Is the Insanely Early BigLaw Hiring Schedule a Real Collective Action Problem?

My latest Verdict column discusses the news that the University of Michigan has adopted a policy (beginning in fall 2027) under which undergraduates' first-semester grades will be masked. And when I say the column discusses the news, I mean that literally. While I say a few words about the costs and benefits of the UM policy, I am mostly interested in the fact that it has garnered so much attention. Colleges and universities around the country have numerous policies regarding academic matters such as grades. In any given year, some of them change. Why was this change national news? The answer, I suggest, is that it fits a pre-existing narrative about the place of universities (especially elite ones) within the culture war.

In the course of describing the new policy, I note that its main purpose is to ease some of the anxiety that new college students feel, which is more acute now than in the past because of an overall increase in anxiety and other mental health challenges faced by the current generation of adolescents and young adults. I also briefly draw a comparison to the situation facing new law students as a result of a law firm hiring schedule that has become insanely front-loaded in the last couple of years. In the balance of this essay, I'll elaborate that development, discuss some potential fixes that have been proposed, and then tentatively float one of my own.

For decades now, law students who are interested in working for a major law firm have been able to obtain entry-level associate offers chiefly by working at such a firm for the summer after their second year of law school, doing a reasonably good job, and then getting and accepting an offer to come work for that firm on a full-time basis after graduating from law school (or after a judicial clerkship following graduation). When I was a law student in the late 1980s, the summer associate hiring process occurred mostly in the fall of the second year of law school. Firms would send teams of interviewers to law schools (or to satellite locations) for screening interviews and then invite those students who passed the screeners to visit the firm. The process was typically completed by the end of the first semester of the second year of law school or a bit later.

With some minor tweaks, that continued to be the process until very recently. One of the minor tweaks was to move the screening interviews to the end of the summer before second year, but that didn't really affect anything, because it still meant that firms were making post-2L-summer-associate offers based on two semesters of grades (from the first and second semesters of the first year).

The process began to change in 2018, when the National Association of Law Placement eliminated its timing guidelines. It changed even more dramatically since the COVID-19 pandemic, when screening interviews and many callback interviews began to be conducted via Zoom. No longer tied to the law school screening processes, firms conducted interviews on their own schedule. They then leapfrogged each other, starting the screening successively earlier and earlier to gain an advantage. As a result, the process now occurs mostly in the very first semester of law school. That's right. The law students beginning their legal studies over the coming weeks must contend not only with the challenges that have beset prior generations of students, plus the anxiety of whether AI will render useless the education for which they are paying a fortune, but also putting together materials to apply for what are for most of them their post-graduation jobs.

Indeed, students are understandably putting together their application materials for biglaw jobs even before law school begins. At Cornell, our admissions office now coordinates with our placement office to guide and assist entering students with job applications even before they arrive on campus. Similar support for what we call 0Ls is being offered at other law schools as well.

Nobody thinks the super-early start to the law firm hiring process is good for anyone. David Lat appropriately calls the new schedule a "lose-lose-lose" proposition. Professors Jeanne Fromer and Mark Lemley likewise decry the madness of the current situation. They offer different solutions to what everyone seems to agree is a collective action problem.

If the major law firms could all agree on something like the old system, everyone would be better off. The difficulty is that antitrust law forbids that kind of agreement among competitors. In addition, even if antitrust law did not forbid voluntary cooperation, the result would be a cartel, with the usual tendency of cartels to break down due to the gains available to defectors. The cartel solution to collective action problem has its own collective action problem.

The classic solution to a collective action problem is regulation with sanctions for defectors. Lat discusses two possible sources of such sanctions. One is a collective of law schools. The difficulty there is that the law schools themselves could be charged with collusion in violation of antitrust laws. Taking note of an open letter from student representatives at a variety of schools, Lat also suggests that the American Bar Association (ABA) could build into its accreditation standards for law schools restrictions on early recruiting. Given the negative impact of the current schedule on first-year learning, that does seem like a natural fit. The difficulty is that the ABA itself might then be deemed complicit in an antitrust violation. Moreover, as Lat notes, the Trump administration has the ABA in its sites as an unduly "woke" institution. Under the circumstances, the ABA is unlikely to take the risk of action subject to some legal doubt.

Fromer and Lemley have a proposal that would avoid the antitrust problem. There has long been a so-called state action exception to antitrust law. If the state itself favors cooperation or monopoly via regulation, that is not an antitrust violation. And, as Fromer and Lemley also note, the Supreme Court has already held that state bar rules promulgated by state courts count as antitrust-exempt state action. Thus, they propose that state high courts promulgate a rule requiring firms to hold open any offers they make for post-2L summer associate positions until at least October 1 of the 2L year. Doing so would mean that a firm that delayed its recruiting until the end of the summer after the first year of law school would be at no disadvantage relative to firms starting earlier. Thus, presumably, all firms would delay in this way so that they could obtain more information about the students they are screening.

I think the proposal of Fromer and Lemley could work, though, as they note, it depends on state high courts acting, and many might not, especially if the issue came to be seen through a partisan lens. That risk, they say, would be mitigated by actions of key state high courts, like those in California and New York.

I support the Fromer/Lemley proposal because it looks like it does not run afoul of the antitrust laws and holds the potential actually to respond to a collective action problem. But I wonder whether there is a real collective action problem here.

