Oyer recently presented some of their findings at the “Law Firm Evolution: Brave New World or Business as Usual?” conference.
Relying on the Law Shucks Layoff Tracker and their own tracking of firms’ websites, Oyer and Schaefer have arrived at some interesting (albeit preliminary) conclusions.
Details after the jump.
Much as we had hoped for some definitive guidance, the data don’t indicate any one particular reason.
Our results suggest that no one main force drives turnover in the labor market for lawyers and that firm-speci c human capital (or at least human capital that is speci c to large law rms), specialty-speci fic
human capital, and school-based networks all play some role in sustaining lawyer/ firm matches.
There do seem to be three factors that play central roles, though. Pedigree, practice area, and seniority.
Laid off lawyers are relatively likely to be recent graduates (especially those from top schools) and are less likely to be bankruptcy, labor, and intellectual property lawyers. Securities and banking lawyers are more likely to be laid off, but this is primarily because layoffs were more common at firms with these lawyers.
The correlation between layoffs and graduation from top schools is the only one that surprises us. And it’s a particularly dicey one to figure out. The professors acknowledge the difficulty in separating layoffs from attrition, which is particularly relevant here because voluntary turnover was highest among those from the top 10 schools.
That leads to this shocker (emphasis added):
Once controls for firm and city are introduced, there is no relationship between the quality of law school and layoff probabilities, which contradicts the basic version of the assortive matching model we described. However, there is a large (both economically and statistically) effect from the interaction of recent graduation and graduating from a Top 10 school. This means that, relative to other new graduates and other graduates of Top 10 schools, new graduates of Top 10 school are more likely to be laid off. This does not fi t any of our hypotheses. We can only speculate as to what causes this relationship perhaps fi rms realize that recent Top 10 graduates are more likely to leave (as we saw above) and think less is to be lost by laying them off.
We’ll throw a few other possibilities out their for your consideration:
- perhaps top school don’t prepare students well for firm life (too esoteric)?
- entitlement runs deeper?
- firms are choosing the people they think are most likely to land on their feet elsewhere, in an effort to assuage their guilt?
- top-school graduates are being out-hustled by graduates of lower-ranked schools, who are more grateful for the opportunity, more afraid of blowing the big chance, or more determined to prove they belong?
One trend is clear, though: firms are
leveraging the skills of small cohorts of senior attorneys over larger groups of recent graduates.
Unfortunately, it’s impossible to tell whether that’s a cause (clients have shunned junior lawyers for some time) or effect (fewer juniors to do the work) of layoffs.
There’s lots of other interesting information, so we’re waiting with bated breath for the final version.
The early draft of the paper is embedded below. Make sure to read the methodology, including how they correlated the layoff tracker data with the firms’ rosters.