Law Schools Push Recruiters

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Thousands of interviews for jobs at law firms are taking place now as top law schools, under mounting pressure to help indebted students snag jobs, increasingly push major law firms to recruit in August, months earlier than in previous years.

Only about one-quarter of last year's graduating law-school classes, down from 33% in 2009, landed positions with big law firms, according to the National Association for Law Placement, an organization that collects employment data. Graduates from the top 25 law schools likely fared better, although NALP doesn't provide data specifically for that group.

Law firms follow an unusual tradition of recruiting the lawyers they eventually plan to hire two years in advance. For example, they are interviewing second-year law students now for summer associate positions that start in May or June 2012. At the end of the 2012 summer, the firms expect, they will then invite almost all the summer hires to work full-time as junior lawyers, likely starting in September 2013.

Hiring by major law firms peaked in 2007 before the onset of the financial crisis. Recruiting has since dropped significantly, due to the recession as well as more lasting changes to the industry, including new technologies that enable law firm partners to do more work with less help from junior lawyers.

By forcing the big firms to recruit in August, rather than as late as the end of October, as in previous years, law schools are hoping to give their students an edge in the competition. "There was a race to the front of the line by law schools," said Keith Wetmore, whose title is chair of Morrison & Foerster LLP, which is sending partners to 28 campuses this month to recruit students for its 2012 summer associate class.

In 2000, for instance, seven law schools held their interviewing weeks in August. By 2009, the number had increased to more than 70, and this year, the figure will top 100, according to Mark Weber, assistant dean for career services at Harvard Law School.

During the market crash of 2008, both Harvard and Yale law schools "went essentially last" in the recruiting season, with their interview weeks in September and October. "Their students did get hurt, and got fewer offers," said James G. Leipold, executive director of NALP. "Our students still had great jobs, but you do even better when you're at the beginning of the [recruiting] process than the end," Harvard's Mr. Weber said. A spokeswoman for Yale Law School said she couldn't comment.

There are a few signs of improvement in the legal jobs market. But the outlook could change suddenly amid market turmoil of recent weeks.

Several major law firms said they are planning to increase the size of their 2012 summer associate classes, including Bingham McCutchen LLP, which plans to hire almost 29% more students than it did than last year, according to Ari Katz, director of legal recruiting.

"It's going to be a little crazy in the next couple of weeks," said Carol Sprague, director of associate and alumni relations and attorney recruiting at Skadden, Arps, Slate, Meagher & Flom LLP, which has 2,000 lawyers globally. The firm intends to increase its 2012 summer associate class by more than 66% to at least 150. But that's still half the number in its 2007 summer associate class.

—Nathan Koppel contributed to this article.

Write to Vanessa O'Connell at vanessa.o'connell@wsj.com

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Party Ends at For-Profit Schools

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For-profit colleges are facing a tough test: getting new students to enroll.

New-student enrollments have plunged—in some cases by more than 45%—in recent months, reflecting two factors: Companies have pulled back on aggressive recruiting practices amid criticism over their high student-loan default rates. And many would-be students are questioning the potential pay-off for degrees that can cost considerably more than what's available at local community colleges.

"People are just frozen or deferring, delaying decisions to go to school," said DeVry Inc. Chief Executive Daniel Hamburger in a conference call earlier this month. "The average person in the U.S. has become much more risk-averse and cautious when it comes to spending or committing to anything. It's unrealistic for us to think that education would be immune from this."

Bloomberg News Undergraduate new-student enrollment at DeVry College has declined.

Undergraduate new-student enrollment fell 25.6% at DeVry's namesake university in the quarter ended June 30. The company—considered by many industry watchers as one of the stronger school operators because of its portfolio of business, technology and health-care courses—had earlier forecast earnings growth for the current fiscal year but now expects relatively flat bottom-line results.

Per-share earnings at Corinthian Colleges Inc. are expected to be down about 72% when it reports results Tuesday, according to analysts' forecasts. The company, with offerings in health care and criminal justice among other areas, has seen its stock sink to 11-year lows, closing Monday at $2.10, off from its 52-week high of $7.35. In early 2009 the stock was trading about $20 a share.

Education stocks dived as reports of dropping enrollments at for-profit schools emerged. Many students are re-considering their options, including attending community colleges, Melissa Korn reports on the Markets Hub. (Photo: AP Photo.)

At Corinthian, which implemented changes to its recruiter compensation in April, new-student enrollment declined 21.5% in the first calendar quarter, compared with an 8% decline in the previous quarter.

A representative from Corinthian declined to comment, citing a quiet period before releasing earnings.

Enrollment at for-profit colleges soared during the recession, amid heavy advertising that appealed to suddenly jobless people needing new skills. But while the advertising continues, a number of for-profit schools including Corinthian, Apollo Group Inc. and others have tamped down aggressive recruiting. They've cut back on recruiter bonuses based on factors such as how many students make it past their first term. Apollo, operator of the University of Phoenix chain, has been criticized for targeting injured veterans and homeless adults to fill seats.

Apollo spokesman Alex Clark said the company's policy on such tactics is "clear and unambiguous," and it doesn't allow employees to visit homeless facilities for recruiting purposes. "Any employee who violates this policy faces disciplinary action up to and including termination," Mr. Clark said.

As for military students, Mr. Clark said University of Phoenix "is proud to meet the needs of active-duty military students and veterans of the armed forces."

Some companies are feeling pain not only from students shying away but from their own tightened admissions standards. Washington Post Co.'s Kaplan Higher Education, like Apollo, now requires certain students to participate in a trial program before enrolling and paying tuition. Kaplan reported a 47% decline in new-student enrollment for the June quarter. Even without the orientation program, new-student enrollment would have dropped 36% in the quarter.

Corinthian briefly stopped accepting students without a high-school diploma, but reversed its policy this spring and once again admits students who take the "Ability to Benefit" test intended to show they would benefit from higher education.

Cutting recruiter commissions had a rapid and profound effect at Capella Education Inc., which introduced a new pay structure in January: New-student enrollment dropped 35.8% in the first quarter, compared with a 10.7% decline in the period immediately before the launch.

The specter of a hefty debt load dissuaded Jason Tomlinson from enrolling to study business at Berkeley College, a for-profit school with locations in New York and New Jersey. Mr. Tomlinson, now 25, said he would have had to pay more than $20,000 per year, for four years, for that school's bachelor's degree program.

On Mr. Tomlinson's $8-per-hour salary as a part-time sales associate at the Gap, "it just didn't seem realistic" he said. "I really did not want to go into that much debt."

Mr. Tomlinson enrolled in LaGuardia Community College, where he pays $3,600 per year for his full-time associate-degree program in business management and works at the school's fitness center to help cover expenses. A barber in his spare time, Mr. Tomlinson plans to open a high-end men's day spa after graduating with his associate's degree in business management this spring.

State and federal investigators began turning up the heat last year on for-profit schools as default rates on federally backed student loans began to climb. Even before the enrollment boom, default rates—at 11.6% in 2008, the latest year available— were about double that of public colleges. State officials, accrediting agencies and others have begun investigating the schools' recruiting efforts, financial-aid programs, job-placement rates and other business practices after a U.S. Senate committee started a series of hearings on the schools last summer.

Earlier this month, the Justice Department and four states sued Education Management Corp., alleging the company's compensation system for its admissions personnel violates the federal Higher Education Act because admissions employees had been paid based on how many students they recruit.

The company's legal adviser said the lawsuit's claims were "flat-out wrong."

Write to Melissa Korn at melissa.korn@dowjones.com

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