Lateral Hiring Down in 2016

NALP Bulletin, March 2017

Lateral hiring volume suffered a dramatic decrease during the recession in 2008 and 2009, and then a big rebound as the legal economy recovered in 2010 and 2011. Since then there have been small year-to-year increases and decreases. In 2016, aggregate lateral hiring was down for the first time since 2013, finishing out 2016 almost 11% lower than in 2015. This follows an aggregate increase of 8.5% from 2014 to 2015. Lateral hiring averaged about 15 lateral hires per office/firm, but volumes varied greatly by firm and geography, with the highest volumes recorded, perhaps not surprisingly, in New York City, where the average was 18. These are the overall findings about lateral hiring from NALP's "Survey of Legal Employers on 2016 Recruiting," which requested information on lateral hiring in 2015 and 2016.

The results shown in Table 1 and Table 2 are based on reports from 431 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, 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 79% of the lateral hiring reported for 2016, and includes cities with at least five offices reporting office-specific information and collectively reporting at least 20 lateral hires in 2016.

  • Overall, based on aggregate hiring of over 6,500 lateral lawyers in 2016, the volume of hiring was off by 10.8% compared with 2015 in these same offices/firms, with a median of 6 and an average of 15.1 lateral hires per office/firm (Table 1). Although both partner and associate lateral hiring were off by over 11%, the volume of associate lateral hiring was far greater, averaging 9 per office/firm, compared with an average of 2.9 per office/firm for lateral partner hiring. Lateral associate hiring accounted for 60% of lateral hiring in 2016. The categories of "counsel/of counsel" and "staff attorney" accounted for about 21% of lateral hiring in 2016, and, as the median figures suggest, the majority of offices did not do any hiring of this type in 2016. Aggregate hiring of lateral counsel/of counsel decreased by over 12%, while hiring of staff attorneys was off by just 2.5%.

  • 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 ranged from 11-16 depending on region, and changes in aggregate volume ranged from a decrease of about one-third to an increase of about 5%. (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 between just 0.8 and 1.6 lateral partner hires depending on firm size, whereas associate lateral hiring averages ranged from 2.5 to 6.7 per office.

  • On a regional basis, the level of lateral hiring per office was highest in the Northeast, with a median of 10 and an average of over 15 lateral hires in 2016, compared with medians of 3 to 6 in all other regions and averages that ranged from 4 to 9. In terms of changes in aggregate volumes, however, it was down the most in the West/Rocky Mountain region, whereas in the Northeast overall volume was down by less than 3%, in large part because New York was one of the few larger cities where aggregate lateral hiring increased, though just barely. The median number of lateral hires was also highest by far in New York, at 12, followed by Chicago at 8, and 6 in Boston, Washington, DC, Atlanta, and the Miami area.

  • Among cities reporting at least 75 lateral hires in 2016 (New York, Washington DC, Houston, Chicago, and the Los Angeles area), Houston also registered an aggregate increase, both overall and for partners and associates. Chicago recorded a flat figure overall, but increases for partners and associates.

  • Despite the overall decrease, of course, not every office or firm hired fewer laterals in 2016 compared with 2015. In fact about one-third of offices hired more laterals in 2016 than in 2015, and about 11% hired a number within 2% of their 2015 number. The last column in Table 2 shows that offices were about evenly split between those with a decrease greater than the overall average, and those with a smaller decrease or an increase. Among cities with at least 10 offices reporting, the split was relatively even as well, though it was to a lesser extent in Chicago, the Los Angeles area, and especially the Miami area.

  • This year's survey results document a decrease in the level of hiring following two years of increase from 2013 to 2014 and again from 2014 to 2015. Survey results, of course, reflect the respondent pool for each year, and it should be noted that, while last year's survey measured a 14.8 average number of lateral hires for 2015, for the 431 offices/firms providing lateral hiring figures on the 2016 survey for both 2015 and 2016, the average was almost 17 in 2015, higher than that based on the 2015 survey. Nonetheless, to the extent that the survey pool is relatively consistent with respect to firm size and location, it appears that the average remains well above the level of 2009. 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 — 2016

ALL LATERAL HIRING IN 2016 PARTNERS ASSOCIATES
Median
#
Average # Total # Reported % Change from 2015 Median
#
Average # Total # Reported % Change from 2015 Median
#
Average # Total # Reported % Change from 2015
6 15.1 6.529 -10.8% 1 2.9 1,248 -12.2% 4 9 3,890 -11.4%
COUNSEL/OF COUNSEL/
SENIOR ATTORNEYS*
STAFF ATTORNEYS**  
Median
#
Average # Total # Reported % Change from 2015 Median
#
Average # Total # Reported % Change from 2015
0 1.6 688 -12.4% 0 1.6 703 -2.5%

* Attorneys who may generally be eligible for partnership.
** Attorneys who are not eligible for partnership.

 

