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Anxiety alley

Cover Story
|Written By Jeffrey H. Waugh

Summer and articling students across the country can''t help but worry as the economic storm pounds the legal landscape.

We’ve been hearing all around us that these are challenging times. Layoffs are coming down in full force. Law firm associates, and even sometimes partners, are being axed in unprecedented numbers in the U.S. and the U.K. legal markets. Insiders say Canada’s legal market is nowhere close to that point, but there is still evidence of firms quietly getting rid of some lawyers.

In February, Statistics Canada reported that 129,000 people had lost their jobs over the course of the previous month. Hardest hit was Ontario, with 71,000 positions vanishing. While most of those were cut from the manufacturing sector, there’s no doubt the legal profession is facing some tough times. Doom and gloom stories are plentiful, but what’s the real story for anyone working their way through law school? If you’re just starting the path to entering the profession, is it time to start getting concerned?

Guy Joubert, president of the Canadian Bar Association, says there may be some worry for current articling students looking to make the transition into an associate position. “I think that it [is] a realistic assessment,” he says. “If law firms are focusing on trying to keep their associates and stabilizing their staff and lawyer compliment, they may not necessarily take on as many students to start off with, and they may not necessarily keep on as many students as they have in the past.”

As anyone in the legal field will tell you, anxiety is a normal part of any law student’s life. It’s filled with exams, with applications, with interviews. But the economic conditions are adding another layer, and extending that fear into the lives of articling students who in the past may have felt quite secure in being offered an associate position. “I certainly think that there’s a sense of concern amongst our articling student group,” says Michelle Gage, director of student and associate programs in Ontario for Ogilvy Renault LLP. The firm hasn’t yet announced its hire-back decisions — that will happen in the spring — so she says she can understand the feelings students may be experiencing. “Having said that, articling students always experience anxiety around hire-back decisions,” she adds.

In addition, Gage says: “We are very fortunate in our diversity of practice here at the firm; it keeps us pretty well-positioned to weather these kinds of economic storms. We have strength in a lot of areas that are counter-cyclical, whether it’s restructuring, bankruptcy/insolvency work, employment and labour work — we’re in fact actively seeking to add an associate to our Toronto employment and labour group right now. So we’re not being impacted perhaps in the same way as our friends at other firms might be.”

Carol Chestnut is the director of student and associate programs for Stikeman Elliott LLP’s Vancouver office. She says there’s no need for concern with her students either. While Chestnut is careful to point out they only have a small office, and it would be difficult to derive any trends from it, the economy has not been playing a role in their hire-back decisions. “We have historically had very good hire-back rates, but we only hire three students. So it’s not like we’ve got 15 of whom we routinely hire 13, and last year only hired two,” she says. In September, they did choose to hire back only two of their three students, but she says the decision to not make an offer to the third was based on circumstances that have nothing to do with the economy.

Chestnut says they have a fantastic group of students, and great clients with plenty of work. “I don’t think we ever have, and certainly this year we would not let the economy dictate whether or not we kept on an excellent student. If somebody’s good, they’ll be kept on — we can afford to do it because we’re talking about small numbers.”

Things appear to have been relatively stable up to this point, but it’s what to come that has some worried. “The firms have slowed down,” says Adam Lepofsky, president of RainMaker Group, a legal recruitment firm. “2008 was still a very good year for everybody, off of 2007. 2007 was so tremendous — you run on the fumes — and 2008 was still a very good, strong year, for everyone. But it’s what [is] in the pipeline, or what’s coming down the pipeline, which is what we’re looking at.”

“We have not yet noticed a decline in large firm hiring as these firms have generally indicated that they are biding their time and watching,” says Lisa Blair, assistant dean of student services with the University of Ottawa. The mechanics of the hiring process gives some cushioning to these types of situations, she says. “Due to the early legal recruiting cycle, hiring being done now is for students who will not start articling for another 18 months, so the system is somewhat protected from immediate or reactionary fluctuations.”

Clea Ward, director of career development and external relations with the University of New Brunswick Law School, says she has begun to notice a slight decline in the number of positions offerred by firms. “I have a slightly higher number of third years looking for articling positions at this time than I have in the past few years,” she says. “It’s not up dramatically, but up probably between five and 10 percent more than usual.”

