Lateral Hiring Continues to Outpace Entry-level Hiring

NALP Bulletin, May 2008

According to information reported by offices in the 2007-2008 NALP Directory of Legal Employers, lateral hiring has been strong, outpacing entry-level hiring for the most recent three years for which data are available (2004-2006). An analysis of the data for the two most recent years reveals that the pace of lateral hiring has slowed a bit, increasing just 1% from 2005 to 2006, compared to a 10% increase in entry-level hiring.

As shown in Table 1, changes in aggregate lateral hiring ranged from a decline of 7% to an increase of 11.5%. In the largest firms the pace of lateral hiring slipped below that of entry-level hiring in 2006. Relative to entry-level hiring, lateral hiring has been strongest in firms of 101-500 lawyers.

Similarly, the overall pace of growth in entry-level hiring slowed from 9.7% between 2005 and 2006 to an expected 6.4% increase between 2006 and 2007. (Table 2.) The slackening pace was most evident at the largest firms of more than 500 lawyers, where double-digit growth was replaced with much more moderate growth of 6% to 7%. Table 2 shows these entry-level and summer hiring trends. Because this table is based on offices that reported figures for all three years, the associate counts are not comparable to those in Table 1, which required only reporting of 2005 and 2006 figures.

The number of summer 2Ls increased 8.1% between 2005 and 2006, and was expected to increase by that amount again from 2006 to 2007. These figures varied widely by firm size, with the strongest showing at the largest firms. It is also evident that the largest firms had considerably more 1Ls in their 2006 summer programs compared with 2005.

Table 1. Comparisons of Entry-Level and Lateral Hiring — 2005 and 2006


# Lateral
Hires
in 2005
# Lateral
Hires
in 2006
% Change in
Lateral
Hiring
2005-2006
#
Entry-Level
Hires
in 2005
#
Entry-Level
Hires
in 2006
% Change in
Entry-Level
Hiring
2005-2006
Ratio of
Lateral to
Entry-Level
Hiring in 2005
Ratio of
Lateral to
Entry-Level
Hiring in 2006
# of
Offices
Overall 10,397 10,499 1.0 8,294 9,152 10.3 1.25 1.15 1,336
By # of Lawyers Firmwide
50 or fewer 191 193 1.0 206 225 9.2 0.93 0.86 105
51-100 582 630 8.2 482 479 -0.6 1.21 1.32 138
101-250 1,984 2,104 6.0 1,376 1,442 4.8 1.44 1.46 257
251-500 2,272 2,287 0.7 1,590 1,698 6.8 1.43 1.35 308
501-700 1,555 1,734 11.5 1,292 1,521 17.7 1.20 1.14 158
701+ 3,813 3,551 -6.9 3,348 3,787 13.1 1.14 0.94 370

Note: Figures are based on 1,336 law offices/firms in the US and Canada that reported at least one entry-level or lateral hire starting work in 2005 or 2006 in the 2007-2008 NALP Directory of Legal Employers. Offices that reported firm-wide information across multiple offices are counted only once to avoid double-counting.

Table 2. Hiring Trends: 2005-2007 Overall and by Firm Size
for Entry-level and Summer Associates


# Hires
in 2005
Median
2005
# Hires
in 2006
Median
2006
# Hires
in 2007
Median
2007
% Change in
Hiring
2005-2006
% Change in
Hiring
2006-2007
# of
Offices
Entry-level associates
Overall 6,984 3.0 7,661 4.0 8,149 4.0 9.7 6.4 1,079
50 or fewer 178 2.0 197 2.0 213 2.0 10.7 8.1 89
51-100 434 3.0 426 3.0 469 3.0 -1.8 10.1 122
101-250 1,117 5.0 1,168 5.0 1,225 5.0 4.6 4.9 210
251-500 1,414 3.0 1,501 3.0 1,611 3.0 6.2 7.3 247
501-700 1,125 3.0 1,346 4.0 1,440 4.0 19.6 7.0 130
701+ 2,716 5.0 3,023 6.0 3,191 6.0 11.3 5.6 281
2L summer associates
Overall 9,674 4.0 10,458 4.0 11,306 5.0 8.1 8.1 1,193
50 or fewer 216 2.0 208 2.0 239 2.0 -3.7 14.9 90
51-100 515 4.0 558 4.0 549 4.0 8.3 -1.6 127
101-250 1,425 5.0 1,523 5.0 1,552 6.0 6.9 1.9 217
251-500 1,912 3.0 1,962 4.0 2,067 4.0 2.6 5.4 262
501-700 1,549 5.0 1,719 5.0 1,853 5.0 11.0 7.8 147
701+ 4,057 6.0 4,488 7.0 5,046 8.0 10.6 12.4 350
1L summer associates
Overall 1,712 1.0 2,031 2.0 8.6 790
50 or fewer 70 1.0 74 1.0 5.7 45
51-100 164 2.0 166 1.0 1.2 80
101-250 349 2.0 360 2.0 3.2 151
251-500 428 2.0 507 2.0 18.5 178
501-700 200 1.0 238 2.0 19.0 97
701+ 501 1.0 686 2.0 36.9 239

Note: For each category of hires, figures are based on law offices/firms in the US and Canada that reported at least one hire starting work in 2005, 2006, or 2007 in the NALP 2007-2008 Directory of Legal Employers. Offices that reported firm-wide information across multiple offices are counted only once to avoid double-counting. Figures for 2007 reflect expected hires as of February 2007. Since 1L hiring is difficult to project, 2007 expected hiring is not reported.

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