NALP Bulletin, March 2018

Lateral hiring volume decreased dramatically during the recession in 2008 and 2009, then experienced a big rebound as the legal economy recovered in 2010 and 2011. Since that time, there have been small year-to-year increases and decreases. In 2017 aggregate lateral hiring was up by less than 2%. This follows an aggregate decrease of almost 11% from 2015 to 2016. Lateral associate hiring was essentially flat. Overall 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 just over 16, and the median number of 15 was over twice the nationwide median of 7. These are the overall findings about lateral hiring from NALP's "Survey of Legal Employers on 2017 Recruiting," which requested information on lateral hiring in 2016 and 2017.

The results shown in Table 1 and Table 2 are based on reports from 427 law offices that reported at least one lateral hire in one of the two years. Table 1 reports aggregate information for partners, associates, and all other lateral lawyers. Table 2 reports on lateral partner and associate hiring, which accounted for 82% of the lateral hiring reported for 2017 and includes cities with at least five offices reporting office-specific information and collectively reporting at least 25 lateral hires in 2017.

• Overall, based on aggregate hiring of over 6,400 lateral lawyers in 2017, the volume of hiring was up by 1.6% compared with 2016 in these same offices/firms, with a median of 7 and an average of 15.1 lateral hires per office/firm (Table 1). Partner lateral hiring was up by over 12%, while associate lateral hiring was almost flat. Nonetheless the volume of associate lateral hiring was far greater, averaging 9.1 per office/firm, compared with an average of 3.2 per office/firm for lateral partner hiring, resulting in an overall aggregate increase of just 1.6%. Lateral associate hiring accounted for 60% of lateral hiring in 2017 and lateral partner hiring accounted for 22%. Other lateral hiring accounted for about 18% of lateral hiring in 2017, and, as the median figures suggest, the majority of offices did not do any hiring of this type in 2017. Aggregate hiring in this category was off by 3.3%.

• 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 12-24 depending on region, and changes in aggregate volume ranged from a decrease of 21% to an increase of 21%. The Northeast and West/Rocky Mountain Regions anchored these endpoints. By contrast, other regions saw much less change. (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 1.1 and 2.4 lateral partner hires depending on firm size, whereas associate lateral hiring averages were in the 3 to 4 range per office, except in the largest firms where the average was almost 6.

• 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 almost 14 lateral hires in 2017, compared with medians of 3 to 5 in all other regions and averages that ranged from less than 5 to 9.5. In terms of changes in aggregate volumes, however, it was virtually flat in the Southeast and West. Rocky/Mountain Regions, and up by modest amounts (2.5 - 4.5%) in other regions. The median number of lateral hires was also highest by far in New York, at 15, followed by Chicago at 11.5, and 9.5 in Seattle.

• Among cities reporting at least 100 lateral hires in 2017 (New York, Washington DC, Chicago, the Los Angeles/Orange County area, and San Francisco), all except the Los Angeles area registered an aggregate increase. However, the Washington, DC/Northern Virginia area increase was driven by increased partner hiring, whereas the opposite was true in San Francisco. An increase in lateral partner hiring in the Los Angeles area was not enough to offset the decrease in lateral associate hiring.

• Despite the small overall increase, of course, not every office or firm hired just 2% more laterals in 2017 compared with 2016. In fact, over 40% of offices increased lateral hiring by more than 2% in 2017 compared with 2016, and about 13% hired a number within 2% of their 2016 number. The last column in Table 2 shows that in just over half of offices the change in lateral hiring was less than 2% or negative. Among cities with at least 10 offices reporting, Los Angeles/Orange County and the San Jose area are notable for having a relatively large percentage of offices-about three-quarters-in this category. In contrast, the share of Dallas offices in this category is just one-third.

• This year's survey results document a very small increase in the level of hiring following a decrease of almost 11% from 2015 to 2016. Survey results, of course, reflect the respondent pool for each year. Nonetheless, to the extent that the survey pool is relatively consistent with respect to firm size and location, it appears that the average number of lateral hires per office/firm remains well above the levels measured in 2008 to 2010, though total volumes and changes in total volume have fluctuated. The average has stood at about 15 since 2015, as Table 3 shows. (For full results of prior year surveys, see NALP Bulletin columns posted here.)
  

Table 1. Summary of Lateral Hiring — 2017

Table 2. Lateral Hiring in 2017 and Comparison with 2016

Source: NALP Survey of Legal Employers on 2017 Recruiting
This table includes offices/firms which reported at least one lateral hire in 2016 or 2017 and which also reported complete information for both years. Collectively these 427 employers reported 6,441 lateral hires in 2017. Cities shown had at least 5 offices/firms collectively reporting at least 25 lateral hires in 2017.
Following the overall total shown in the first line, the table separates out surveys which reported information firm-wide, or for multiple offices, from those which 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 — A 15-year Retrospective — 2003-2017