SOUTHERN CALIFORNIA Job Market : PART ONE: JOB PROSPECTS : High-Paying Professions : The strong Southland economy has raised the demand for top talent
For professionals, Southern California is blessed. Its decades-long business boom, its growing status as a Pacific Rim financial center and its affluent population have made it fertile soil over the years for lawyers and accountants, doctors and dentists.
And 1987, the experts say, is a particularly good one hereabouts for the top prospects in these and other high-priced fields.
“As the money flows this way, the service professions, whether lawyers or architects, are going to find themselves in demand,” said Ronald E. Gerevas, Los Angeles managing partner for Heidrick & Struggles, a recruitment firm.
But as with much in the economy, the emphasis in the professions is on quality. For the most talented professionals, things seem better than ever, not surprising given that in hardly any other endeavor does knowledge equate so directly with power.
For the mediocre, however, especially for those fresh out of middling professional schools, it will often be a matter of finding acceptable employment rather than picking and choosing between dream jobs.
Demand this year is strongest in financial services, at prestige law firms and for certain kinds of engineers.
Professionals looking for jobs with big companies may have the hardest time of all. Northwestern University’s 41-year-old Endicott-Lindquist Report, which studies the job market mostly by polling big concerns, said 56% of its respondents “intentionally reduced their professional or exempt staffs during the last year.”
The study also found that most professionals already working for such companies can expect pay increases of 4% to 6% this year, the same as last year.
One anomaly for professionals in Southern California is their great reluctance to leave the region, even in law, where salaries are far below New York standards. At UCLA, for example, three-quarters of law graduates remain in Southern California, and not for want of offers elsewhere.
The syndrome is so well known that some prospective employers from elsewhere don’t bother to recruit here anymore.
Over the long term, the outlook for professionals everywhere is bright. Neal H. Rosenthal, chief of the occupational outlook division at the U.S. Labor Department, projects that by 1995 the number of jobs for attorneys will be up 36%. So will jobs for engineers. Accounting jobs will be up 35%; architects, 27%; dentists, 25%, and physicians, 23%.
For the shorter term, here’s a rundown on the outlook for some of the leading professions this spring.
LAW
The competition for top legal talent is practically frenzied--”dramatic,” in the words of Gregg Ziskind of Ziskind, Greene & Associates, a recruiter.
The problem, experts say, is that the nation’s top law schools are producing roughly the same number of graduates year after year, while demand for the services of lawyers with big-league credentials has skyrocketed.
America is more litigious now, but other things have changed, too. No longer is such a stigma attached to jumping from one job to another, going to work in investment banking or even joining a corporation. Corporate mergers, huge courtroom liability cases and skyrocketing legal fees have also changed the attorney’s landscape.
Meanwhile, Los Angeles has exploded as a financial and legal center, and is likely to continue doing so now that the Far East has become so important to the world’s economy.
“I’m doing more work in the legal arena than we’ve ever done in L.A. in 26 years,” Gerevas said. “It’s all based around the fact that Los Angeles is becoming the financial center of the Pacific Rim.”
As a result, firms from New York, Washington, Chicago and elsewhere have opened offices in Los Angeles, and because they all tend to practice high-priced corporate law, they all need blue-chip lawyers of the kind that big corporations demand for their legal work.
So a 1982 graduate of a law school like Stanford can make $90,000 to $105,000 with a big firm, said Denise DeMann, a co-owner of Bench Ltd., a legal recruitment firm. She said smaller firms are paying $59,000 to $65,000 for lawyers with that level of experience. But she added that big-money lawyers must work more hours these days, and even top associates several years out of school are suffering salary compression: Starting pay has risen so fast that new graduates make almost as much as those ahead of them.
Leading firms here are expected to start top graduates at about $52,000 a year, up as much as $10,000 from last year, thanks to skyrocketing salaries at big New York firms, which will continue to set the pace at about $65,000 this year. Said Stephen Yandel, associate dean of the Yale Law School: “The big firms in major metropolitan areas are just ravenous for graduates.”
