The legal landscape is continuously evolving, and Lateral Link’s extensive research into the trends and shifts in the United States’ legal market offers valuable insights. As we explore these findings, we’ll discuss the implications for both law firms and individual attorneys while highlighting specific firms that have been active in the lateral market.
Talent Wars: The Surge in Partner Hires
Between 2021, and the end of 2022, Am Law 200 firms made waves by hiring over 3,600 new partners. These talent wars at the partner and associate levels were the talk of 2022, but the origin of these new partners captured even more interest. For example, Latham & Watkins, and Kirkland & Ellis have been particularly active in recruiting lateral hires, reflecting a broader trend of expansion and increased competition for top talent. Across the Am Law 200, nearly 30% of all partner additions came from unranked firms, while just 12% came from Am Law’s Second Hundred firms.
Interestingly, Tier 1 Am Law firms (firms ranked 1-50 in the 2022 Am Law 200) primarily sourced new partner hires from Am Law 100 firms (59%). For instance, Paul Weiss and Skadden have strengthened their presence in the New York market, while Cooley and Morrison & Foerster have been active in expanding their teams in California. These top-tier firms added more new partners from unranked firms (11%) than from Am Law Second Hundred firms (9%).
Geographical Insights and Gender Dynamics
New York, Washington, D.C., and London remained the most active markets for partner hires. However, the percentage of Am Law 200 partner hires in emerging legal hubs such as Salt Lake City, Nashville, and Austin exceeded 10% of all Am Law 200 partners in each market, indicating growth in these regions. Firms like DLA Piper and Baker McKenzie have made significant hires in the Corporate sector, while Wilson Sonsini and Fish & Richardson have bolstered their Intellectual Property practices.
In terms of gender dynamics, men accounted for seven out of every ten partner hires. Notably, 78% of all women partner hires were made by Am Law 100 firms, demonstrating a potential focus on diversity and inclusion within these top-tier organizations.
Report Breakdown: Hiring Metrics
The report provides a detailed breakdown of hiring practices based on Am Law ranking tiers, Revenue Per Lawyer (RPL), Profit Per Equity Partner (PEP), and gender-based metrics. By examining these hiring trends, law firms can gain valuable insights into the competitive landscape and make strategic decisions to strengthen their market presence and service offerings.
Implications for Law Firms and Attorneys
The data from Lateral Link’s research has several implications for law firms and attorneys.
Strategic growth and competition: The increase in lateral moves highlights the need for law firms to plan strategically to remain competitive. By expanding their practice areas and market presence, firms can better position themselves in the evolving legal landscape.
Talent acquisition and retention: As competition for top talent intensifies, law firms need to prioritize both talent acquisition and retention. This can be achieved through competitive compensation packages, flexible work arrangements, and professional development opportunities.
The importance of diversity and inclusion: With an increased focus on hiring, law firms must also prioritize diversity and inclusion initiatives to attract and retain a diverse pool of attorneys.
Emerging legal markets: As the legal industry continues to grow and change, law firms must keep an eye on emerging markets such as Salt Lake City, Nashville, and Austin, and adapt their strategies to capitalize on new opportunities in these regions.
Navigating attorney lateral moves and understanding the key trends impacting law firms and legal professionals today are essential for success in the ever-changing legal landscape. By recognizing growth in specific practice areas, geographical hotspots, and the increasing demand for in-house and government roles, law firms and attorneys can adapt and thrive in the evolving market.
Embracing technology and innovation: Law firms need to keep up with advancements in technology and leverage innovative solutions to streamline operations, enhance client services, and stay ahead of the competition. Firms like Orrick and Reed Smith have been particularly proactive in incorporating technology and innovation in their practices.
Cross-border opportunities: With globalization and the expansion of multinational businesses, law firms must focus on cross-border transactions and disputes, and develop a diverse team with the ability to work seamlessly across jurisdictions. Firms like White & Case and Baker McKenzie have established themselves as global players by expanding their cross-border capabilities.
Focus on client needs: As clients’ needs become increasingly complex and specialized, law firms must develop niche practice areas and expertise to cater to these demands. For example, Winston & Strawn have developed a strong expertise in antitrust and sports law, while Ropes & Gray have made a name for themselves in private equity and asset management.
Collaborative culture: Creating a culture of collaboration and knowledge-sharing is crucial for law firms to foster innovation and deliver better results for clients. Firms like Goodwin Procter and Hogan Lovells have embraced a collaborative approach, enabling them to provide comprehensive solutions to clients across various industries.
Succession planning: Law firms must have a long-term vision and plan for the future, including effective succession planning and leadership development. By grooming the next generation of leaders, firms like Cravath, Swaine & Moore, and Sullivan & Cromwell can ensure a smooth transition and continued growth.
Understanding the key trends and adapting to the dynamic legal landscape is crucial for law firms and legal professionals to remain competitive and successful. By being proactive in their approach to talent acquisition, retention, diversity, inclusion, and strategic growth, law firms can rise to the challenges and capitalize on the opportunities that lie ahead in the ever-evolving legal market. As you navigate these challenges and opportunities, Lateral Link is here to guide you through your journey, offering expert advice and professional support to help you make the best decisions for your career and practice. With a deep understanding of the industry’s complexities and trends, Lateral Link is your trusted partner in shaping your future in the legal profession.