What happens when a law firm's incoming associate does not pass the bar exam?

The State Bar of California recently reported that only 31.4% of would-be attorneys passed California's February 2019 bar exam—the second-lowest pass rate California has seen in more than 30 years.

More than 4,600 people took the February test, and roughly 1,500 test-takers passed the exam, which means over 3,100 won't be able to practice law until at least July, when the next exam is administered. But many of them have already committed to jobs at law firms.

“Law firms have established policies about what do to when their associates don't pass the bar; most law firms will give associates two chances to pass the bar,” said Kate Reder Sheikh, an associate recruiter at Major, Lindsey & Africa. “Just because they didn't pass the first time, [it] does not mean that they are going to be out of a job. That is a positive thing.”

According to Reder Sheikh, Big Law associates who do not pass the bar exam on their first try are unlikely to be impacted immediately, as most of them are practicing under the supervision of senior attorneys. But if the associate does not pass the exam on their second attempt, they will likely be terminated, she said.

“At that point, depending on how you have done at the firm in general, and what kind relationship you have there, the firm may give you an offer to return once you pass the test,” Reder Sheikh added.

Many of those who failed the February exam will retake it in July. But for some associates, the February test may have already been the second time they fail the bar exam. According to the State Bar of California, three-quarters of the applicants who took the test in February had already taken the bar exam once. The pass rate for repeat applicants was only 28%.

The passage rate on the July 2018 bar exam was 40%, with 54% of first-time takers passing, a historic low for the July test, according to the State Bar of California.

Carla Khalife, a legal recruiter at Swan Legal Search, said she has noticed an increase in associate candidates who have not passed the bar exam, particularly in intellectual property and corporate practices.

“The firm eventually requires you to have passed the California bar. I am seeing that the firm will give them one try or two tries, then you are out,” she said.

Of course, new law school graduates aren't the only people looking to pass the bar exam in California.

“It doesn't just impact this year's first-year associate class, but people who maybe want to relocate from New York, or Washington, D.C., or Chicago to California,” she said.

Having passed the California exam is a “hard requirement” in order to practice in the market, according to Khalife. However, that does not means the legal talent pool in California is shrinking—firms are still growing their practices and more attorneys moving into the market.

Still, those firms looking to grow might start steering clear of lateral candidates who are not yet admitted to the California bar.

“The bar exam low pass rate may start to make firms [have] a little bit more trepidation about hiring people from out of California,” said Reder Sheikh, cautioning lawyers wanting to enter the California market. “Firms may want to require the bar before they'll consider the application.”

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Nearly 7 in 10 Flunked California's February 2019 Bar Exam