NALP Bulletin, March 2013

After two years of year-over-year double-digit increases, the pace of lateral hiring was tempered in most markets in 2012, finishing out the year about 6% lower nationally than in 2011. In the previous two cycles (2009-2010 and 2010-2011), aggregate lateral hiring was up dramatically by 38% and 48%, respectively. The exception to the rule was New York City, a market that continued to see double digit growth in lateral hiring, driven by high partner hiring volume in particular. Those were the key lateral hiring findings from NALP's 2012 “Survey of Legal Employers on Fall Recruiting,” which requested information on lateral hiring in 2011 and 2012.

The results shown in Table 1 and Table 2 are based on reports from 327 law offices that reported at least one lateral hire in one of the two years. Table 1 reports aggregate information not only for partners and associates but also for two additional categories of lateral hires: lawyers who may generally be eligible for partnership (typically counsel or of/counsel or senior attorneys) and lawyers who are generally not eligible for partnership (typically staff or contract attorneys.) Table 2 reports on lateral partner and associate hiring, which accounted for 80% of the lateral hiring reported, and includes cities with at least five offices reporting office-specific information and collectively reporting at least 25 lateral hires in 2012.

• Overall, based on aggregate hiring of over 3,300 lateral lawyers in 2012, the volume of hiring was off by just over 6% compared with 2011, with a median of 6 and an average of just over 10 lateral hires (Table 1). Much of the decrease was driven by a decline in lateral associate hiring, which accounted for almost 60% of lateral hiring in 2012, though the percentage decrease was largest for lateral partner hiring. The newly tracked categories of counsel/of counsel and staff attorney accounted for just 20% of lateral hiring in 2012, and as the median figures suggest, the majority of offices did not do any hiring of this type in 2012.

• As Table 2 shows, however, changes in aggregate hiring and the level of hiring, measured by either the median or average number of hires, varied considerably by firm size and geography. For example, for firms reporting their lateral hiring on a firm-wide basis (in the section of the table labeled “Firm-wide Reports”) lateral hiring as measured by medians was strongest in the Mid-Atlantic Region, at 16.5, but the aggregate increase in volume was greatest in the West/Rocky Mountain Region. (Regional figures in this section of the table reflect firms reporting firm-wide information but whose offices are wholly or predominantly in one region.)

• Among offices reporting activity for a single office, offices averaged 1 or 2 lateral partner hires and 2-6 lateral associate hires, depending on firm size.

• On a regional basis, the level of lateral hiring per office was highest in the Northeast, with a median of 9 and an average of 13 lateral hires in 2012, and lowest in the Southeast and West/Rocky Mountain Regions, where the median number was 3 and the averages were 3.6 and 4.6, respectively. In terms of aggregate volumes, moreover, the Northeast was the only region that saw an increase, reflecting in large part a double-digit increase in New York City, mostly at the partner level. The San Jose area was the only other area posting aggregate increases for both partners and associates, and is in contrast to neighboring San Francisco. The largest aggregate decrease, over 31%, came in the Southeast. In Atlanta specifically, hiring was off by about 9%, but in Dallas it was off by half.

• Despite the overall decrease, of course not every office or firm hired fewer laterals in 2012 compared with 2011. In fact 40% of offices hired more laterals in 2012 than in 2011, and almost 10% hired the same number overall. The last column in the table shows that half of offices met or exceeded the average 6% decline. Offices in Washington, DC (and the Mid-Atlantic Region as a whole), Miami, and San Francisco were most likely to have done so, while offices in Houston, New York (and the Northeast in general), and Chicago were least likely to have decreased hiring by this amount or more.

This year’s survey results document a much more stable level of hiring compared with the prior year, after two previous cycles of large increases. Survey results of course, reflect the respondent pool. Nonetheless, to the extent that the survey pool is relatively consistent with respect to firm size and location, this survey shows the largest slowdown in growth in volume since 2007-2008, and that the level of activity, measured as averages, remains below what was recorded in 2005, 2006, and 2007. See Table 3. (For full results of prior year surveys, see NALP Bulletin columns posted at www.nalp.org/entry-levelhiring.)

Table 1. Summary of Lateral Hiring — 2012

* Attorneys who may generally be eligible for partnership.
** Attorneys who are not eligible for partnership.
Source: NALP “2012 Survey of Legal Employers on Fall Recruiting.”

Table 2. Lateral Hiring in 2012 and Comparison with 2011

Source: NALP “2012 Survey of Legal Employers on Fall Recruiting.” This table includes offices/firms that reported at least one lateral hire in 2011 or 2012 and that also reported complete information for both years. Collectively these 327 employers reported 3,352 lateral hires in 2012. Following the overall total shown in the first line, the table separates out surveys that reported information firm-wide, or for multiple offices, from those that reported office-specific information. Firm-wide information by region includes firms whose offices are predominantly or wholly in that region. However, office-specific information includes a few instances of firms with one small office in an adjacent suburban location or satellite location, and of multi-office nationwide firms consolidating two geographically adjacent offices onto one survey.

Table 3. Summary of NALP Survey Findings on Lateral Hiring — 2002-2012

Source: NALP “2012 Survey of Legal Employers on Fall Recruiting.”