Recession? What recession?
On Monday, April 12, 2010, the National Bureau of Economic Research (NBER), the non-profit group that officially marks the beginning and end of economic downturns, announced that the recession — which started in December 2007 — is not yet over. http://www.nytimes.com/2010/04/13/business/economy/13recession.html
With the DOW Industrials back above 11,000 for the first time since September 2008 and most economists generally bullish on the future, how does biglaw view the situation?
Across the board, attorney hiring remains way down. Many firms that offered full-time jobs to new graduates deferred starting dates into 2011; a few even withdrew offers. Some firms abandoned altogether the second-year student summer programs that have anchored big firm recruiting for more than 40 years. The surviving programs for summer 2010 are a fraction of their 2007 sizes. Pretty bleak, right?
Maybe not for everyone. For a peek inside, consider the ongoing fictional cross-examination of the very real Dechert LLP senior partner profiled in the April ABA Journal (“Not Done Yet”).
(By the way, the data in the questions are real. As Yogi Berra would say, “You can look it up” in the cited sources.)
Q: “You said that the enormous increases since 1995 in equity partner incomes at your firm and others like it reflect ‘free market capitalism’ at work, right?”
Partner: “Yes. Any business enterprise maximizes profits.”
Q: “In capitalism, does the owner bear any risks?”
Partner: “Sure. The owner bears the ultimate risks of the enterprise. If the business fails, the owner’s investment is wiped out.”
Q: “The owner bears the risk of economic setbacks during downswings in the business cycle, right?”
Q: “But in the most recent economic collapse, your firm’s owners — the equity partners — bore very little of that risk, didn’t they?”
A: “I don’t agree. Even the Am Law data show otherwise.”
Q: “Let’s take a look. Am Law reported Dechert’s average equity partner earnings went from an all-time high of $2.35 million in 2007 to $2.145 million in 2008. Is that what you’re referring to?”
Partner: “That’s a decline of almost 9%!”
Q: “A decline to levels that remain astronomical, right?”
Partner: “Everything is relative. 2009 was even worse.”