Oregon State Bar Bulletin — DECEMBER 2014







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The Great Recession’s impact on law schools has been widely chronicled, but perhaps less noted have been the profound personal and ongoing professional effects the largest downturn since the Great Depression has had on the actual individuals who graduated during that span, roughly 2008-10.

According to The Wall Street Journal, only 55 percent of the class of 2011 law school graduates were employed full time as lawyers nine months after graduation. Starting salaries fell $9,000 between 2009 and 2010, and 85 percent of law school grads in 2012 were facing an average debt load of $98,500. The National Association for Law Placement reported that the number of new lawyers going into sole practice increased from 3.5 percent in 2008 to 5.5 percent in 2009, at that time the biggest one-year jump since 1982. From May 2008 to June 2011, the legal services sector lost about 54,000 jobs.

These recession-era law classes were the first to graduate into the new, terrible economy after the collapse that began in 2008. Many went into sole practice by default because firms were not offering summer clerkships or hiring graduates. Others left the state or sought work in other fields.

“I think there are a lot of people in my class who voluntarily or involuntarily are not practicing law, or who are not practicing in their intended field, because of how bad the economy was when we graduated,” says Kelly Sherbo, who graduated from the University of Oregon School of Law in 2009.

But in that discouraging climate, a resilient group of new Oregon lawyers figured out how to survive in that changed economy. And now, approximately five years after obtaining their degrees, they share their struggles, strategies and successes, as well as cautionary advice to would-be attorneys. The Oregon State Bar Bulletin talked with six Great Recession graduates to ask them about their experiences and to find out how they are faring.

In 2009, ‘No Prospects to Speak Of’

A sixth-generation native Oregonian born and raised on the south coast, Levi S. Gatov Johnston began to explore pursuing a legal career when he was still in middle school.

He studied in France during his junior year while earning a bachelor’s degree in international studies from Willamette University. He then worked in Japan for three years teaching English in a small farming village, before returning to the state to attend Lewis & Clark Law School. He got his degree in 2009 and earned a certificate in general business law. Members of his class realized that finding a job would be challenging, but few understood the extent.

“There were no job prospects to speak of,” he says. “No one was keen to hire a lawyer. I knew people who graduated summa cum laude and didn’t have anything.” He figured if “those are the folks who are struggling and starting their own practices,” the problem was worse than anyone had recognized. Only three or four of his classmates found work immediately, and “the rest were left to their own devices,” Johnston says. He notes that for one position open in legal aid, 300 people applied. Others were seeking jobs as paralegals or legal assistants, volunteering, starting their own practices, or working in jobs unrelated to law. He knew one person who worked in a clothing retail store for a year. “That was normal. It was rough.”

Johnston had gained experience during law school at Lewis & Clark’s Small Business Legal Clinic, as an intern and temporarily as student director while the administrator was on maternity leave. When he graduated, he figured something would come up within the next six months or so, but nothing was happening, he says. He started receiving referrals, and his wife said, “Why don’t you start your own firm?” He did some contract work for a firm and set up a “virtual office,” with a laptop computer and a telephone. He used one of the firm’s cubicles and rented the space. He did that for 18 months.

Then, in June 2011, Johnston and two other young attorneys, Raife R. Neuman and Ryan Vanden Brink, opened their own firm, Intelekia Law Group, where he handles corporate transactions for small businesses and contracts to do litigation services for other firms. After three-plus years, “We’ve been able to pay our bills and pay ourselves,” he says. “I don’t feel we’ve made it yet.” In their current arrangement, the three partners have freedom and the security of not getting laid off, but they don’t receive a regular paycheck every month. He expects they will need another two to three years “before we can say, ‘This is enough; we’re really comfortable.’ ”

He views the time he finished law school philosophically. “It was hard for everybody,” he says. “If you were looking for work in anything in 2009, you were out of luck.”

As to whether he would follow the same route of going to law school had he known what was ahead with the economy, Johnston tentatively says he would. The time and money he invested in his legal education “haven’t paid off” yet, he says. People gain a law degree with a professional expectation, he says:

“Law school is not a purely academic pursuit; it enables us to enter a specific profession, and the vast majority of students, like me, enter law school with the expectation of employment as an attorney upon completion.” He hopes that in five years, he will have no hesitation in saying yes, he would have pursued the same path.

By contrast, Kelly Sherbo (formerly Kelly Fahl) entered law school with the intention of using her law degree as a stepping stone to her career goal of working in policy development and analysis.

