NALP Bulletin, March 2008

Lateral hiring levels continue to be strong, with the overall volume increasing for the fifth year in a row. That is one of the findings of NALP's 2007 "Recruiting Snapshot Survey for Legal Employers," which requested information on lateral hiring in 2006 and 2007. The results shown in the table on the opposite page are based on reports from 447 employers who reported at least one lateral hire in one of the two years. The table includes cities with at least five offices collectively reporting 25 or more lateral hires in 2007.

• Overall, based on aggregate hiring of about 5,000 lateral lawyers in 2007, the volume of hiring increased by more than 11% over that for 2006, with a median of seven and an average of twelve lateral hires. Moreover, because of additional data collected in this year's survey, we know that the increase in partner lateral hires was greater than the increase in associate lateral hires - 18% growth compared with 10% growth. But, the volume of associate lateral hiring still outstripped that of lateral partner hiring, with associate lateral hiring accounting for more than three-quarters of the lateral hiring.

• As the table shows, however, changes in aggregate hiring varied considerably by firm size, with the largest aggregate increases at the smallest and largest firms. However, aggregate outcomes are only part of the story. For example, the median number of lateral associates hired in 2007 was seven across all but the smallest firms, but outcomes in the aggregate were very different, ranging from 18% growth to 7% decline. Likewise, not every office increased hiring by more than the overall average of 11%. In fact, as the last column shows, less than half increased hiring by more than 10%.

• Regional contrasts are evident, with an aggregate decrease reported from the Midwest, generally moderate growth in the Northeast and Mid-Atlantic states, and the biggest increases for both partners and associates in the Southeast and West/Rocky Mountain regions. Again, however, greatest aggregate growth does not necessarily translate into the highest medians or averages. For example, despite an overall increase of more than 27% in the Southeast, the median number of four is the lowest among the five regions. The median and average were both higher in the Midwest, but hiring in the aggregate was down.

• Every region saw a mix of increases and decreases in major markets. In some cities, lateral partner hiring and lateral associate hiring went in different directions. To cite but a few examples, offices in Philadelphia increased lateral partner hiring by 45%, with a median of eight hires, whereas associate lateral hiring was up just 4%. Nonetheless, measured as either the average or the median, the levels of activity are among the highest in Philadelphia, along with New York City. Houston, with aggregate decreases in hiring, contrasts with the Southeast as a whole. In Seattle, the level of activity, as measured by averages and medians, is below the regional norm, and aggregate volumes were down.

The results this year suggest moderate growth compared with last year's survey, which found an aggregate increase from 2005 to 2006 of about 8%. 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 five years of aggregate increases, and in some cases substantial aggregate increases - 18% from 2002-2003, 15% from 2003-2004, 19% from 2004-2005, 7.6% from 2005-2006, and 11.4% from 2006-2007.

It is also interesting to note reversals in some areas that are suggested when the current "Snapshot" findings are compared with those from last year. For example, the 12% decrease in Houston follows an increase of 55% in the prior period, and a strong increase in San Jose follows a decline in the previous period. Some cities, such as New York, Philadelphia, and Chicago posted increases in both periods, though of varying magnitudes. Increases in Washington, DC, and Atlanta have been modest in both periods, following increases of about 50% from 2004-2005. (View the complete March 2007 article here.)

Lateral Hiring in 2007 and Comparison with 2006

Source: NALP 2007 Recruiting Snapshot Survey for Legal Employers
The number of offices shown is the total number reporting at least some lateral hiring in either 2006 or 2007.
The number of offices included in each calculation may be less because not all surveys included complete information.
City figures generally do not include offices which provided one survey to cover lateral hiring nationwide or for multiple offices.
Some city figures may include a few offices in suburban locations.

A Perspective on Lateral Hiring

by Elaine T. Petrossian

Elaine T. Petrossian is Assistant Dean for Career Strategy & Advancement at Villanova University School and is a member of the NALP Research Advisory Group, on whose behalf this column was submitted.

Ten years ago, in February1998, I made a lateral move as a mid-level associate in Philadelphia. At that time in the large firm world, making a "free agent" move still felt like joining a daring new counterculture - reflecting the optimism fueled by the dot-come bubble. Today, lateral hiring at both the partner and associate levels has become a normal way of doing business for large law firms, even those that pride themselves on their cohesive culture and values.

That lateral hiring has grown steadily at the same time entry-level hiring has remained strong demonstrates that lateral acquisition is here to stay. Lateral hiring allows law firms the flexibility to recruit strategically and in "real time" as market conditions and client needs shift. A quick review of NALP's own publications and conference topics reflects that lateral hiring has become a healthy way for law firms to diversify their talent pool and maintain homegrown values.

In Philadelphia, lateral moves make headlines almost weekly. And these aren't simply a game of musical chairs from large firm to large firm. Some of the most highly sought laterals in Philadelphia and elsewhere have been skilled government lawyers, seasoned corporate counsel, founders of boutique firms, and lawyers from diverse backgrounds. Philadelphia lateral hires frequently transfuse "new blood" into the large firm culture.

Students today should be prepared for the reality that they will make a lateral move themselves at least once in their career. Moreover, most moves occur today for plain old business reasons, not necessarily due to dissatisfaction or dismay or scandal. When done wisely and in combination with a healthy entry-level program, lateral integration can be an energizing shot in the arm for lawyers and the firms they join. Viva laterals!