Lateral Hiring Up Again

Lateral hiring levels continue to be strong, with the overall volume increasing for the fourth year in a row. That is one of the findings of NALP’s “Snapshot of the 2006 Recruiting Season” survey, which requested information on lateral hiring in 2005 and 2006. The results shown on the opposite page are based on reports from 331 employers who reported at least some lateral hiring in one of the two years. The table below includes cities with at least five offices collectively reporting 25 or more lateral hires in 2006.

  • Overall, based on aggregate hiring of almost 3,700 lateral lawyers in 2006, the volume of hiring increased 7.6%, with a median figure of 7 lateral hires in 2006. In some cases, lateral hiring also reflects the effects of merger activity. The average number hired was 12. Changes varied greatly by firm size, from a small decrease in firms of 50 or fewer and 251-500 lawyers, to a 24% increase in firms of 51-100 lawyers. While the median numbers of lateral hires were similar in firms of more than 100 lawyers, aggregate changes varied from a small decrease to a 14% increase.

  • At the same time, as the last four columns show, the increase in the aggregate number of laterals hired does not mean that every office or firm increased hiring. In fact, 39% of offices reported a decrease of more than 10%, while almost half increased hiring by more than 10%. Thus, relatively few offices maintained steady or nearly steady hiring.

  • At the regional level, double-digit increases were reported from the Mid-Atlantic and Southeast regions, with the largest aggregate increases reported from Austin, Houston, and Tampa/St. Petersburg. Aggregate lateral hiring was close to flat in the West. In every region of the US except the Mid-Atlantic, at least one market posted an aggregate decline in hiring. For example, in the Northeast it was Boston; in the Southeast, Dallas and Miami; in the Midwest, Missouri and Wisconsin; and in the West, Los Angeles, Orange County, and the San Jose area. As noted, however, individual offices can vary from the aggregate. For example, although aggregate hiring in Philadelphia increased by 18%, half of the offices decreased hiring by more than 10%. In Missouri, by contrast, decreased hiring occurred almost across the board, and aggregate figures reflect that.

  • Lateral hiring was steady, or relatively so, only in Atlanta and North Carolina.

The results this year suggest a moderating pace of growth compared with last year’s survey, which found an aggregate increase from 2004 to 2005 of 19%. Survey results, of course, reflect the respondent pool. Nonetheless, to the extent that the survey pool is similar to that of prior years with respect to firm size and location, NALP’s “Snapshot” survey has documented four years of lateral growth, and in some cases strong lateral growth: 18% from 2002-2003; 15% from 2003-2004; 19% from 2004-2005; and 7.6% from 2005-2006.

It is also interesting to note the reversals in some areas that are suggested when the current “Snapshot” findings are compared with those from last year. For example, the 55% increase in Houston follows a decrease of 25% in the prior period, and the 13% decrease in Boston follows a 52% increase from 2004-2005. Some cities, such as New York, Philadelphia, and Denver posted increases in both periods. The modest increases in Washington, DC and Atlanta follow increases of about 50% from 2004-2005. (To view the complete March 2006 article, see http://www.nalp.org/content/index.php?pid=367.)

Lateral Hiring in 2006 and Comparison with 2005

  WHEN COMPARED TO 2005, % OF OFFICES REPORTING A:
  # of Offices Reporting Median # Hired in 2006 Average # Hired in 2006 % Change in # Hired 2005-2006 Decrease of More than 10% Change of 10% or Less Increase of 11-75% Increase of More than 75%
All employers 331 7.0 12 7.6% 39.2% 14.6% 22.9% 23.2%
By # of Lawyers Firmwide:
50 or fewer 20 2.0 3 -1.9 47.4 21.1 0.0 31.6
51-100 32 5.5 6 24.1 41.4 3.4 24.1 31.0
101-250 70 8.0 11 11.7 42.9 5.7 31.4 20.0
251-500 59 9.0 11 -0.9 45.1 13.7 19.6 21.6
501-700 33 8.0 25 13.8 28.1 15.6 31.3 25.0
701+ 114 7.5 12 4.7 35.5 21.8 20.9 21.8
By NALP Region and City:
Northeast 47 13.0 17 7.7 36.4 15.9 25.0 22.7
  Boston area 11 11.0 15 -13.1 54.5 0.0 18.2 27.3
  New York City 30 18.0 21 18.1 25.0 25.0 25.0 25.0
  Mid-Atlantic 63 8.0 15 10.3 40.7 13.6 22.0 23.7
  Philadelphia 8 21.0 38 18.4 50.0 0.0 25.0 25.0
  Washington, DC/Northern VA 36 8.5 13 7.8 37.5 21.9 15.6 25.0
Southeast 80 6.0 9 11.1 33.8 20.8 19.5 26.0
  Atlanta 13 16.0 17 2.9 18.2 36.4 18.2 27.3
  Austin 8 4.5 6 34.3 25.0 12.5 12.5 50.0
  Dallas 9 7.0 9 -15.3 44.4 33.3 11.1 11.1
  Houston 9 9.0 9 54.7 22.2 11.1 33.3 33.3
  Miami/Ft. Lauderdale/W. Palm Beach 8 3.5 5 -22.9 50.0 25.0 0.0 25.0
  North Carolina 12 4.0 7 1.6 45.5 27.3 18.2 9.1
  Tampa/St. Petersburg 5 10.0 13 45.5 20.0 20.0 40.0 20.0
Midwest 65 8.0 12 6.4 42.4 5.1 23.7 28.8
  Chicago 17 13.0 21 22.2 35.3 5.9 29.4 29.4
  Michigan 7 9.0 9 16.7 50.0 0.0 16.7 33.3
  Minneapolis/St. Paul 9 8.0 11 35.2 11.1 11.1 22.2 55.6
  Missouri 6 7.5 15 -17.4 83.3 0.0 16.7 0.0,
  Ohio 13 6.0 8 7.1 33.3 0.0 44.4 22.2
  Wisconsin 7 5.0 7 -25.0 66.7 0.0 16.7 16.7
West/Rocky Mountain 73 5.0 8 2.2 43.1 15.3 26.4 15.3
  Denver 5 7.0 13 40.0 0.0 40.0 60.0 0.0
  Los Angeles area 11 5.0 6 -23.3 36.4 27.3 18.2 18.2
  Orange County, CA 7 3.0 4 -15.6 57.1 28.6 14.3 0.0
  Phoenix 7 12.0 11 13.6 42.9 0.0 42.9 14.3
  San Francisco 12 3.0 11 11.5 45.5 18.2 9.1 27.3
  San Jose area 10 5.5 7 -16.5 50.0 0.0 50.0 0.0

Source: Snapshot Survey, December 2006/January 2007. Note: The number of offices reporting both 2005 and 2006 figures is somewhat smaller than the figure shown, which is the number of offices reporting a 2006 figure. City figures may include offices that indicated that they recruit for multiple offices. Some city figures include a few offices in suburban locations. Orange County includes Costa Mesa, Irvine, and Newport Beach. The San Jose area includes Menlo Park, Palo Alto, East Palo Alto, Redwood City, and Sunnyvale.

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