Entry-Level and Lateral Hiring -- On the Road to Recovery?

NALP Bulletin, March 2011

Just how much did the number of entry-level associates starting work in law firms in 2009 decline? New research from NALP suggests that, after holding relatively steady from 2007 to 2008, the volume of entry-level associates starting work in 2009 plunged by an estimated 40%. Meanwhile, the decline in lateral hiring started even earlier, with the volume dropping off by an estimated one-quarter in 2008 compared with 2007, and falling by an estimated 46% from 2008 to 2009.

These figures are based on information reported by law offices in both the 2008 NALP Directory of Legal Employers (for 2007 information), and the 2010 NALP Directory of Legal Employers (for 2008, 2009, and expected 2010 information). All told, 1,055 offices/firms reported usable and comparable entry-level figures in both directories, and 1,071 offices/firms reported usable and comparable lateral hiring figures in both directories. However, because the NALP Directory of Legal Employers is not a survey but rather serves primarily as a source of information for law students, it is both less rigorous than a survey with respect to reporting and also should not be construed as representative of law firms as a whole. Instead, the figures presented in the tables accompanying this article reflect general trends in primarily large law firms from 2007-2009.

As Table 1 shows, the volume of entry-level associates starting work in 2009 was off by over 3,700 compared with the same offices/firms reporting for 2007 and 2008. How much of this amount represents deferrals of start dates into 2010 is not known. However, a decrease of this magnitude is not out of line with previous NALP research that estimated the number of deferrals from the class of 2009 (who would have summered in 2008) at between 3,200 and 3,700. Regardless of the deferral issue, it is evident that, after averaging 9 new workers in 2007 and 2008, by 2009 that figure was down to just over 5. It is also evident from Table 1 that the decrease over the two-year period was greatest in the largest firms, but that decreases started earlier — between 2007 and 2008 — at firms of 250 or fewer lawyers compared with larger firms.

Lateral hiring was off even more, as shown in Table 2. Again large firms saw the biggest decreases, estimated at almost 54% from 2008 to 2009, and over 67% from 2007 to 2008. The average number of hires in these firms dropped from about 14 to 4.

What did firms expect for 2010? Not as many offices/firms could report their expected number of entry-level associates starting work in 2010. Based on those who were able to, the number of entry-level associates beginning work in 2010 was expected to be up by about 21%, with the strongest surges evident in firms with more than 500 lawyers. Small firms, by contrast, expected even fewer new workers in 2010 compared with 2009. The overall increase notwithstanding, it remains the case that the number of entry-level associates expected to start work in 2010 was about 75% of the number that started at these same firms in 2007 and 2008.

With respect to lateral hiring, most firms find it difficult to project a reliable figure. However, preliminary findings from NALP's 2010 Survey of Fall Recruiting and Associate Deferrals, which also asked about lateral hiring in 2009 and 2010, show that lateral hiring increased by about 40% from 2009 to 2010, with most of the increase accounted for at the associate level. A full report on the results of the lateral hiring information collected on that survey will be published in the April 2011 NALP Bulletin.

Table 1. Entry-level Associates Starting Work — 2007-2009

  Total 2007 Average 2007 Median 2007 Total 2008 Average 2008 Median 2008  
Total 9,449 9.0 4.0 9,413 8.9 4.0  
By size of firm (# of lawyers)
100 or fewer 531 3.3 3.0 485 3.0 2.0  
101-250 1,380 7.3 6.0 1,306 6.9 5.5  
251-500 1,610 6.4 3.0 1,575 6.2 3.0  
501-700 1,168 8.8 4.0 1,177 8.8 4.0  
701+ 4,760 14.9 7.0 4,870 15.3 7.0  
  Total 2009 Average 2009 Median 2009 % Change in # of Entry-Level Associates Starting Work
07-08
% Change in # of Entry-Level Associates Starting Work
08-09
% Change in # of Entry-Level Associates Starting Work
07-09
% Change in # of Entry-level Associates Expected
09-10
Total 5,695 5.4 2.0 -0.4% -39.5% -39.7% 20.9%
By size of firm (# of lawyers)
100 or fewer 381 2.4 2.0 -8.7 -21.4 -28.2 -19.1
101-250 851 4.5 3.0 -5.4 -34.8 -38.3 18.3
251-500 1,004 4.0 1.0 -2.2 -36.3 -37.6 11.4
501-700 657 4.9 2.0 0.8 -44.2 -43.8 26.5
701+ 2,802 8.8 2.0 2.3 -42.5 -41.1 29.9

Note: Figures for 2007-2009 are based on offices that reported at least one entry-level associate beginning work over the period 2007-2009. The percent change from 2009-10 is based on a smaller number of offices (854) that also reported expected 2010 figures in the 2010 directory. Source: NALP Directory of Legal Employers, 2008-2009 and 2010-2011 editions.

Table 2. Lateral Hiring — 2007-2009

  Total 2007 Average 2007 Median 2007 Total 2008 Average 2008 Median 2008
Total 10,691 10.0 6.0 8,016 7.5 4.0
By size of firm (# of lawyers):
100 or fewer 590 3.9 3.0 422 2.8 2.0
101-250 1,913 10.1 8.0 1,642 8.7 6.0
251-500 2,165 7.8 4.0 1,742 6.2 3.0
501-700 1,597 12.6 7.0 1,094 8.6 5.0
701+ 4,426 13.7 8.0 3,116 9.6 5.0
  Total 2009 Average 2009 Median 2009 % Change in Lateral Hiring
07-08
% Change in Lateral Hiring
08-09
% Change in Lateral Hiring
07-08
Total 4,296 4.0 2.0 -25.0% -46.4% -59.8%
By size of firm (# of lawyers):
100 or fewer 270 1.8 1.0 -28.5 -36.0 -54.2
101-250 883 4.7 3.0 -14.2 -46.2 -53.8
251-500 1,056 3.8 2.0 -19.5 -39.4 -51.2
501-700 642 5.1 2.0 -31.5 -41.3 -59.8
701+ 1,445 4.5 2.0 -29.6 -53.6 -67.4

Note: Figures are based on offices that reported at least one lateral hire beginning work over the period 2007-2009. Source: NALP Directory of Legal Employers, 2008-2009 and 2010-2011 editions.

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