Lawyer Hiring: The Lead Up to the Slow Down

NALP Bulletin, May 2009

Lateral hiring was off by more than 25% in 2008 according to the findings of NALP's 2008 "Recruiting Snapshot Survey for Legal Employers" reported in the March 2009 NALP Bulletin. This column takes a look at lateral hiring in the year immediately preceding that decrease and provides additional insights on recent law firm hiring by comparing the level of lateral hiring with entry-level hiring.

According to information reported in the 2008-2009 NALP Directory of Legal Employers, law firm lateral hiring remained quite strong through 2007, outpacing entry-level hiring for the most recent years for which data are available (2006 and 2007). While the growth rate of lateral hiring was less than that of entry-level hiring from 2006 to 2007 (5.5% versus 9.4%), the volume of lateral hiring continued to outpace that of entry-level hiring in 2007.

As shown in Table 1, changes in aggregate lateral hiring ranged from a decline of about 4% to an increase of almost 15%. In the smallest firms the pace of lateral hiring remained below that of entry-level hiring in 2007. In the largest firms, aggregate hiring of entry-level and lateral lawyers was nearly equal. Relative to entry-level hiring, lateral hiring was strongest in firms of 101-700 lawyers.

The overall pace of growth in entry-level hiring slowed dramatically from 9% between 2006 and 2007, to an expected increase of less than 2% between 2007 and 2008. (Table 2.) The slackening pace was most evident at firms of 500 or fewer lawyers, where double-digit, or close to double-digit, growth was replaced by decreases of 2 to 5%. Because Table 2 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 2006 and 2007 figures.

The number of summer 2Ls increased 7.5% between 2006 and 2007, but was expected to increase by just over 2% from 2006 to 2007. These figures varied widely by firm size, with the strongest showing at the largest firms of more than 700 lawyers. It is also evident that, overall, firms had considerably more 1Ls in their summer 2007 programs compared with 2006.

Table 1. Comparisons of Entry-Level and Lateral Hiring--2006 and 2007

  # Lateral
Hires
in 2006
# Lateral
Hires
in 2007
% Change in
Lateral
Hiring
2006-2007
#
Entry-Level
Hires
in 2006
#
Entry-Level
Hires
in 2007
% Change in
Entry-Level
Hiring
2006-2007
Ratio of
Lateral to
Entry-Level
Hiring in 2006
Ratio of
Lateral to
Entry-Level
Hiring in 2007
# of
Offices
Overall 10,831 11,429 5.5% 9,014 9,859 9.4% 1.20 1.16 1,309
By # of Lawyers Firmwide
50 or fewer 152 148 -2.6 194 212 9.3 0.78 0.70 89
51-100 511 586 14.7 426 460 8.0 1.20 1.27 129
101-250 1,949 2,151 10.4 1,402 1,520 8.4 1.39 1.42 264
251-500 2,129 2,288 7.5 1,488 1,700 14.2 1.43 1.35 315
501-700 1,910 1,830 -4.2 1,268 1,309 3.2 1.51 1.40 169
701+ 4,180 4,426 5.9 4,236 4,658 10.0 0.99 0.95 343

Note: Figures are based on 1,309 law offices/firms in the US and Canada that reported at least one entry-level or lateral hire starting work in 2006 or 2007 in the 2008-2009 NALP Directory of Legal Employers. Offices that reported firm-wide information across multiple offices are counted only once to avoid double-counting. In some cases, in order to obtain more comprehensive coverage, a firm's collective form was used instead of individual office forms. Since lateral hiring is difficult project, expected lateral hiring for 2008 is not reported.

Table 2. Hiring Trends: 2006-2008
Overall and by Firm Size for Entry-level and Summer Associates

  # Hires
in 2006
Median
2006
# Hires
in 2007
Median
2007
# Hires
in 2008
Median
2008
% Change in
Hiring
2006-2007
% Change in
Hiring
2007-2008
# of
Offices
Entry-level associates
Overall 8,000 4.0 8,719 4.0 8,872 4.0 9.0 1.8 1,036
50 or fewer 178 2.0 193 2.0 188 2.0 8.4 -2.6 78
51-100 389 3.0 430 3.0 410 3.0 10.5 -4.7 118
101-250 1,221 5.0 1,336 5.0 1,305 5.0 9.4 -2.3 206
251-500 1,302 2.0 1,479 3.0 1,435 3.0 13.6 -3.0 223
501-700 1,160 4.0 1,184 4.0 1,231 4.0 2.1 4.0 143
701+ 3,750 6.0 4,097 7.0 4,303 7.0 9.3 5.0 268
2L summer associates
Overall 10,386 4.0 11,160 4.0 11,417 5.0 7.5 2.3 1,145
50 or fewer 191 2.0 202 2.0 198 2.0 5.8 -2.0 78
51-100 517 4.0 489 4.0 501 4.0 -5.4 2.5 117
101-250 1,438 5.0 1,487 5.0 1,462 6.0 3.4 -1.7 213
251-500 1,743 3.0 1,863 3.0 1,934 3.0 6.9 3.8 260
501-700 1,436 4.0 1,516 5.0 1,451 4.0 5.6 -4.3 152
701+ 5,061 7.0 5,603 8.0 5,871 8.0 10.7 4.8 325
1L summer associates
Overall 1,931 2.0 2,165 2.0 12.1 780
50 or fewer 52 1.0 52 1.0 0.0 39
51-100 160 1.0 195 2.0 21.9 77
101-250 379 2.0 391 2.0 3.2 150
251-500 383 1.0 430 2.0 12.3 167
501-700 214 1.0 251 2.0 17.3 110
701+ 743 2.0 846 2.0 13.9 237

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 2006, 2007, or 2008 in the 2008-2009 NALP Directory of Legal Employers. Offices that did not report expected expected 2008 figures in that category are excluded. Offices that reported firm-wide information across multiple offices are counted only once to avoid double-counting. In some cases, in order to obtain more comprehensive coverage, a firm's collective form was used instead of individual office forms. Figures for 2008 reflect expected hires as of February 2008. Since 1L hiring is difficult to project, 2008 expected hiring is not reported.

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