Entry-Level Hiring Continues to Increase in Law Firms; Lateral Hiring Slowed, But Still Exceeded Entry-Level (2/15/01)

The market for entry-level associates at law firms continues to grow, according to the 2000 edition of Patterns & Practices: Measures of Law Firm Hiring, Leverage & Billable Hours, an annual publication from NALP. Law firms increased entry-level hiring by 5% from 1998-99 and forecasted an increase of over twice that, almost 12%, from 1999-2000. This projected acceleration in hiring occurred in all but firms of 101-250 attorneys. Firms of 100 or fewer attorneys expected 28% growth from 1999-2000, far exceeding the national average, after a decrease in hiring in the prior period. Interestingly, employers had projected that their entry-level hiring would increase by over 12% between 1998 and 1999. (See the prior edition of Patterns & Practices.) In fact the increase turned out to be 5%.

Using information drawn from the two most recent editions of the National Directory of Legal Employers, published by NALP and Harcourt, Patterns & Practices provides expansive documentation of the hiring of entry-level associates, summer associates, and lateral attorneys at about 1,100 law offices representing well over 600 major law firms nationwide. NALP's unique access to such broad coverage over time makes Patterns & Practices the premier source for valuable perspectives on hiring at the national, state, regional, and city level.

Distinct regional differences in hiring are also evident. The market was particularly strong in the West/Rocky Mountain region, with a 23% increase expected in entry-level hiring. Elsewhere, expected entry-level increases ranged from 7.3% in the Mid-Atlantic region to 13.6% in the Southeast.

Among the cities that collectively expected to hire at least 100 entry-level associates in 2000, anticipated changes from 1999 ranged from a 59% increase in the San Jose area to an 11.2% decrease in Philadelphia. In some cities, the expected change from 1999 to 2000 is very different from the change from 1998 to 1999. For example, firms in Columbus, Ohio planned to increase entry-level hiring by over 21% from 1999 to 2000, compared with flat hiring in the prior period. Philadelphia and Pittsburgh also showed contrasts, from large increases to expected decreases.

Nationally, lateral hiring decreased a small amount (-1.3%) between 1998 and 1999, although firms continued to hire slightly more lateral attorneys than entry-level attorneys. A plurality of offices reported decreased lateral hiring between 1998 and 1999. In firms of 100 or fewer attorneys, however, lateral hiring increased substantially (by 11.3%).

When analyzed by region, the contrast in lateral hiring is dramatic. In the West region, lateral hiring increased by 26% in 1999 over 1998 levels — and yet in every other region lateral hiring decreased during that same period. These patterns were repeated in many of the larger cities, but there are some notable exceptions. The boom in the West did not hold true for Phoenix and Denver, which experienced decreases, and while lateral hiring in the Midwest fell by 6%, the Minneapolis/St. Paul metropolitan area experienced a whopping 62% increase.

Patterns & Practices documents other findings, including:

  • Nationwide, 89% of second-year summer associates considered for an associate offer received an offer. This ranged from about 82% in firms of 100 or fewer attorneys to about 94% in large firms. At the city level, in Austin 76% of 1999 summer associates considered for an offer received an offer; in New York City, nearly all (98%) summer associates did so.
  • In 2000, firms on average employed slightly more associates than partners, for a ratio of 1.11. Large firms are typically more highly leveraged, with a ratio of 1.60. Smaller firms, in contrast, employ fewer associates than partners. On a city-by-city basis, these figures ranged from 0.65 in Portland, Oregon to 2.37 in the San Jose area.
  • In 1999, billable hour requirements ranged from 1,450 to 2,100 hours per year in 1999, although most offices reporting a minimum require either 1,800 or 1,900 hours (29.7% and 27.1% of offices, respectively). In New York City, billable hours requirements of 1,900 or more hours per year are the norm, with 85% of the offices which reported a minimum reporting at this level. This was true of 80% of the offices in Chicago and of 90% of the offices in Houston.
  • With respect to actual hours billed, about 22% of offices reported an average of fewer than 1,800 hours per year. A slightly smaller percentage — 17.9% — reported an average exceeding 1,950 hours per year.

In addition to documenting nationwide and regional hiring trends , the 114-page report presents detailed information on entry-level and lateral hiring, offers, leverage ratios, and billable hours for 26 cities and ten states, including:

Cities – Atlanta, Austin, Boston, Charlotte, Chicago, Cincinnati, Cleveland, Columbus, Dallas, Denver, Houston, Los Angeles, Miami, Minneapolis/St. Paul, New York City, Orange County California, Philadelphia, Phoenix, Pittsburgh, Portland, Oregon, San Diego, San Francisco, San Jose area, Seattle area, Tampa/St. Petersburg, and Washington, DC.

States – California (outside Los Angeles, Orange County, San Diego, San Francisco, and the San Jose area), Connecticut, Florida (outside Miami and Tampa/St. Petersburg), Michigan, Missouri, New Jersey, New York (outside New York City), Tennessee, Virginia, and Wisconsin.

Hiring Trends, 1998-2000

  # Hired in 1998 # Hired in 1999 # Expected to be hired in 2000 % Change 1998-1999 % Change 1999-2000 # Offices reporting
Entry-level associates 7,624 8,007 8,944 5.0 11.7 1,031
Second-year summer associates 9,353 10,017 10,776 7.1 7.6 1,068

Lateral Hiring, 1998 and 1999

# Hired in 1998 # Hired in 1999 % Change 1998-1999 # of Laterals Hired for Each Entry-Level Associate Hired 1998 # of Laterals Hired for Each Entry-Level Associate Hired 1999 # Office Reporting
9,150 9,030 -1.3 1.09 1.07 1,117

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