The last few years have been difficult for law firms, as the economic decline has affected the legal industry especially hard. Recent law school graduates are having a hard time finding work after passing the bar, and certain practice areas that were once thriving are almost complete wastelands. But, after several years of declines in hiring, law firms ranked between 101 and 200 on AM Law’s list of the highest grossing law firms are making moves to hire more attorneys.
AM Law reports that, in 2012, so-called “second tier” law firms have dramatically increased their hiring. This trend, which would be seen by many attorneys as good news, is hugely contrasted with firms in the “first tier”, which have either decreased or maintained their level of hiring. In 2012, the Second Hundred took in a combined total of $18.51 billion in gross revenue, the majority of which was achieved through leverage, as 885 lawyers were hired by these firms. These new hires accounted for a 3 percent increase in the number of attorneys employed at these firms, and completely reversed the drop in hiring seen by these firms in 2011.
It seems as though the second tier of law firms are betting that, by increasing the number of attorneys in their employ, they will be better able to serve the needs of their clients as the economy recovers and offer rates that are lower than their bigger competitors. The gamble of this maneuver, however, is that while the economy is recovering, a full recovery may be years or even a decade away. This means that these law firms may be investing their money into new hires for a future that never comes.
Meanwhile, first-tier firms have continued hiring at a conservative rate which has been described as “slow growth.” Larger and more successful firms have the option to play it safe when it comes to hiring, and the collapse of several bigger firms over the last five years have left comparable firms wary of unneeded expansion.