Canadian law firms can be pretty mysterious. Sure, they publicize the details of their biggest deals and the names of their newest partners. But if you go fishing for hard numbers about their businesses, you won’t catch a thing.
In the United States, by contrast, you can find all sorts of juicy data on the largest law firms, from their annual revenues to their profits per partner. In Canada, firms disclose nothing of the sort — except, that is, for our annual Hireback Watch. For the past nine years, Precedent has tracked the number of articling students that law firms across Toronto hire-back as first-year associates. And, today, we launched this year’s version of the chart, which will continue to grow in the coming weeks as more firms release their data. (Follow us Facebook and Twitter to receive updates as numbers roll in.)
So what can you glean from the numbers? Well, to start, you can find out which firms hired back the greatest percentage of their students. This information is irresistible to law students. The reason is obvious. When a firm posts a strong hireback rate — say, 90 percent — it suggests that if you article there, you’ll have a great shot at working there as an associate. But beware: these numbers bounce around. In 2015, for instance, Cassels Brock & Blackwell LLP hired back eight of its 17 students, earning a hireback rate of 47 percent. The next year, though, the firm hired back 14 out of its 17 students (with one opt-out). And if you head to this year’s chart, you’ll see that Cassels hired back all 12 of its students. So don’t let a single bad year sway your thinking too much. (In fact, we have a whole post to help you responsibly interpret the hireback numbers.)
What’s most interesting, though, is what the Hireback Watch reveals about the broader legal market. One thing to watch for this year, for instance, will be the total number of articling students who get hired back at the 16 largest firms in Toronto. We reveal this number at the end of each hireback season, once we have data in from all the big firms. That’s how we know that, in the past decade, these firms have steadily reduced the number of articling students they hire back, falling from 218 (in 2009) to 188 (in 2016).
This dip is the symptom of larger industry trends. As we reported in an in-depth feature on Big Law this past winter, many of the legal tasks that once made up the bulk of a first-year associate’s workload — document review on major law suits, due diligence on corporate mergers — bring in far less revenue than they once did. These days, firms outsource this work or, if they still do it in-house, use staff lawyers (rather than partner-track associates) along with legal technology to complete it at a lower cost. In each case, the result is the same: firms don’t need to hire as many first years.
In the coming weeks, watch our chart to see if this trend continues. And, hopefully, Toronto’s legal market won’t seem so mysterious.