Tag Archives: Law Firm Stability

Lateral Attorney Hiring Trends in 2023: Adapting to a Shifting Economy

Trends in the Lateral Attorney Hiring Market in 2023

Certain practice areas have maintained consistent hiring or experienced a modest increase as the economy hints at recovery entering the latter half of 2023.

General State of the Economy and Law Firm Financial Stability

Though foundational components of the U.S. economy, like steady GDP growth and historically low unemployment rates, show strength, depressed corporate activity levels are affecting the demand for legal services. The situation worsened due to law firms over-hiring in 2021, leading to decreased productivity, especially among junior associates. However, certain practice areas remain in demand, signifying an increase in deal activities in some corporate sectors, which, in turn, is boosting law firm requirements and attorney recruitment.

Law firms have seen a rise in demand over the past quarter, aligning with the broader economic recovery. A recent Q2 2023 report by the Thomson Reuters Law Firm Financial Index (LFFI) revealed a 1.5% demand increase for legal services. This was a significant jump from the 0.1% rise in Q1. The study also highlighted an impressive 5.9% surge in client-agreed rates, the most substantial in over a decade. Demand mostly catered to countercyclical areas like bankruptcy and employment and less economically sensitive fields like litigation and antitrust.

However, the path to economic recovery isn’t devoid of challenges. Law firms grapple with overcapacity and efficiency issues. A survey by Wells Fargo’s Legal Specialty Group indicated a 4.4% revenue growth for law firms in the first half of 2023 but pointed out struggles related to an oversupply of attorneys hired during 2021-2022. Additionally, according to a Decipher Investigative Intelligence report, lateral hiring in Q2 2023 dropped by 33% year-over-year. Interestingly, partner hiring dipped by just 4%, while associate hiring plummeted by 43%.

Busy Associate Hiring Practice Areas

Even with many law firms overstaffed, certain areas continue to recruit. These sectors range from those traditionally countercyclical to ones less influenced by economic shifts or aligned with recent economic enhancements.

Labor & Employment

This sector has remained active over the last two years, particularly in employment litigation and counseling. Companies, still navigating a backlog of L&E investigations from the pandemic era, coupled with a rise in class action suits against employers, means L&E associates are highly sought after.

Data Privacy and Cybersecurity

The increasing number of corporate data breaches and evolving regulations have created a demand spike for experts in data privacy and cybersecurity.

Restructuring

Aligning with the rise in U.S. corporate bankruptcies, restructuring has seen predictable growth. Yet, it hasn’t reached the spikes typically associated with significant economic downturns.

IP

With courts clearing the backlog of patent litigations from the pandemic period, there’s a surge in hiring patent litigation associates.

Litigation

Litigation, typically less affected by corporate activity slowdowns, has seen consistent demand, especially in areas like consumer protection and public nuisance state attorney general actions.

Corporate and Transactional Practice Areas Experiencing a Rebound

Despite the setbacks in the past year, corporate transactional sectors are witnessing a revival in hiring. Recent data on M&A activity showcases this trend. As more economists predict an upbeat trajectory for the upcoming quarters and with recent firm hiring patterns, optimism surrounds the prospective increase in associate recruitment as we move through 2023 and into 2024.

If you’re seeking insights into the lateral attorney hiring market or considering a move in this dynamic environment, don’t navigate these waters alone. Contact our Managing Director in the Chicago office, Jesse Hyde, for expert guidance and dedicated support. The Lateral Link team is here to assist you every step of the way, ensuring you have the resources and opportunities tailored to your professional aspirations.

Charting Your Course: An In-Depth Resource for Law Students Navigating Multiple Job Offers

Embarking on the journey of a law student entails numerous critical choices, of which, selecting among multiple summer associate or first-year associate propositions stands paramount. At Lateral Link, we appreciate the significance of this decision. Our crew of seasoned legal talent finders, many of whom have trodden the path of summer associates themselves, impart a profound knowledge base and guidance, empowering you to make an enlightened choice.

