Source: Crain's Chicago Business
By Claire Bushey
The legal industry has endured a painful post-recession slowdown marked by wide-scale layoffs, hiring freezes and mergers. But now the city's elite law firms are giving associates raises—big ones. Does that mean the bad times for new lawyers are over? Hardly.
Eight Chicago law firms recently upped salaries for junior attorneys, joining a professional game of follow-the-leader that began June 6 when New York's Cravath Swaine & Moore boosted salaries for first-year associates by $20,000, to $180,000. The most experienced associates among the eight will top out at $315,000. Winston & Strawn moved first here, followed over the next nine days by Kirkland & Ellis, Sidley Austin, Baker & McKenzie, Jenner & Block, Mayer Brown, McDermott Will & Emery and Katten Muchin Rosenman.
While the legal job market overall remains slack, graduates of the “T14”—the 14 schools ranked highest by U.S. News & World Report—aren't hurting nearly as much as the rest of the field. To be sure, during the recession they were less likely to land those $160,000 jobs when the country's largest firms cut back on hiring. In 2011, the firms hired 3,294 associates, according to Henderson's calculations using trade publication data, a 54 percent drop from the number hired in 2008. Still, only 2.5 percent of students graduating from the T14 in 2011 were unable to find jobs, compared to almost 12 percent of the 44,000 students who graduated that year.
Since then, hiring at the big firms has recovered, although not to prerecession levels. Last year they hired 4,265 associates. But nationwide, law school enrollment has declined as the specter of student loans combined with uncertain job prospects scares off potential students. Enrollment at even top schools dipped 2 percent between 2011 and 2015. And although law firm hiring peaked almost a decade ago, the slight drop in the talent pool has stoked competition among them.
Moreover, the recessionary hiring squeeze means that there are fewer older associates in the market, and demand for them has sharpened, says Beth Woods, a recruiter in the Chicago office of Major, Lindsey & Africa.
"The very junior people are getting the benefit, but the increases are intended for the retention at the mid- and senior levels," she says.
Read more of this feature at Crain's Chicago Business.