgh-based Buchanan Ingersoll, which acquired the smaller Pittsburgh-based Manion McDonough & Luca; and 450-lawyer Frost Brown Todd, which acquired MGLAW, a 7-lawyer Nashville firm.