For older lawyers, how much they can make by jumping ship depends on how much business they can bring with them and how much help they need to handle it. Their legal specialty also matters. DeMann said many firms now use a 1-3 formula, paying, say, $100,000 to an attorney with $300,000 in annual transportable billings.
The shortage of attorneys with blue-chip credentials, however, comes at a time when there is an overall glut of lawyers. As a result, times are tough for attorneys from lesser schools, with lesser grades and lesser experience.
“Not all of them will find jobs,” said Robert I. Weil, a principal in Altman & Weil, a Radnor, Pa., consulting firm specializing in the legal profession. He said lesser graduates might have starting salaries as low as $19,000, even in cities like Los Angeles, adding that “some could do better as somebody else’s secretary.”
Lesser graduates tend to remain on a slower track throughout their careers. There is an oversupply of lawyers in most fields, and except for personal-injury lawyers, those without standout credentials or special ability will not make much money in the current climate, Weil said.
ENGINEERING
Engineering in general is rebounding from a couple of tough years. The space shuttle disaster, the Gramm-Rudman deficit reduction bill and generally reduced spending on public works such as sewer systems have not been kind to the field.
Overall, engineers’ prospects are mixed. Demand has recovered at some aerospace firms in Southern California, and the renascent computer industry is also beginning to hire again.
At Lockheed-California, for example, “the open requisition list in Burbank says we want 250 engineers of all different kinds,” said Andrew Marko, president of the Engineers and Scientists Guild, a union representing such workers at Lockheed. He said another 150 engineers are wanted at the Lockheed operation in Ontario.
“I’ve seen (the job demand at) times at zero,” he said.
Julian Schor, president of Wingate Dunross Inc., an engineering search firm, said engineers in Southern California have much to look forward to: the Strategic Defense Initiative, or “Star Wars,” program; the rebound of NASA; the long-term prominence of the computer industry, and new weapons such as the Stealth bomber and the Advanced Tactical Fighter.
Demand for oil industry and mechanical engineers, however, is still soft, recruiters and employers say.
Schor said that the market for civil engineers will remain solid as long as interest rates remain low and that chemical engineers are also in demand. He said both are generally more stable than other branches of engineering.
According to the 1987 Northwestern report, demand for new engineers is down 9% this year, and demand for bachelor’s degree engineers is down for just the fourth time in the past 21 years. But chemical engineers with bachelor’s degrees have seen job offers increase 17% over 1986.
The report also said that, at $28,932, engineers overall still earn the highest starting salary among graduates with bachelor’s degrees. For those with a master’s, the average is $33,096.
ACCOUNTING
Mergers, acquisitions and recessions are usually bad news for accountants, but the recession is long gone, and the healthy Southern California economy seems to outweigh the staff cutbacks that result when companies combine.
“The market is strong,” said Paul E. Gilbert, a vice president at the recruiting firm of Robert Half of Southern California, which specializes in accountants. He said many companies had higher sales in the past year and so want to beef up their accounting departments.
The strongest demand is for certified public accountants with several years of experience at Big Eight accounting firms. In fact, one big problem is persuading some CPAs that there is indeed life outside the Big Eight. Said Gilbert: “A guy who may not make partner at Price Waterhouse may be a real superstar in a small firm in West L.A.”
Barbara A. Snow, associate director at Source Financial, another recruiter, said a young CPA with two years of experience might make $28,000, including overtime, at a Big Eight firm but can get $35,000 elsewhere.
By contrast, she said, a Big Eight associate with seven years of experience might make $50,000 to $60,000, including bonus, and could not get much of an immediate raise by leaving. Higher pay would come with career advancement.
Similarly, she said, a Big Eight partner probably could not make more money doing anything else, unless he or she has great expertise in an area of great value to a specific company.
Even CPAs from medium-size firms are in demand, although not as much as their Big Eight counterparts.
FINANCIAL SERVICES
This is one of the strongest segments of the current job market for professionals, even though the field has been buffeted lately by powerful crosscurrents.