Now at Portland State University in the third year of a doctorate program in public affairs, she works days full time for the Multnomah County Drainage District. A native of Redmond, Wash., Sherbo majored in environmental studies and international economic analysis at Pacific Lutheran University in Tacoma, Wash., then graduated from the University of Oregon School of Law. She thought having a law degree would help her in doing policy work, and she says it definitely has been an asset in advancing her career development.

On the other hand, the economic environment when she finished law school in 2009 became a factor when the time came for job interviews. “I imagine a lot of law graduates were applying for jobs that had nothing to do with law,” and potential employers cast a skeptical eye seeing her J.D. on her resume. Some said, “What’s going on here? This person is applying for a nonlaw job,” she recounts. Some of the jobs didn’t exactly match a legal-degree background.

But Sherbo was undeterred, because her plan was to get a Ph.D., and PSU appealed to her because the school recognized her law degree as an asset, considering it the equivalent of a master’s degree in working toward her doctorate there. A PSU professor’s connections also helped her land the job with the drainage district, which is responsible for stormwater conveyance and maintaining levees along the Willamette and Columbia rivers to help prevent flooding. About half of her job is as a policy adviser, either giving legal advice or coordinating with outside counsel. The rest is making decisions on the policy side.

Sherbo enjoys the work, and she hopes it might become a permanent job. The additional education hasn’t cost her a cent, as she obtained a scholarship and worked as a graduate research assistant. However, law school was “really expensive,” especially having to pay out-of-state tuition. She says if she had that to do over again, she would either have gone to law school in Washington or stayed in Oregon long enough to obtain residency before entering school. She also might have reversed the order in which she proceeded for law school and graduate school.

“I would definitely counsel others, if they’re thinking about going to law school, to be really sure that’s what they want to do,” she says. “If they’re not entirely sure, they should wait.” Her husband, David Sherbo-Huggins, whom she met in law school, knew from the get-go that he wanted to be a criminal defense attorney, and right after graduating from the U of O, he landed his “dream job” with the Office of Public Defense Services in Salem, she notes. “The people who really succeeded (during the economic downturn) went to law school knowing exactly what they wanted to do.”

For herself, she has no regrets. “I’m exactly where I want to be,” Sherbo says. “I’m really glad I ended up where I am. The Ph.D. program has been an affirmation that I chose the right career path. I’m happy I ended up doing what I’m doing.”

From Law Clerk to Sole Practice

Family law attorney Myah Kehoe “wanted to be a lawyer from when I was little,” she says. Her mother and stepfather were marriage and family therapists, and her father was an entrepreneur. Kehoe believes their combined influence was what prompted her to choose family law and to be in practice for herself.

After growing up and graduating from college in California, Kehoe completed her J.D. at Willamette University College of Law with the expectation of eventually opening a sole practice. “I knew I wanted to go into my own practice, owning my own business,” she says. But initially, her plan was to work for a family law firm following law school graduation.

However, she finished school in May 2007 and took the bar exam that summer, “right as the economy was collapsing. I didn’t see any openings.” She got hired by Multnomah County Court as a data entry clerk, which eventually turned into a facilitator position, helping pro se clients and processing restraining orders. “I learned all of the paperwork that was needed for divorce,” so she was able to gain skills on the job that she could use later.

After 18 months of working at the courthouse, Kehoe was offered a job by a judge, but she turned it down. Kehoe was tired of being a clerk and wanted to be a lawyer. “The judge told me, ‘Are you crazy? No one is hiring.’ She had me reading Outliers, ” a best-selling book that emphasizes how proper timing helps make people successful. But reading that book “made me more determined to start my own practice,” she says. The prospects were daunting, though.

“I didn’t have any money and had a ton of debt,” she says. Kehoe paid her first PLF fee, sent out emails and met clients at coffee shops. After about a month, she rented a space via barter, agreeing to do work for another lawyer who offered her a desk in exchange. At that point, a good friend of Kehoe’s from law school also moved into the office to help the lawyer, and he and Kehoe became law partners for a brief time. After 2 1/2 years of practicing, Kehoe opened her own office downtown, sharing an office suite with seven other attorneys.

“I’m really glad I did it, glad I didn’t stay at the courthouse,” Kehoe says. “Originally, I regretted not having some law firm experience. I don’t think I missed that much.” She figures she learned what she needed on her own, and she heard from other young attorneys who worked in firms that they didn’t receive much help. “I have an assistant. Things are easier now.”

Kehoe has a firm website and receives referrals, mostly from other attorneys. “That’s by networking.” She joined several organizations, committees and boards, most notably the board of the Oregon Trial Lawyers Association, on which she is serving her third term. She has met a lot of attorneys and built trust with them, so that they feel comfortable referring clients to her.

