NALP Bulletin, March 2006

NALP’s “Snapshot of the Recruiting Season” survey requested information on lateral hiring in 2004 and 2005. The results shown on the opposite page are based on reports from 485 employers who reported at least some lateral hiring in one of the two years. The table includes cities with at least five firms collectively reporting 25 or more lateral hires in 2005.

• Overall, based on aggregate hiring of just over 5,800 lateral lawyers in 2005, the volume of hiring increased 19%, with a median figure of 7 lateral hires in 2005. In some cases, lateral hiring also reflects the effects of merger activity. The average number hired was 12. Firms of more than 500 lawyers collectively reported the biggest increase, almost 25%. In contrast, while the median and average number of lateral hires was nearly identical in firms of 251-500 lawyers, the aggregate increase was about half that of the largest firms. Overall lateral hiring was flat in the smallest firms.

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

• At the regional level, the largest increase, over one-third, was reported from the Northeast. This increase was largely fueled by an increase of almost 52% in Boston, and an increase of 39% in New York City. Lateral hiring in the Mid-Atlantic region was up by 25%, with firms in Pittsburgh and Washington, DC posting the largest aggregate increases. Lateral hiring increased much more modestly in the Midwest and West/Rocky Mountain regions. Outside of the Northeast, at least one city in each region posted an aggregate decline in hiring. For example, in the Mid-Atlantic region it was Virginia; in the Southeast, Houston; in the Midwest, Chicago, St. Louis, and Michigan; and in the West, San Francisco, Seattle, and Phoenix. As noted earlier, however, individual offices can vary from the aggregate. For example, while half of offices in San Francisco reported a decline in lateral hiring, 40% did report an increase of more than 10%. Likewise, in Chicago, 35% of offices reported an increase of more than 10%.

• Other cities reporting aggregate increases include Philadelphia, Wilmington, Atlanta, Charlotte, Miami, Tampa, Minneapolis, Ohio, Denver, Portland, OR, and Orange County, CA. Lateral hiring was steady or relatively so in Northern New Jersey, Dallas, Los Angeles, and San Diego.

The results this year are similar to those of the 2004 survey, which found an aggregate increase from 2003 to 2004 of almost 15%. 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 three years of fairly strong lateral growth: 18% from 2002-2003; 15% from 2003-2004; and 19% from 2004-2005. 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 25% decline in Houston follows an increase of 72% in the prior period, and the 52% increase in Boston follows relatively little growth from 2003 to 2004. Some cities, such as New York, posted increases in both periods, whereas the opposite was true of Chicago and San Francisco.

Lateral Hiring in 2005 and Comparison with 2004

Source: NALP Snapshot Survey, December 2005/January 2006
Note: The number of offices reporting both 2004 and 2005 figures is somewhat smaller than the figure shown, which is the number of offices reporting a 2005 figure. City figures may include offices which 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 San Jose.