By Darrell Smith
New MBA graduate Nelson Chiu said it's tough to compete with the laid-off who have the same degree plus years of experience.
SACRAMENTO, Calif. - Nelson Chiu shook hands with the PepsiCo representative, exchanged a few brief words and received a parting "good luck."
He was dressed in a crisp, pinstripe suit on a recent Wednesday, and his voice was starting to fade; he'd been at a career fair at the University of California-Davis since 11 a.m., had talked to more than a dozen companies, and it was nearly 2 p.m. on the afternoon of his daughter's first birthday.
For Chiu, who earned his MBA in 2009 from UC-Davis' Graduate School of Management, a solid lead would have been a great gift.
For years, someone like Chiu with a newly minted degree from a top-flight business or law school had the closest thing to a golden ticket for a high-paying job. But the recession has brought graduates - many of them staggering under mountains of student-loan debt - face to face with a new economic reality.
For most of the past decade, markets for both groups of grads were humming: 10 percent to 20percent growth per year for MBA graduates, according to the nonprofit Graduate Management Admission Council; a 10-year stretch of near-90 percent job placement for law grads, the National Association for Law Placement reported.
But those days seem like ancient history.
"The biggest challenge is the people who've been laid off with the same degree and with a lot more experience," said Chiu, 31. "There are too many applicants and not enough career opportunities right now."
Companies that hired, on average, 12 MBAs in 2008 hired fewer than six in 2009, the Graduate Management Admission Council reported.
Nearly 80 percent of employers scaled back on-campus recruiting of MBAs in fall 2009, and nearly half reported a decline in full-time MBA job postings, according to the MBA Career Services Council, which tracks MBA hiring.
James Leipold, executive director of the National Association for Law Placement, had two words to describe the market for law school grads: "It tanked," he said. "The pipeline is clogged up."
A student-recruiting survey released this month by the association was not encouraging.
Second-year law students received far fewer offers of summer internships - the traditional gateway to a firm - in 2009 than in 2008. Law firms cut back sharply on recruiting. Grads who received offers were often told the job wouldn't start for months.
"For the class of 2009, the largest impact was the deferral phenomenon," Leipold said. Some grads still await their start dates.
Much like their business clients, law firms are fretting about overhead as they mind the bottom line.
"There's a fear of overhiring and, with the downturn, law firms aren't investing until they need people," said Jeff Koewler, managing partner at Downey Brand, Sacramento's largest law firm.
Downey Brand continues to extend job offers to its summer associates - second-year students accepted into the firm's internship program - including all 11 from 2008, who started in fall 2009.
But in 2009, just eight were offered positions to start in fall 2010. This year, seven or eight will enter the summer program with a chance for a job with the firm in fall 2011.
For anxious and jobless graduates saddled with debt, the timing couldn't be worse.
Law-school students borrow an average of more than $80,000 for a private school and more than $54,000 for a public school, according to the National Association for Law Placement.
Despite the tough market, law and business schools are seeing more, not less, interest.
Two-thirds of MBA programs said they received more admission applications in 2009 than in 2008, according to the Graduate Management Admission Council, which administers the Graduate Management Admission Test.