On the one hand, the stock market has hovered near record highs, and investor options are multiplying in an era of deregulation and the “securitizing” of debt. On the other hand, the financial community has been rocked by insider trading and money-laundering scandals. And the wave of hostile takeovers that has swept corporate America has aroused widespread enmity toward investment bankers, the elite of the financial services area.
But merger mania and other changes sweeping the financial world have made it a great time to have financial skills.
The really big money is being made in mergers and acquisitions. As Northwestern placement director Victor Lindquist said, “Right now, the magic word is investment banking.”
Investment bankers with more than three years in the business can usually make $100,000 to $150,000. Those further up in the hierarchy can make many times that.
What’s more, demand is growing.
“The major money center banks and even the first-tier regionals have developed full investment banking or merchant banking departments,” said Thomas P. Bartle, president of Wesley, Brown & Bartle, a search firm.
But the demand is not limited to investment banking. Successful stockbrokers with a lucrative client base are as good as gold.
“I would say the market is as attractive for quality people as it’s ever been,” said Steven Friedman, president of Securities Resources Management, a recruitment firm.
Friedman said the current bull market has made securities firms willing to pay bonuses exceeding $1 million for coveted brokers who are willing to sign a long-term contract and who bring substantial business with them.
There is also demand for attorneys with corporate finance experience and quantitative skills, for money managers and portfolio managers.
At banks, however, employment prospects are mixed because of consolidation in the industry.
“At the senior level of $100,000 plus, there is still a fairly active market, despite the fact that mergers and acquisitions are going on,” Gerevas said.
He added that middle management, however, “is being jammed up.”
HEALTH CARE
Being a doctor today involves an enormous paradox. The medical profession can do more for patients than ever before, and yet today it may well be harder than ever to be a doctor. While established physicians don’t move around much, there are signs of increasing disaffection in their ranks in response to lawsuits, paper work and an increasingly adversarial relationship with patients.
Also, a greater supply of doctors is keeping medical incomes down.
“All told, the overall number of doctors per capita in the United States has increased 40% in the last 20 years,” said Monica Noether, a Federal Trade Commission economist, in a study for the National Center for Policy Analysis.
The study also found that doctors’ incomes, adjusted for inflation and taxes, have fallen about 25% since 1972.
Young doctors face particularly tough times. They are beset by stringent cost-containment pressures, heavy college debts, wary patients and an oversupply of physicians in major metropolitan areas. And, like all doctors, they suffer soaring malpractice premiums.
Don L. Berg, editor of Medical Economics, said that new doctors face stiffer competition this year than last and that things will continue deteriorating for years to come. He said dramatic changes in health care mean more doctors will join group practices or health maintenance organizations, where they will work for a salary. In the past, the vast majority of physicians were self-employed.
And increasingly, doctors will have to fight for jobs. Although the number of medical school applicants has dropped 27% in the past 12 years, the government estimates that by 1995 there will be about 650,000 doctors in the United States, 45,000 more than needed.
After residency, opportunities are extremely tight in places like Los Angeles, and even small towns and rural areas increasingly have enough doctors.
Things are better for dentists, but not much. Dental demand has been hurt by the dramatic success of fluoridated water in preventing cavities, while the number of dentists was boosted by federal education spending in the 1970s to counteract a shortage.
“In the last 10 years, we had a 24% increase in the number of dentists in California,” said Dexter Varnum, a spokesman for the California Dental Assn.
He said that there is a glut in affluent areas of Los Angeles County but that opportunities persist in rural areas and that there should be a mild shortage of dentists nationwide in the 1990s.
In other health-care professions--namely, nursing--there are dramatic shortages in California and nationwide. In fact, a December, 1986, poll by the American Hospital Assn. found that 83% of U.S. hospitals had openings for registered nurses. And among the institutions with openings, 13.6% of the registered nurse positions were unfilled, up from 6.3% a year earlier.
There also is a shortage among licensed vocational nurses (known as practical nurses outside of California). That means opportunity both for existing nurses and for those planning to enter the field.