“You still get the camaraderie of working with a firm by joining organizations, the feeling of people being with you even though you’re on your own,” and it has been the most fruitful way for her to build her practice.

Kehoe asked the PLF’s Practice Management Advisor program for help in setting up her practice. “The Practice Management people came out, and they’re wonderful and really supportive. It’s a great resource for people.”

Kehoe also asked questions of other lawyers who had established a sole practice. Now she herself has spoken at CLEs on this topic.

Her advice to other young lawyers starting out is to “pick one practice” to focus on rather than “dabbling” in areas in which they might not have as much interest or expertise. If you develop a reputation and experience in a specialty, other attorneys are more likely to refer clients to you, she believes.

As to whether she would do it all again, Kehoe isn’t sure.

“Had I known how much debt I would accumulate in law school, I honestly might have made a different career choice,” she acknowledges. “That is not to say I regret where I am today. I sincerely appreciate the education I received, I enjoy working with members of the Oregon legal community, I am thankful that I get to do a job that I love, and I am very happy with the life I have made, but the debt from law school is truly an overwhelming burden.”

After Becky Straus, now legislative director of the American Civil Liberties Union of Oregon, completed her degree at Lewis & Clark Law School in 2009, she considered leaving Portland. Only a small percentage of the classmates she knew remained in the area beyond their first year of graduating, due to the scarcity of job openings.

“Law school didn’t mean anymore that you would come out an employed lawyer,” she says. Even some of the few graduates she was close to who remained in town never “settled into the legal world they wanted,” she adds. Straus thought of returning to San Francisco, took the California bar exam, then spent three months in Ecuador to improve her Spanish. She decided to return to Portland, where she passed the Oregon bar exam.

A native of Chicago, Straus had obtained a political science degree at a small liberal arts college in Ohio. Anticipating that law school might be her next step, she worked in a couple of legal-related jobs during college. “I was looking for social justice work through the law,” she explains, and she was able to find the setting that fit her in Lewis & Clark’s Public Interest Law program. She took advantage of every opportunity during law school to do fellowship work and volunteer work to gain experience so that she would be more competitive after she finished and began applying for jobs.

Once she did, she obtained a lobbying position with the Oregon Law Center, a one-year contract position. At the end of that year, layoffs hit the agency, and her contract wasn’t renewed. She then did some paid work for the Community Alliance of Tenants and some work for other attorneys. In 2011, the ACLU post opened up, and she got the job.

“I absolutely love the work,” Straus says. “One of the wonderful things about being a lawyer is, you can see the law from a holistic perspective. The ACLU does its work in so many different arenas,” and she is able to use her legal training to help the organization determine the types of advocacy to pursue.

She thinks she would have followed the same path even if she could have predicted the enormity of the economic downturn and the difficulty of finding a job. Her reason is that her focus was not on being in a strong financial position, but in “doing the work I wanted to do.” She hopes to benefit from a federal program that forgives loans for individuals who stay in public interest work for a set period of time.

Straus says the aspect of the recession that probably most affected her and other new attorneys finishing school around 2009-10 who wanted to practice in public interest law was the move by some big law firms to cut their first-year associates’ salaries in half, then send them out to work in nonprofit organizations for the remainder of their workweek. She says this action usurped the public interest attorneys who were coming out of school searching for work. But on the plus side, it gave these organizations “high-caliber lawyers” at no cost to them, and it helped those lawyers’ professional development. “I really have mixed feelings about it,” Strauss says.

“Overall,” she says, “I feel very fortunate to have landed in a place I love and can live in Portland.”

Teaming Up

Emily Elison and her law partner, Pete Castleberry, still were students at Lewis & Clark Law School when they decided to open their own practice together once they obtained their degrees in 2010.

Both knew they wanted to practice criminal defense law, and at about the beginning of their third year, Castleberry asked Elison if she would be interested in starting a firm together.

“I was hesitant,” she concedes, having her sights set on working in a public defenders office. However, law students had observed what happened with the previous graduating class, and “people were talking about that it was going to be tough to get a job,” Elison says. “It was on everyone’s mind.”

Before graduation, they agreed to go for it, and the two immediately began to learn as much as they could about how to approach starting their own business. They networked, met and talked with as many lawyers as they could, and printed model documents from the PLF website. Their decision to office-share with other attorneys turned out to be exactly right, she says: Among other advantages, they could ask questions and learn from others.

When Elison earned a certificate in criminal law and procedure and graduated cum laude, she was relieved not to have to send out job applications like so many of her fellow classmates.

