With a flood of new law school grads and discount legal services crowding the Las Vegas market, the new law of the land: Adapt
Times are tough for lawyers, just like they are for everybody else. The recession shrank demand for legal services — giving rise to competition from cut-rate specialists, causing some firms to lay off staff or close, and forcing those who remain open to make changes in the way they do business. It’s a brutal landscape for any attorney to navigate, but especially for the newly minted.
“People with years and years of experience can’t keep their jobs. Firms are downsizing, not growing; experienced people have lost their jobs. We, with no experience, can’t compete with them for the few jobs there are,” says 27-year-old Las Vegan Amanda Litt, who graduated from Thomas Jefferson Law School in San Diego in May 2011.
Take the gut-wrenching inability to find work in your chosen field, and add to it a six-figure student debt: You begin to understand what it’s like to be many of Litt’s law school friends who remained in California, unemployed — or employed in some field other than law.
“I have friends who have gone to work in clothing stores and restaurants,” she says.
For Litt, it’s easier. She’s a law clerk for Clark County Judge Michelle Leavitt, a position she began just a few months after finishing law school and moving home to Las Vegas. She finds the employment picture to be better here than in California, and the facts back up this observation. Graduates from UNLV’s Boyd School of Law have higher job placement rates than the national average.
As the economy slowly recovers, some well-established folks in the legal field say business is looking up. Despite the upheaval, they say they’d still encourage young people to pursue the respectable and — yes — lucrative field of law. But in this market, the new law of the land is adapt — or fall behind.
The law of evolution
The legal profession is hemorrhaging jobs nationally. According to the National Association for Law Placement, the sector lost more than 45,000 jobs during the recession. The recovery that began in 2011 only meant it was losing them at a slower pace.
What caused most of the pain locally, says Boyd School of Law professor Jeffrey W. Stempel, was the end of the construction boom, which had brought with it high demand for legal services.
Stempel says the recession shifted Nevada’s legal landscape, which for many years pre-boom had been “under-lawyered,” making it a great place for solo practitioners to hang their shingle. “There weren’t that many New York City-style big law firms,” he adds.
Then, in the late 1990s, large regional and national firms began opening offices here. This continued until the mid-2000s, adding more lawyers and larger, more sophisticated firms to the local scene.
Another problem, adds Darcy Neighbors, founder and CEO of CIM marketing partners, came from collections. As businesses struggled, former partners waged war against each other in courts, while attorneys racked up mountainous legal fees that might never be paid.
“In retrospect, we should have seen that it wouldn’t last forever,” Stempel says. “As a result of that, some of what’s gone on has been a correction that might have happened in any event.”
As the recession took hold and business dried up, lawyers moved into action. Although discount-rate firms and those that offer cheap, specialized services have been around for a while, suddenly, they were everywhere.
“The attorneys who advertise on TV tend to specialize in auto accidents, or estate planning, but you didn’t see them painting their buildings pink. It’s not high margin to do tickets, so you need to get high volume. They advertise a lot,” Stempel says.
Responding to pricing pressure, attorneys began to transform the age-old practice of billing hourly for most commercial services and charging contingency fees for cases that might lead to monetary awards or settlements. Suddenly, clients were asking for flat fees or combined flat-hourly fee arrangements.
Firms began cutting costs, taking measures like replacing hard copy law libraries with online resources to save office space and storage fees.
Survivors learned new skills, leaving behind specialties in fields like construction defects for more relevant practices, such as bankruptcy. Entire firms were remade, says Connie Akridge, immediate past president of the State Bar of Nevada. She went from 80-year-old Nevada-based firm Jones Vargas, which was absorbed by Phoenix-based Fennemore Craig, to Holland and Hart, which operates in the mountain states, taking some people with her.
“I have a health law practice, and I felt it was important to get on a larger platform to be able to market myself,” she says. “I would say it’s a buyer’s market, from a client’s standpoint.”
Into this picture walked law school graduates like Amanda Litt, hoping to find a job.
Fresh faces, mixed prospects
“Law School Grads Face Worst Job Market Yet – Less Than Half Find Jobs in Private Practice.” That was the headline on the National Association for Law Placement’s June 2012 employment report.
Things got so bad for law grads in the last several years that some have sued their schools for misleading them about their job prospects. One such case, filed by graduates of New York Law School, was dismissed in March, but the attorney who represented the students has filed several other, similar complaints around the U.S.
Boyd students haven’t got it made, but they seem to have it easier than these disgruntled juris doctorates.
According to NALP, 85.6 percent of 2011 law school graduates are employed on average across the U.S. But UNLV reports that 89 percent of its 2011 graduates are employed. While only 65.4 percent of law grads nationally are in jobs that require them to pass a bar exam, nearly 71 percent of Boyd grads have such jobs. The comparison is similar in almost every parsing of the data; UNLV is faring relatively well. Moreover, most Boyd grads say the work they found is in Nevada.
Trouble is, both local and national numbers are still at historic lows. Akridge says the number of people who took the state bar exam in 2006-07 was in the 900s. In 2011-2012, only 559 people applied.
“It’s been a sort of gradual decline since the recession kicked in,” she says.
“It’s tough,” Litt adds. “It’s a bad job market, and Vegas is one of the better ones.”
Although some judges will keep their law clerks longer, most of these positions last a year. Litt has been in her clerkship 13 months and says she wants to get into private practice – that’s why she went to law school.
“I’ve applied to many places. I’ve been to many interviews. I’m waiting,” she says.
Aggravating the problem — particularly for those who are unemployed — is the heavy student loan debt load that law students carry, the only way many of them can pay for the expensive programs. In March, a U.S. News data study found that the overall average indebtedness for American law school graduates was a whopping $100,433. The highest approached $165,000. Juxtapose this with NALP’s finding that the national median salary for these grads in 2011 was $60,000 (and that’s down from $63,000 for the class of 2010).
Litt says law students — and those from other professional fields who are in the same boat — aren’t greedy; they just expected to be able to make a good living. “Most of us are in huge amounts of debt. You’ve worked so hard to get where you are. You have dreams and aspirations. That’s why you did it. At least that’s why I did.”
Career advice: Go for it
And yet, Litt says she would tell her young family members, kids of friends, neighbors interested in pursuing a law degree to go for it — not just because she would never deter someone from his own dream, but because it’s still a great career.
Stempel and Akridge agree, noting that one doesn’t have to use a law degree to be a lawyer — a professional degree improves his or her job prospects generally. Lawyers are still better off, they insist, than the average Joe in a recession.
The State Bar of Nevada has organized efforts to help young grads find jobs. A new mentoring program began last year, pairing up new lawyers with seasoned lawyers to help the newbies get their feet wet while still in job search mode. And a new referral service pairs members of the public who call looking for a lawyer with members of the bar who pay a fee to be listed.
CIM’s Neighbors, who specializes in marketing law firms, sees a market that has remained strong in the face of adversity – particularly for those who have adapted.
“The clients we’ve had during the recession have actually grown, “ she says, giving the example of Hutchison & Steffen, a regional firm that she says hired six attorneys in 2010. “They stayed in strong from a marketing standpoint.”
Stempel, whose son is currently at Stanford Law School, believes there will always be demand for attorneys — unlike some other professions that were put out of business.
“You wouldn’t say to your kid, ‘Open up a video store; you can be just like Blockbuster,’ but I would never advise a kid of mine against law,” he says. “Law has changed in evolutionary ways, but it’s still relevant.”