One  year ago, the job market on Bay Street was red hot. The 15 largest law firms in Toronto had hired back 208 of their articling students as first-year associates. It had been five years since Bay Street posted a number that high.

This year, the job market has cooled, but it remains healthy. At the conclusion of the 2017–18 articling term, those same firms hired back 197 students as associates, according to PrecedentJD’s exclusive Hireback Watch. This is a modest drop-off, but keep this in mind: in 2016, the largest firms only hired back 184 of their articling students. At that time, it looked like the job market could be heading into a tailspin. The numbers from this year, however, demonstrate that the demand for associates is holding strong.

“There’s a continued upward trajectory in business on Bay Street,” says Natalie Zinman, the director of student programs at Gowling WLG. “Firms are busy and they are seeking to keep as much of their talent as possible.” Gowlings, for its part, hired back 12 of its 15 articling students (with one opt-out), posting an impressive 86-percent hireback rate.

Gowlings is not the only firm with work coming down the pipeline. “We’ve been consistently busy this past year,” says Susan Pak, the director of student programs and professional development at Stikeman Elliott LLP. As a result, the firm hired 17 out of its 20 students (with three opt-outs). “This is good news for students who are looking for opportunities on Bay Street.”

So why are firms so busy? In part, because of the recent upsurge in the number of blockchain, fintech and cannabis companies. “This has led to increased demand in all aspects of our practice,“ says Zinman. “That includes intellectual property, litigation, real estate, securities and business law.”

But as the market for associates holds steady, the demand for articling students continues to lag. Back in 2009, Toronto’s largest firms took on 314 students. This past year, that number fell to 251. This statistic is unlikely to recover. “Most corporate clients are sending fewer straightforward tasks to law firms,” says Jordan Furlong, the principal of the legal-consultancy firm Law21. “These tasks include document review, contract drafting and due diligence. They’re giving this work to their in-house lawyers or outsourcing it to third-party alternatives.” Such tasks used to fill up an articling student’s time. Now, that work has started to dry up. “So firms don’t need to hire as many students as they used to,” says Furlong. “I don’t see that changing.”

Good news and bad news

This firm-by-firm breakdown of Bay Street’s job market shows that, in the past decade, the percentage of articling students hired back as first-year associates has soared. But, at the same time, the total number of articling students has collapsed