Table 2. Lateral Hiring in 2016 and Comparison with 2015

  # of Offices Reporting PARTNERS ASSOCIATES TOTAL % of Offices with Decrease of 11% or More
Median # Hired in 2016 Average # Hired in 2016 % Change in # Hired 2015-
2016
Median # Hired in 2016 Average # Hired in 2016 % Change in # Hired 2015-
2016
Median # Hired in 2016 Average # Hired in 2016 % Change in # Hired 2015-
2016
Overall Total 431 1.0 2.9 -12.2% 4.0 9.0 -11.4% 6.0 15.1 -10.8% 52.0%
FIRM-WIDE REPORTS
All firm-wide reports 106 5.0 7.8 -11.1 15.0 21.7 -15.0 28.5 38.3 -12.8 55.7
BY # OF LAWYERS FIRM-WIDE
    250 or fewer 35 2.0 2.9 -20.9 5.0 6.2 -23.8 10.0 12.1 -23.3 54.3
    251-500 25 4.0 4.8 -25.8 14.0 14.4 -20.5 23.0 24.8 -23.4 64.0
    501-700 17 11.0 12.9 -5.2 23.0 26.4 -10.4 48.0 53.3 -6.8 52.9
    701+ 29 9.0 13.3 -5.6 39.0 44.0 -13.1 65.0 72.9 -9.1 51.7
BY NALP REGION
    Northeast 15 2.0 2.9 2.4 5.0 14.9 -6.7 11.0 22.6 -9.1 46.7
    Mid-Atlantic 11 4.0 6.0 -10.8 8.0 13.3 -28.4 16.0 25.0 -17.4 54.6
    Southeast 6 2.5 3.0 5.9 5.5 8.0 2.1 11.5 14.7 4.8 50.0
    Midwest 17 4.0 6.2 -18.0 7.0 8.9 -12.6 14.0 20.6 -19.2 58.8
    West/Rocky Mountain 13 2.0 2.2 -50.9 7.0 11.5 -27.3 12.0 18.4 -32.5 69.2
OFFICE-SPECIFIC REPORTS
All office-specific reports 324 0.0 1.3 -14.6 2.0 4.9 -5.7 5.0 7.6 -7.3 50.9
By # of lawyers firm-wide
    250 or fewer 81 0.0 0.8 -22.0 2.0 2.5 -16.3 3.0 4.5 -13.5 46.9
    251-500 65 0.0 0.9 -45.1 2.0 3.9 -14.7 3.0 5.7 -22.1 60.0
    501-700 27 1.0 1.6 20.0 3.0 4.2 -7.4 6.0 7.4 -8.2 51.9
    701+ 151 1.0 1.7 -5.3 3.0 6.7 -0.2 6.0 10.1 -0.9 49.0
By NALP region and city/state
Northeast 47 1.0 2.3 -4.5 7.0 11.2 1.0 10.0 15.4 -2.6 51.1
    Boston 11 1.0 1.4 -25.0 4.0 4.6 -21.5 6.0 6.8 -22.7 54.5
    New York City 36 1.5 2.5 0.0 8.5 13.2 4.2 12.0 18.0 0.5 50.0
Mid-Atlantic 64 0.0 1.6 -13.2 2.0 5.4 -5.4 4.0 9.1 -5.4 48.4
    Washington, DC/
    Northern VA
40 1.0 2.2 -5.5 3.0 6.7 -10.1 6.0 11.3 -5.8 47.5
Southeast 74 0.0 0.9 -23.2 1.0 3.0 -5.6 3.0 5.0 -6.4 51.4
    Atlanta 7 0.0 1.1 -46.7 5.0 7.6 -1.9 6.0 10.0 -13.6 71.4
    Austin 6 0.5 1.0 50.0 1.5 2.5 150.0 2.5 3.7 120.0 16.7
    Dallas 14 0.5 0.9 -45.5 1.0 2.3 -17.9 3.0 4.1 -19.4 50.0
    Houston 14 1.0 1.2 6.3 2.0 4.4 51.2 3.0 5.9 33.9 50.0
    Miami/Ft. Lauderdale/
    W. Palm Beach
10 0.0 1.6 14.3 3.0 3.6 20.0 6.5 7.3 23.7 30.0
Midwest 49 1.0 1.3 -16.5 3.0 5.2 -1.2 6.0 8.4 -6.4 49.0
    Chicago 21 1.0 2.0 2.4 7.0 8.5 14.7 8.0 12.6 0.0 42.9
    Missouri 10 0.0 1.0 -28.6 2.5 3.4 -38.2 5.0 7.4 -11.9 50.0
West/Rocky Mountain 88 0.0 0.8 -19.8 2.0 2.7 -22.0 3.0 4.1 -20.2 53.4
    Denver 6 0.5 1.0 -33.3 2.0 1.8 -65.6 4.0 3.7 -50.0 83.3
    Los Angeles and
    Orange County
32 0.0 1.0 -11.4 3.0 3.1 -16.9 5.0 4.8 -14.0 43.8
    Phoenix 6 0.0 1.5 -43.8 2.0 2.2 -18.8 3.0 3.8 -34.3 66.7
    San Francisco 14 0.0 0.6 -42.9 1.0 3.1 -32.8 2.5 4.2 -36.6 57.1
    San Jose area 9 1.0 1.1 233.3 2.0 3.8 61.9 3.0 5.2 80.8 22.2
    Seattle area 6 1.0 0.7 -60.0 1.5 1.8 10.0 2.0 3.7 -18.5 66.7

Source: NALP Survey of Legal Employers on 2016 Recruiting. This table includes offices/firms that reported at least one lateral hire in 2015 or 2016 and which also reported complete information for both years. Collectively these 431 employers reported 6,529 lateral hires in 2016. Cities shown had at least five offices/firms collectively reporting at least 20 lateral hires in 2016. 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 some instances of firms with most attorneys located in that city or whose additional offices are located primarily in adjacent areas, and of multi-office nationwide firms consolidating two geographically adjacent offices onto one survey.

 

Table 3. Summary of NALP Survey Findings on Lateral Hiring — 2003-2016

Survey Year % Change in Aggregate
Lateral Hiring
from Previous Year
Average # of
Lateral Hires
2003 17.7% 9
2004 15.2 10
2005 19.1 12
2006 7.6 12
2007 11.4 12
2008 -26.3 8.9
2009 -52.2 5.1
2010 38.4 8.0
2011 48.5 9.5
2012 -6.3 10.3
2013 -7.3 11.1
2014 4.8 14.0
2015 8.5 14.8
2016 -10.8 15.1
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