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Practicing Attorneys Also Suffer During the Recession

The job market may be tough for new law school graduates, but it is no easier for recently laid-off experienced attorneys. “Layoffs in the legal profession fell hardest on grads from 2006, 2007 and 2008, but there were also elevated rates among people who were five, six and seven years out of law school,” said Scott Schaefer of the University of Utah, who in March co-published with Stanford professor Paul Oyer an academic study titled “What Drives Turnover and Layoffs at Large Law Firms?”
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May 26, 2010

The job market may be tough for new law school graduates, but it is no easier for recently laid-off experienced attorneys. “Layoffs in the legal profession fell hardest on grads from 2006, 2007 and 2008, but there were also elevated rates among people who were five, six and seven years out of law school,” said Scott Schaefer of the University of Utah, who in March co-published with Stanford professor Paul Oyer an academic study titled “What Drives Turnover and Layoffs at Large Law Firms?”

Some of the layoffs of more experienced attorneys can be attributed to the traditional up-or-out hierarchy at big law firms, meaning that those who don’t make partner are eventually pushed out, Schaefer said. But even accounting for that phenomenon, layoffs have been high.

Schaefer and Oyer also made some other unexpected findings in their study. For example, associates at big firms who did not attend a top law school were less likely to be laid off than those who did.  “We think that in order to land a job in a top firm coming out of a not-top school, there has to be something pretty special about you,” said Schaefer, suggesting that a firm may be less willing to part with its “diamonds in the rough.” 

Of course, Schaefer says that attending a top school is always preferable in order to be in the position to obtain the big jobs in the first place, and that those firms do hire disproportionately from the best schools.

Schaefer and Oyer also found that associates are just as likely to be laid off as many other partners in their office, regardless of whether they attended the same law school.

Hiring decisions, on the other hand, are significantly linked to the alumni connection. Schaefer believes that layoff decisions have a lot more to do with productivity and work ethic, factors that can’t be known at the hiring stage. In other words, come layoff season, friendly reminiscences between partners and associates about their alma mater will not matter much.

Law firm consultant Peter Zeughauser says that laid-off attorneys certainly can be successful, but it depends on how they harness their energy. “Many of these graduates whose first-year jobs fell through are highly capable of starting their own practices,” said Zeughauser.  “If they want to go out and practice on their own, I’m sure many of them will make a formidable run at it.”

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