The recent influx of newly minted law graduates entering the job market is set to challenge Big Law’s hiring capacity in 2024. This follows a period of high employment for law graduates, exemplified most recently by the class of 2023, which experienced a record 92.6% employment rate according to the National Association for Law Placement (NALP).
Despite the optimistic figures for the class of 2023, the NALP forecasts a tougher landscape for the class of 2024, largely due to a significant spike in the number of graduates. This increase is attributed to a surge in interest in law school during 2021’s social justice movements and delayed start times due to the pandemic. Executive Director Nikia Gray has emphasized that the upcoming class will face a “more challenging employment market”.
Concurrent with the predictions for a tighter job market, there are underlying signs of enduring optimism for fresh JDs. Data suggests that large law firms’ hiring appetites have increased over the past decade. For instance, the number of graduates hired by firms with more than 500 lawyers rose by 75%, from roughly 3,600 in 2013 to over 6,300 in 2023. This reflects an alignment between the growth of these firms and their recruitment of new talent. The AmLaw data indicates that the number of such large firms grew from 84 a decade ago to 101 now, with each firm hiring more graduates on average.
While the expansion in numbers offers a glimmer of hope, the increasing ratio of new private practice lawyers hired by Big Law—from 16% in the post-Great Recession era to 34% last year—is indicative of new graduates’ growing reliance on these firms. This also underscores the broader trend of Big Law’s consolidation and scale-up efforts, often involving mergers and acquisitions, as observed in recent analyses.
However, managing director at Wells Fargo’s Legal Specialty Group, Owen Burman, suggests that the apparent dip in summer associate class sizes could be a short-term adjustment rather than a long-term directional shift. As financial results for the first half of the year are poised to be strong, law firms might reinvigorate hiring if there is an uptick in demand.
In the event that Big Law doesn’t absorb the glut, other sectors might fill the hiatus. Historically, smaller firms have expanded their hiring when larger firms retract, mitigating the impact on overall law graduate employment. Gray emphasizes that the employment challenge is unique to large firms and doesn’t signal a general downturn in the legal job market.
Given this context, Big Law’s hiring dynamics remain a critical focal point for law graduates and hiring firms alike. The sector’s ability to adjust to a swelling pool of candidates will likely influence broader trends in the legal employment landscape in the years ahead.
For more detailed insights, you can access the full article on Bloomberg Law.