By that, I do not mean that we are not seeing what we are seeing. The timeline has been pushed forward, and I have no doubt that has happened because top law firms don't want to be left behind in the scramble to snatch up the best future lawyers. But I wonder whether some firms might do better (or at least as well) in the current regime by waiting. My suggestion is that, seen from the right perspective, there is no genuine collective action problem.

To see why that might be so, consider what a summer associate program is: Students who have just completed two years of law school are given some not-very-important assignments (because it would be irresponsible to give important work for clients to non-lawyers) subject to at-best uneven supervision (because it would be bad for the firm's bottom line for senior associates or partners to spend a lot of time supervising summer associates). In exchange, the summer associates are wined, dined, and shown a good time. I wrote about how this worked in a parodic April Fool's essay in 2012. Summer associate programs at the top firms aren't quite as lavish as they were before the 2008 financial crisis, but they are still perk-laden experiences geared at recruiting.

It shouldn't work on savvy students. Here's my reconstructed recollection of a joke I heard decades ago to illustrate why:

A man flatlines in a hospital operating room. To his chagrin, he finds himself falling and passes through the gates of hell. To his surprise, hell looks like a resort hotel. There are people lounging poolside, fancy restaurants, and all sorts of activities and creature comforts. Presiding over all of it is a smiling Satan in a t-shirt reading "Welcome to Hell: Aren't You Glad You Were Bad?" Suddenly, the man is rapidly rising and finds himself back in his body, alive. It was only a near-death experience. He resolves to live the rest of his life as an amoral libertine, reasoning that the worst that can happen is that he goes to hell, which would be great. He sins for the rest of his days. Eventually he dies for real and once again finds himself falling. He lands in a stinking wasteland that is unbearably hot and in which demons are tormenting the residents endlessly. He sees Satan, no longer smiling nor wearing that t-shirt. "Hey, Satan," he says. "What gives? I was here 20 years ago and it was nothing like this." Satan replies: "That was our summer associate program."

Unless they're incredibly naive, summer associates should not be persuaded by perks. Nor should they place as much value as they do on a job as a summer associate as a pathway to a full-time job. True, in good times, most summer associates get "permanent" offers, but I put those scare quotes there for a reason. Law firm associates are generally employees at will who can be fired for any reason (other than the limited ones proscribed by anti-discrimination law and similar bodies of law). Indeed, in bad times, law firms have been known to revoke "permanent" offers previously made to summer associates before they even show up for a day of work.

So, from the summer associate's perspective, the job is less than it is generally cracked up to be. To be sure, contrary to my claim above that the summer associates don't get very good assignments, the story linked a few paragraphs up says this:

The summer associate experience has historically been somewhat artificial, with many firms offering made-up tasks and discrete research assignments that bear only mild resemblance to actual responsibilities. However, the recession prompted an increased reliance on summers at many a cash-strapped firm, and offering 'real' work soon became not only a priority but a necessity across the profession.

Color me dubious because the obligations to clients and financial dynamics I mentioned above still apply. In any event, even if the summer associate work experience now is more genuine than pre-2008, that only makes it somewhat more valuable for the summer associates themselves. From the firm's perspective, a summer provides only very modest means to evaluate summer associates for full-time offers--and that's after the field has been cut down by choosing post-2L-year summer associates based on at most first-semester 1L performance. I'd bet that a firm could make at least as good, maybe better, hiring decisions if it had five semesters of grades, journal and paper-writing experience, performance in a law school clinic, and other indicia of legal acumen to evaluate before making offers.

And that leads me to my proposal. Some prominent biglaw firm could announce that it would shrink or eliminate its summer associate program and would henceforth fill most or all of each entering class of associates from a pool of 3L applicants who had spent their prior summer working somewhere else. As a sweetener, the firm could offer large bonuses to such applicants. (The money for these bonuses would come from the savings to the summer associate program). Interviews could be conducted two years later than they are now conducted but still with plenty of lead time. The pool would be expansive.

Accepting an offer from a law firm is not necessarily a contractual understanding, so 3Ls who accepted their offers from their post-2L summer employers would be able to renege and then apply for and take the competing offer. If the firm offering this later approach is prestigious, as I'm hypothesizing, there probably wouldn't be negative professional reputational consequences to students from summering for X, accepting X's offer, but then reneging and accepting Y's offer (and signing bonus). But if that proves to be an obstacle, firm X could conduct its interviewing and hiring just before or during the actual running of the competing firms' summer programs. That would still give X a much better sense of applicants' law school performance.

There is a model for what I'm describing. Before law firm hiring broke down, judicial clerkship hiring broke down in more or less the same way, with applications for some "off-plan" judges now occurring in the first year. Some savvy judges have found that they can get excellent law clerks simply by waiting. While their peers hire earlier and earlier, they actually prefer 3L applicants or applicants who are already out of law school. To my knowledge, judges who proceed this way are quite happy with the outcome.

So, if you are a lawyer with hiring responsibility at a prestigious Biglaw firm, and if you are frustrated by the maddening turn that the process has taken, I offer you, for free, an alternative: get out, or nearly out, of the summer associate program game entirely. And if no firm takes me up on my suggestion, I'll keep my fingers crossed that state high courts adopt the Fromer/Lemley proposal.

by Michael C. Dorf