NALP Bulletin, April 2019
Lateral hiring volume decreased dramatically during the recession in 2008 and 2009, and then experienced a big rebound as the legal economy recovered in 2010 and 2011. Since then changes have fluctuated from a double-digit loss to double-digit growth. In 2018 aggregate lateral hiring was up by over 14%. This follows an aggregate increase of less than 2% from 2016 to 2017. Lateral associate hiring surged by almost 22%, accounting for almost all of the net increase in lateral hiring. Partner lateral hiring was off by not quite 1%. Overall lateral hiring averaged 16.5 lateral hires per office/firm, but volumes and per office figures varied greatly by firm and geography, with the highest figures recorded, perhaps not surprisingly, in New York City, where the average was just over 18, and the median number of 13.5 was about twice the nationwide median of 7. These are the overall findings about lateral hiring from NALP's "Survey of Legal Employers on 2018 Recruiting," which requested information on lateral hiring in 2017 and 2018.
The results shown in Table 1 and Table 2 are based on reports from 428 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 83% of the lateral hiring reported for 2018, and includes cities with at least five offices reporting office-specific information and collectively reporting at least 25 lateral hires in 2018.
Overall, based on aggregate hiring of over 7,000 lateral lawyers in 2018, the volume of hiring was up by 14.4% compared with 2017 in these same offices/firms, with a median of 7 and an average of 16.5 lateral hires per office/firm (Table 1). Partner lateral hiring was down by almost 1%, while associate lateral hiring increased almost 22%, averaging 10.7 per office/firm, compared with an average of 3.1 per office/firm for lateral partner hiring. Lateral associate hiring accounted for 65% of lateral hiring in 2018 and lateral partner hiring accounted for 19%. Other lateral hiring accounted for about 16% of lateral hiring in 2018, and, as the median figures suggest, many offices did not do any hiring of this type in 2018. However, aggregate hiring in this category was up by over 8%.
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 11-75 depending on firm size, and changes in aggregate volume ranged from a decrease of about 1% to an increase of over 19%. Comparing regions, the Mid-Atlantic and Northeast Regions anchored the endpoints, with volume changes of -8.6% and 21.3%, respectively. (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 from less than 1 to 1.7 lateral partner hires depending on firm size, whereas associate lateral hiring averages were in the 4 to 5 range per office, except in the largest firms where the average was almost 7.
On a regional basis, the level of lateral hiring per office was highest in the Northeast, with a median of 12 and an average of over 16 lateral hires in 2018, compared with medians of 4 to 5 in all other regions and averages that ranged from about 6 to 10. In terms of change in aggregate volume, however, it was off by almost 11% in the Mid-Atlantic Region and up by about 21% in both the Northeast and West/Rocky Mountain Regions. Aggregate changes were about 17-18% in the Southeast and Midwest. The median number of lateral hires was also highest by far in New York, at 13.5, followed by Chicago at 10.5. The median in Charlotte was 12, but based on a much smaller volume.
Among cities reporting at least 100 lateral hires in 2018 (Boston, New York, Washington, DC/Northern VA, Houston, Chicago, the Los Angeles/Orange County area, and San Francisco), Boston, New York, Chicago, and Los Angeles registered an aggregate increase. Activity in Houston and San Francisco was relatively flat, whereas Washington, DC registered a decrease of over 14%. Decreases in Houston and Washington, DC were largely driven by less partner hiring. In Boston, most of the growth came from lateral associate hiring
Despite the overall increase, of course, not every office or firm hired 14% more laterals in 2018 compared with 2017. In fact, half of offices increased lateral hiring by less than 14% in 2018 compared with 2017, and about 11% hired a number within 5% of their 2017 number. The last column in Table 2 shows that in just over half of offices the change in lateral hiring was less than 14% or negative. Among cities with at least 10 offices reporting, Washington, DC and Chicago have the largest percentage of offices, almost two-thirds, in this category. In contrast, the share of Dallas and Boston offices in this category is just 30%.
This year's survey results document a healthy increase in the level of hiring following a small increase of less than 2% from 2016 to 2017. 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, and in 2018 was the highest documented in this 16-year period. Though total volumes and changes in total volume have fluctuated, the general direction has been up since 2010. The average has stood at close to 15 or above since 2015, as Table 3 shows. (For full results of prior year surveys, see NALP Bulletin columns posted at www.nalp.org/entry-lateral.)
|ALL LATERAL HIRING IN 2018||PARTNERS||ASSOCIATES||OTHER LATERAL LAWYERS|
|Median #||Average #||Total # Reported||% Change from 2017||Median #||Average #||Total # Reported||% Change from 2017||Median #||Average #||Total # Reported||% Change from 2017||Median #||Average #||Total # Reported||% Change from 2017|
|# of Offices Reporting||PARTNERS||ASSOCIATES||TOTAL||% of Offices with Increase of Less Than 14%|
|Median # Hired in 2018||Average # Hired in 2018||% Change in # Hired 2016-2018||Median # Hired in 2018||Average # Hired in 2018||% Change in # Hired 2017-2018||Median # Hired in 2018||Average # Hired in 2018||% Change in # Hired 2017-2018|
|All firm-wide reports||94||6.5||9.2||-0.7||19.5||28.7||24.5||34.0||45.7||15.1||52.1|
|250 or fewer lawyers||26||2.0||2.9||-19.1||6.0||7.2||18.2||11.0||12.2||-0.9||57.7|
|All office specific reports||334||1.0||1.4||-1.1||3.0||5.6||17.6||5.0||8.3||13.4||50.6|
|250 or fewer lawyers||58||0.0||1.0||7.3||3.0||4.1||28.3||4.0||6.2||21.8||48.3|
|New York City||44||2.0||2.8||11.8||8.5||12.8||17.4||13.5||18.1||16.7||52.7|
|Washington, DC/Northern VA||36||1.0||1.8||-35.7||2.5||5.0||-3.2||6.0||8.7||-14.3||63.9|
|Miami/Ft. Lauderdale/W. Palm Beach||8||0.5||0.6||-28.6||1.0||3.5||0.0||3.0||4.9||-7.1||62.5|
|Los Angeles and Orange County||32||0.0||0.9||52.6||2.0||3.8||22.2||4.0||5.5||28.5||43.8|
|San Jose area||12||1.0||1.1||18.2||1.5||3.8||21.6||3.0||5.4||22.6||41.7|
|Survey Year||% Change in Aggregate Lateral Hiring
from Previous Year
|Average # of Lateral Hires|