Cooley LLP, a Silicon Valley-based law firm, has postponed the start date for its incoming class of new associates until next year. The firm, whose client list includes top tech companies, has pushed back the start date for its newest class of first-year associates from November to January 2024. The delay follows a move by the law firm last year to lay off 150 attorneys and staff across its US offices.
Cooley declined to comment on the postponement of the start date. However, according to sources familiar with the situation, the delay is likely due to shifting economic conditions that have stalled demand for business transactions work and forced some firms to trim their headcounts. Summer Eberhard, a legal recruiter at Major Lindsey & Africa, said, “Other firms may follow suit as they try and cut costs to keep the associates they have right now.”
The delay at Cooley follows fresh rounds of associate layoffs at other law firms, including Kirkland & Ellis and Gunderson Dettmer. Last week, Kirkland & Ellis, the world’s largest law firm by gross revenue, made cuts to its associate ranks after mid-year performance reviews.
Meanwhile, like Cooley, a top legal adviser in Silicon Valley, Gunderson Dettmer said it was letting go of 10% of its attorneys, paralegals, and staff “in response to current macroeconomic and market conditions.” The firm also said it might delay first-year associate start dates.
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The delay in the start date for Cooley’s first-year associates from the graduating class of 2023 is not an isolated incident. Junior associates have had a tough time over the past few years, with some law firms delaying the start dates for their incoming first-year classes during the height of the pandemic. Others made pay cuts, layoffs, or other moves to trim costs.
By 2021, booming transactions markets created a frenzied demand for associate talent, forcing firms to hike salaries and roll out bonuses. However, some firms found themselves with more associates than work as demand later cooled. Katherine Loanzon, a New York-based managing director of Kinney Recruiting, predicts that other firms will follow Cooley’s lead in delaying start dates, particularly firms that overhired in 2021 and are expecting large first-year classes this fall.
Eberhard said, “Like the financial crisis in 2008/2009, firms are having to make difficult decisions, and we won’t likely see the impact of those decisions for several years.” It is also unclear whether firms will change their approach to recruiting going forward, according to Loanzon. She said, “It’s probably a lesson to everyone that sometimes maybe, it’s smarter to be a little bit more conservative in planning the future.”
Despite the delay, Cooley has committed to providing a $10,000 stipend to first-year associates during the delay period. The move is expected to significantly impact the legal industry, particularly law firms that are already struggling to retain their associates. However, whether other law firms will follow Cooley’s lead in delaying start dates remains to be seen.
In conclusion, the delay in the start date for Cooley’s first-year associates reflects the changing economic conditions and the need for law firms to cut costs. While other firms may follow suit, the impact of the delay on the legal industry remains to be seen.