Assessing Law Firm Offers Beyond the Facade of Rankings

Though rankings may shed some light on a firm’s accomplishments, they can inadvertently offer a skewed perspective. Abby Gordon, co-director of our Northeast associate recruitment division and a past summer associate and associate at Cleary Gottlieb, articulates this concept as, “Choosing a firm transcends mere rankings. While the prestige of your first firm undeniably paves the way for future career opportunities, there is more to it. It equally revolves around identifying the perfect alignment for your ambitions, interests, and ethical values.” Scrutinizing a firm’s work environment, stability, and resonance with your career aspirations is indispensable. For further insights on firm selection, refer to Abby’s counsel in a past ATL piece.

Holistic Evaluation of Influencing Variables

“Approach your opportunities with a comprehensive perspective, taking into account your immediate and long-term personal and professional objectives,” recommends Matt Bennett, a California-based Lateral Link recruiter, USC Gould School of Law graduate, and previous summer associate at Snell & Wilmer. “I consistently encourage candidates to strategize their thinking, to not just fixate on whether they fancy a firm’s current practice, and this mindset can be immensely beneficial to newly minted attorneys fresh from law school. Delve into the firm’s culture, geographical presence, practice domains, mentorship programs, benefits, work-life equilibrium, partnership prospects, hourly obligations, remuneration, and incentives. Consider the professional relationships that you can cultivate in the firm and their potential trajectory. These are critical considerations, especially when you are just initiating your legal career and lack the foresight that experience gifts. Extend your thinking beyond macro-level professional objectives: contemplate how the attributes of a firm might facilitate your short and long-term personal and lifestyle objectives. Endeavor to envision your evolving work and life aspirations as time progresses,” Bennett elaborates. Scrutinize whether the firm champions diversity, nurtures a collegial atmosphere, and offers pro bono opportunities, particularly if these aspects are valuable to you.

Tailored Guidance from Lateral Link Recruiters

Our recruiters understand the intricacies involved in choosing between multiple offers. “Lateral Link’s team consists of past attorneys and law firm recruiters. We can offer personalized advice drawn from our market knowledge, firm-specific intel, and industry connections,” shares Amy Langan, Manager of Professional Development & Law School Relations. To encourage a comprehensive dialogue about your career trajectory, Lateral Link extends a complimentary 15-minute discussion to address law students’ queries and offer direction.

The Impact of Your First Law Firm

Your inaugural law firm can exert a substantial impact on your legal career’s trajectory. To demonstrate this, Gloria Cannon, our Managing Principal, recites her experience from her law school OCI tenure:

“After deliberating offers from numerous Am Law 200 firms, I chose to spend my 2L summer at Milbank’s LA office, where I was exposed to corporate, real estate, litigation, and bankruptcy/financial restructuring practices. After my law school graduation, I joined Milbank’s financial restructuring team due to its esteemed reputation, cordial culture, and the size of the group, which allowed me to swiftly take on significant responsibilities with extensive client interactions.

One of our primary clients was Oaktree Capital Management, a distinguished Los Angeles-based asset management firm, for whom I executed a considerable amount of work. Consequently, during my 5th year, Oaktree’s General Counsel directly invited me to join their in-house legal team. I wouldn’t have encountered this fantastic in-house opportunity had I not been a summer associate at Milbank.”

This anecdote underlines the delicate dynamics involved in deciding between multiple offers – the decision transcends the work type and encapsulates firm culture, training, and long-term career opportunities.

Deciding on Your Legal Career’s Initial Steps

The decision should reflect your career ambitions, personal values, and lifestyle preferences. While mentors, professors, and recruiters can extend guidance, the ultimate decision rests with you. “Refrain from focusing on prestige or peer choices. Prioritize the decision that best aligns with your future goals. Apart from the numerous variables to consider, trust your intuition when assessing firms and the lawyers you have interacted with during interviews or over the summer,” advises Langan, a former recruiter for multiple Am Law 200 firms.

Perceiving the Broader Career Landscape

The path to a triumphant legal career comprises diverse opportunities. Each decision you make contributes to your comprehensive career evolution. While the choice of your first firm is unquestionably critical, it is merely one of the many vital decisions that will sculpt your legal career.

Lateral Link recruiters are dedicated to assisting law students in navigating multiple offer decisions. We are at your side throughout this journey, ensuring your choices align with your career objectives and personal ethics, enabling you to make the most advantageous choice for your future legal profession.

If you wish to connect with one of our recruiters to discuss your offer options, please contact Amy Langan at alangan@laterallink.com or via LinkedIn.