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demand. This works out pretty well for the firm, because
different practice areas are cyclical or counter-cyclical and
that helps stabilize their finances, but it's not so great for
the clients.
So where does this leave us? I've addressed the question of
why (large, top-tier) law firm billing rates are so high: enormous
overhead, sticky billing rates and salaries, and a general
institutional insensitivity to costs until clients kick and
scream about them. But what about that bimodal distribution
and all of those out-of-work lawyers?
• In placement, law schools and students focus on the
large, top-tier firms to the exclusion of most other opportunities.
This is because they pay the highest starting
salaries and are prestigious names to have on the resume
at the beginning of a legal career (see "obsession with
prestige and rankings"). This isn't just about greed and
status; student loan burdens can be huge (another subject)
and recent graduates are rightly concerned about
earning enough to pay them off. Particularly at top-tier
law schools, there's a big push to land jobs at the big firms,
and in good times, a large proportion of each class gets
those jobs. (In bubble times, there's a bidding war over a
fixed supply of perceived "top students" — as they say, only
ten schools can be in the Top Ten, and only 25% of the
class can be in the top quarter of their class.) It's always
been the case that smaller firms, government jobs, judicial
clerkships, and public interest jobs for lawyers pay much
less than the big firms. But with demand shriveling up for
new grads to staff the big, top-tier firms (perhaps related
to the fact that said firms seem to think it makes sense to
bill out rookie lawyers at $250+ an hour), that pushes everyone
down the pecking order. Small and mid-sized firms
usually hire a small number of associates, particularly at
the junior level. They hire only when necessary, based on
immediate needs, vs. planning ahead for whole "classes" of
new associates as the big firms do.
• The middle is missing. There used to be a class of midsized
regional firms with billing rates and salaries significantly
lower than the big national/coastal firms, but