“We just passed our four-year mark” with their firm, Castleberry & Elison, she says proudly. “It’s gone well; we’re still in business,” in a specialty where people move in and out of various jobs and practice arrangements with frequency, she notes. Having a law partner has been beneficial in so many ways, Elison adds. One can cover for the other in court, and sometimes they team up on cases.

As for cash flow, “Some months are great, some months are not so great,” she admits. But the pair learned over time how to estimate how much time cases will require so that they can charge accordingly and appropriately.

Elison funded her legal education primarily through a scholarship, so she is not burdened with gigantic debt like so many of her cohorts. “I would do it again,” she says of law school. “I like my job.” She regrets that law school offered no classes during her time there about how to start and run a practice; but she notes that the schools have since added those, in response to the Great Recession era in which she graduated. Now, she says, she has been a speaker in some of those classes, and she fields lots of questions from other attorneys who are starting out.

But when people say to her that they want to go to law school, “I tell them to think really hard,” Elison says. “It’s not 1995 anymore,” and there are no guaranteed jobs. A lot of folks have “romantic ideas” of what law practice is, “like what you see in the movies. It’s not ‘L.A. Law.’ ”

Eric McClendon, along with fellow Willamette University College of Law 2010 graduates Richard McBreen, Aidan Melia and Michael Owens, spent their third year of law school preparing to open their own firm.

Partly they were prompted by the economy and what they saw happen to 2009 grads, and partly they were inspired by an attorney McClendon clerked for, Lance Youd, who taught a class at Willamette called “How to Start a Law Firm.” Youd’s message rang clear: Starting your own firm shouldn’t be a backup plan, it should be their main strategy. “If you can give it your all, in three to five years you will be happier and making more money than attorneys who are working for other people instead of themselves.”

McClendon took that preaching to heart. He and his three friends agreed to set a specific deadline for themselves: “If we don’t have jobs lined up by this date, we’re starting a firm on our own.” In the meantime, they met with accountants, lawyers and judges, and began searching for office space. “Big firms were shedding jobs, district attorneys’ offices were not hiring,” he says. “We noted that a lot of people who graduated had not planned to start their own business; but for many people, that was the only option.”

The four spent about a year gathering resources and looking for mentors. As McClendon puts it, they sought people they could call and say: “I’m in over my head. What should I do?” He found good mentors through the Multnomah Bar Association, especially Mark Cogan and Ruth Pekelder. McClendon and his future law partners had taken a class under then-Chief Justice Paul J. De Muniz, who “offered us encouragement and advice, and even personally swore us in at the Oregon Supreme Court.”

Before passing the bar, the partners wrote a business plan, but getting someone to lease an office to them was difficult, because “nonlawyers can’t have a law firm” under their names, McClendon says. A retired lawyer saw and understood their plight and rented them office space in a former house in Southeast Portland near the Ross Island Bridge, and they formed an LLP in business that same day. On the day they passed the bar, they opened their office doors and, McClendon testifies, the phones started ringing. Just three weeks after he was sworn in, he was in court handling a trial.

“At the time, it was a bit unheard of” for a group of attorneys to open a new firm, he says. But he says the firm, which they called McClendon Owens Melia McBreen, “hit the ground running. If you do your research and have good mentors, you can pull it off; people are referring to you. We actually started a law firm that was making money.”

“We were taking anything that walked into the door at first,” he says. But over time, each gravitated to a specialty: McClendon focused on family law, McBreen on criminal cases, Melia on family and administrative law, and Owens on employment law. McClendon points out that a balance of services is important, because a new firm needs some cases that pay up front. The partners’ working relationship went smoothly, he says. “We never had to vote. We never did have any problems or disputes.”

McClendon participated in a group of sole and small-firm practitioners started by lawyers Troy Pickard and Caryn Jones. They began meeting every couple of months, usually for lunch, sharing ideas and networking. The group — which never has had a formal name — grew exponentially and is still going strong, although McClendon no longer attends; in April 2014 he left the firm to become manager of the Oregon State Bar’s Referral and Information Services. (See sidebar.)

McClendon — a California transplant and former Marine whose parents also went into the law — says leaving the firm, now called Owens, Lane & McBreen, was sad, but the opportunity to join the OSB staff was too appealing to pass up. He adds that his own experiences in helping start a practice gave him good perspective to bring to the OSB job.

 

ABOUT THE AUTHOR
Cliff Collins is a Portland-area freelance writer and frequent contributor to the Bulletin. Reach him at tundra95877@mypacks.net.

© 2014 Cliff Collins


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