Law firms had been making steady, if slow, progress in diversifying their ranks.  Recent data collected by Vault and the Minority Corporate Counsel Association (MCCA), however, suggests that some of the profession’s advances have come to a virtual standstill.

This spring, as part of the annual Law Firm Diversity Survey, more than 260 law firms, including many of the largest and most prestigious law firms in the country, completed a detailed questionnaire on their diversity initiatives, programs and demographics. The results have been released in the Law Firm Diversity Database.

The data reveals how the economic crisis has affected law firm hiring, promotion and retention as a whole, and particularly highlights its impact on attorneys of color. While everyone felt the recession, the survey data suggests that minorities were, as many have feared, disproportionately affected.

Among the survey’s major findings:

Law firm hiring declined across the board

While it’s clear that law firm jobs are far scarcer now than they were two or three years ago, the data shows just how dramatic the change has been. For example, the size of the 2L summer associate class dropped by some 20 percent since 2008. In addition, far fewer of those summer associates were offered permanent positions than in the past: whereas nearly 93 percent of 2Ls were offered jobs in 2007 and 87.83 percent received offers in 2008, just 72.85 percent of 2Ls received permanent offers in 2009. Law firms also cut back drastically on the recruitment of experienced attorneys, with lateral hiring falling by more than 40 percent from 2008 levels.

Minority recruitment fell

Law firms have been primarily relying on increased minority recruitment to diversify their populations. What’s particularly troubling about the latest survey data is that not only did the overall number of attorneys hired drop in 2009, but also the percentage of those attorneys representing racial/ethnic minorities fell.

In fact, recruitment of minority lawyers declined at all levels — from law students to lateral attorneys. Of all lawyers hired in 2009 (including starting associates as well as laterals), less than 20 percent (19.09 percent) were minorities; a considerable drop from 2008 (21.77 percent) and 2007 (21.46 percent). And the 2009 2L summer class had the lowest percentage of minority students of the last three years: 25.19 percent (compared to 25.66 percent in 2008 and 25.91 percent in 2007).

Looking at specific racial groups, the most notable decline in hiring was among African-American students. In 2007, 7.32 percent of 2L summer associates were African-American; in 2009, that percentage fell to 6.42 percent. The percentage of Asian American 2Ls also declined, from 12.83 percent in 2007 to 11.74 percent in 2009. Meanwhile, the number of Hispanic students and multiracial students (those who identify with two or more races) inched upward a few tenths of a percent.

Minority lawyers continue to leave in high numbers

Meanwhile, as the number of minority lawyers entering firms has decreased, the number of minority lawyers leaving firms has increased. This is especially striking with respect to minority women. At every level of associate, the percentage of minority women who left their firms (voluntarily or through layoffs) has increased by at least two percentage points since 2007. For example, of third-year associates who left in 2009, 16.64 percent were minority women (compared to 13.98 percent in 2008 and 14.36 percent in 2007). In 2007, 12.83 percent of fourth-year associates who left their firms were minority women; by 2009, that number had climbed to 15.46 percent.

Overall, minority men and women represent 20.79 percent of attorneys who left their firms in 2009 — even though they represent just 13.44 percent of the overall attorney population at these same firms. Moreover, for the first time in three years, the percentage of minority attorneys hired was lower than the percentage of minority attorneys who left. In other words, firms are losing their minority attorneys faster than they can replace them.

Retention becomes more critical as recruitment drops

Given the likelihood that law firm recruiting will not return to pre-recession levels any time soon, there’s a danger that even a one-time drop in minority recruitment could have a long-term impact on overall law firm populations. In order to fend off this risk, firms will need to put greater effort into retention and professional development. Retention has long been a problem among large law firms, but the new economic reality makes progress in this area critical. More effective mentoring and mentoring, better monitoring of attorneys’ progress, overcoming unconscious biases, and ensuring that all have equal access to significant opportunities will help law firms build, and maintain, a talented and diverse workforce.