They dangle the possibility of partnership with all it's attendant wealth and status in front of the bright young things and watch them scrap it out and burn out.
It used to be that about 5% didn't make partner. It was like getting fired-- in the 1970s, when that itself was rare. It was harder to get an associate position, but once you were in, you were solid. Also, work hours were not at the extreme that they are now.
Now, instead of 5% not making partner, it's about 5% who make partner.
That's because some really evil, greedy fucks got in charge and realized they could replace partnerships with overworked, churn-and-burn associates.
You're right that the number who make partner has shrunk massively (and the competitiveness goes further in that being a partner is no longer as secure as it was - several of the large firms have ousted partners which would previously have been almost unheard of).
The upside (at least for those competing) is that many who don't make partner will still go on to secure corporate lawyer jobs earning six figures...
It used to be that about 5% didn't make partner. It was like getting fired-- in the 1970s, when that itself was rare. It was harder to get an associate position, but once you were in, you were solid. Also, work hours were not at the extreme that they are now.
Now, instead of 5% not making partner, it's about 5% who make partner.
That's because some really evil, greedy fucks got in charge and realized they could replace partnerships with overworked, churn-and-burn associates.