Ward says when she gets down to the last few months of placing third years, they often end up getting placed in the small- and mid-sized firms outside of the major urban centres. This has her left with a bit of concern, since such firms may not have the additional resources to weather the economic storm. “One thing I am worried about is that more and more of those firms are going to opt to not take on an articling student this year, just because of the uncertainty in the economy,” says Ward.

Generally speaking, she doesn’t have much hard evidence of this happening yet. During her conversations with firms in New Brunswick and the Atlantic region, she says they have told her they’re doing quite well and there’s still plenty of work to go around. But as with Lepofsky, she says it’s what’s in the pipeline that might be the cause for concern. “I think that everybody’s worried that maybe in six months it may start to affect them, so they’re a little worried about committing to taking on a student if there’s not enough work to do throughout the year.”

Ward can offer one exception to the lack of evidence of an impact. She points to the articling program offered by the Attorney General’s office with the New Brunswick Department of Justice. It typically takes on three articling students — one francophone, one anglophone, and one bilingual student. This year, it has cancelled the program completely. “Our [University of New Brunswick] students wouldn’t ever fall into the one francophone category because they’d either be bilingual or anglophone, but that’s potentially two articling positions for our students that were lost. And that happened in the fall, so I think that has kind of set the tone, and likely made our third-year students a little bit anxious.”

It is the third years that appear to be experiencing the most anxiety, she says. “We’ve got a few more than usual this year looking, and I think that there’s a sense that it’s a bad year to be approaching those small and mid-size firms, and that there are not opportunities that there normally would be.”

“What firms are telling me is they’re not changing their numbers with respect to first- and second-year hiring — I think everybody is really optimistic that this will work its way out in a year two — but the people who are caught up the worst in it, in the crux of it, are people who are articling right now, and third years who are still looking for articling positions,” says Ward.

While most hire-back decisions haven’t been made yet, Ward says as we approach that season she’s been hearing some rumblings from the legal profession about how things will turn out. “I think what everybody’s saying is that the students who are going to be hit the worst with all of this are people who are articling right now, because when firms are looking to see whether or not they’re going to take on an extra associate, I think the hire-back rates are going to be pretty low this year,” says Ward.

Robyn Marttila, director of the career and professional development office at the University of Western Ontario’s law school, agrees that students are anxious to see what’s going to happen. “Many of the firms haven’t announced [hire backs] yet, although, frankly what I’m hearing is that certainly the hire-back rates, most people are anticipating that they’re going to be a little lower this year than they have been in the past,” she says. Marttila is optimistic though. “Some firms, I suspect, will try and hire back all — even though they’re not as busy as they’d like to be — just because they don’t want to lose really good talent, and they’re also quite concerned about their reputation I think.”

She says in terms of summer hiring, she has seen a slight decline, albeit not quite as drastic as many have been anticipating. “There were some firms that reduced their numbers quite a bit, but other firms actually increased by one or two, so it sort of evened out to some extent.” She says students looking for placements outside of Canada have taken a hit though. “I think what did make a huge difference this year, in terms of the summer recruit, is that candidates who normally would have secured positions in other markets, in particular in the U.S. and in the New York market, didn’t get offers this year because of the state of affairs there. So those students were thrown back in the mix, competing for the Toronto positions.”

Marttila says there’s still optimism for the Canadian market, and hopes things won’t take too long to rebound. “From what I’ve heard from my contacts is that they’re anticipating that certainly things will turn around within the next 18 months or so,” says Marttila. “So I think there’s optimism there, which is good, and I think that at the same time people have to understand that we aren’t really over-leveraged in Canada like some of the U.S. firms. We don’t have that same model of having 30 associates to one partner. So I think that it’s a little different experience in Canada.”

It can’t be argued that the anxiety will continue for a while, but as everyone is quick to remind, this is a normal part of any lawyer’s life, especially for students. “I think traditionally, from what I understand, there’s always anxiety amongst students about the summer and articling recruiting — but I suspect that has certainly been heightened with the current economic climate,” says Marttila.

“It’s a hard year,” Ward tells Canadian Lawyer 4Students. “It’s a hard year for everybody, and we’re really hopeful that at the end of the day, by May, by graduation time, we’ll have placed as many people as we normally do, and it just means everybody has to work a bit harder to find and make those opportunities.”