American Lawyer is now confirming what just about everyone already knew - job offers for summer associates were way down in 2010 as compared to 2009 (about 33%). American Lawyer bases this on the results reported from the 59 firms that participate in their Summer Hiring Survey. Let's dig into the 2010 numbers and also make a projection of what the 2011 summer associate offer rate will be.
In real numbers, those 59 firms made 888 fewer offers in 2010 - 1,791 as compared to 2,679. Keep in mind that the total output of all law students per year is about 44,000 - so this represents a significant proportion of all law students.
According to NALP, only 8% of the reporting lawyers (not necessarily all lawyers) report a salary of $160K (in previous years). Let's use that 8% as an upper limit on the number that could possibly be making $160K. If we just take the 2,679 offers that were made in the surveyed firms divided by the 44,000 total graduates, then we find that those offers represent 6.1% - which seems fairly close to 8%. However, we know that not ALL firms appear in the survey (although non-appearing firms might be more likely to have decreased hiring and not want to create bad press by reporting it). Of the firms that DO appear on the survey, they are pretty much the $160K firms. We also know that the NALP numbers are typically overly-rosy because law students with a positive outcome are often encouraged to respond and those with a negative outcome are sometimes discouraged from responding.
Regardless, using the most optimistic numbers, we can find the "most optimistic estimate". Consequently, we take the NALP's 8% of students at $160K and scale it by the survey's 33% decrease to arrive at a "most optimistic estimate" of about 5.25% of law students making $160K.
Yikes. That's 1-in-20 odds. We also know that the distribution of salaries is bi-modal, so that if law graduates don't make the big money, then they are likely only making about $55K/year - if they can even find a job. (According to NALP, only about 40% of graduates were employed as full time, non-temporary attorneys in the 2010 class.)
So to put that in easy-to-understand language: Law school = 1/20 "win!", 7/20 "meh", and 12/20 "ouch!" or "epic fail". For someone considering law school, recognize that 1-in-20 odds are terrible odds on which to base your future. You would be better off in Vegas. At least if you lose there you can declare bankruptcy and discharge the debt.
Here's the big question - what will the total number of permanent offers be like in 2011? I have seen preliminary data that indicates that the number of summer associates is up by about 8% in 2011 from 2010 (that would still be down 28% from 2009). I also note that the 59 firms in the survey report offer rates of about 90% and that offer rate has remained relatively stable. Consequently, I would look for the number of permanent offers to be up in the 5%-10% range in 2011 as compared to 2010.
PLEASE NOTE - that will still be a decrease of about 25%-30% from 2009. Unfortunately, for people trying to talk gullible/overly-optimistic pre-law students out of a decision that is likely to negatively impact their lives (see odds above), I would be prepared for a raft of articles screaming about how "hiring is up for lawyers!" in 2011. As I have mentioned before, for those trying to "sell" law school, it's "Everything Sunny All The Time Always!"