Law firms have already started heading to mid-sized cities to slash overhead. Now, it may be time for new law school grads to do the same.
May marks the beginning of a new chapter for students wrapping up their final months of law school. And there’s a lot for law school grads to consider as they decide where to head after graduation. Things like salary, cost of living, the job market, and generational and cultural demographics come into play but, typically, there are a handful of cities law school grads tend to look first, especially if they have an interest in Big Law.
According to ABA Journal stats from 2019, Washington, DC has the highest demand for lawyers over anywhere else in the country. New York City is teeming with both large scale and boutique firms and is ranked highest in the nation in job availability for lawyers. And according to an analysis conducted by Business Insider, San Francisco, despite being the most expensive city in the US, is one of the wealthiest cities with one of the strongest local economies in America. At the same time, these cities are pretty expensive places to live in.
Heading for more affordable pastures
According to statistics by Credible, 7 out of every 10 law school graduates need to borrow money in order to pay for their degree, with the average student graduating with around $150,000 of debt in 2019-2020. And for some, the educational gains are outweighed by mounting debt—a recent poll by Gallup reveals that only 23% of law school graduates feel that earning their degree was financially worth it. Considering that entry-level associate hiring by law firms plunged 40% in the year after the Great Recession, this figure is likely to dramatically increase in the coming months.
So, if 2008 was any indication, the ongoing economic turmoil caused by COVID-19 may force law grads to think outside of the box to find entry-level work.
Law firms are growing and expanding into mid-sized cities
In recent years, Big Law firms have already started laying down roots in lesser-populated locales to reduce overhead. Looking to gain traction and power through scaling, law firms are opening offices in places other than New York or San Francisco by assigning jobs to lawyers from pricier areas, to more underpriced markets. In the past decade, AM Law 200 firms have opened over 100 locations in Atlanta, Minneapolis, Nashville, North Carolina’s “research triangle” in the Raleigh-Durham area, and other mid-sized cities.
Mike McNamara, the CEO of Dentons, the world’s largest law firm by the number of lawyers, shed light on the law industry’s shift to focus on smaller locations,
“To say the legal business in the United States is only in New York or California or Chicago or Washington … is simply false and misunderstands the breadth of how legal business is done, both inbound and outbound.”
Hogan Lovells, a law firm employing nearly 3000 lawyers with offices around the world, recently launched a legal center in Phoenix, Arizona, in an effort to be “flexible, efficient, and cost-effective.” Phoenix has been on the rise for years and became the fastest growing city in America between 2017-2018 according to data from the US Census Bureau. The median residential rent price in Phoenix is about $1500, compared to a median of $4,580 in San Francisco, according to data gathered by Inc from Zillow.
With reduced regulations, increased VC funding for startups, and a talent pool of young minds from neighboring universities, cities like Phoenix have become havens for young adults, attracting startups and young lawyers alike.
Cities like Houston, Austin, Denver, and Seattle are also fast becoming hot spots for law school graduates looking for better job opportunities and a lower cost-of-living, and are ideal locales for young talent, according to Inc’s study on surge cities.
While the uncertainty surrounding the legal job market will likely continue for months to come, it is clear that, across the globe, we’re being pushed to consider new ways to work. And the increased reliance on remote team configurations may bring more flexibility in where we are able to call “home” as well.
