The National Association for Law Placement, Inc. (NALP) issued a report last month called Perspectives on 2016 Law Student Recruiting. NALP’s data is based on surveys returned by 373 law firms, 43% of which were comprised of the largest law firms in the country (i.e., 700+ attorneys). The report shows a somewhat conflicting data on whether the legal hiring market has finally peaked after a steady post-recession recovery.
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Fewer Summer Offers
While NALP notes that entry-level recruiting activities at law firms remained pretty stout in 2016, they also point to indications that the post-Great Recession recovery over the last several years may have plateaued in 2016. It cites the fact that the firms responding to their surveys have made fewer offers for summer positions, in the aggregate, than they did in 2015 (-1.7%), which is a departure from recent years where most firms increased the number of summer offers year-over-year since the recession.
Just as in previous years, the recruiting levels were not consistent across the board, as some firms had larger summer classes while some firms had smaller classes as compared to 2015. NALP attributes this to a large variance in law firm financial performance. However, logic dictates that these changes from employers of various firm sizes nearly cancelled out each other in the aggregate to keep the overall offer number pretty much identical to the 2015 level.
Other Indicators of Slowdown
Furthermore, NALP observes that the number of callback interviews had been growing consistently since 2012, but in 2016 callback interviews remained basically flat as compared to 2015. Likewise, in 2016, the 3L recruitment was down 5% after increasing in each of the last three years, and still way below the pre-recession levels. According to the report, summer hiring had gradually increased since the end of the Great Recession, but it never fully recovered to the pre-recession level.
Seemingly Inconsistent Data for Average Summer Class Size
On the other hand, what’s interesting is that the average summer class size for the largest firms (700+ lawyers), and the overall average summer class size, have both surpassed pre-recession highs in 2016! NALP points out that the modal class size (i.e., the most common) was only two, and the report appears to imply that (i) a large variance in summer class sizes across the board and (ii) smaller firms being overweighted within the numerical average data, might explain, at least in part, the apparent inconsistency between the data on the average summer class size and the total number of summer offers discussed above.
Based on the data presented in the report, we believe that the discrepancy cannot be explained by a supposition that the offer acceptance was lower in 2016 than in 2015, and therefore the firms made more offers to fill all the available summer associate spots. In 2016, the offer acceptance rate was 33.2%, which was slightly better than 32.7% in 2015.
TL;DR, The hiring data from 2016 shows that law firm hiring remained strong, but there are signs that the pattern of a gradual post-recession recovery might have stalled somewhat, including a small decrease in the total number of summer offers as compared to 2015 after a growth in each of the last few years. However, there are contrary indications in terms of the average summer class size and the average number of summer offers; in fact, the former (14) matched the highest in the last 23 years and the latter (38) was the best since the mid-2000’s. The bottom line is that the total number of spots available for summer associates shrunk very modestly after a period of post-recovery growth. The report, which is linked above, is definitely worth a read.