Junior associates who weathered the worst of the recession are seeing a break in the clouds. Although the overall rate of lateral attorney hiring in 2014 is roughly on pace with — if not a little behind — last year, the market for junior associates has skyrocketed. According to some reports, the hiring of associates with between 1-3 years’ experience increased by 180% compared to the same period last year. Curiously, while the market for junior associates grew, the market for more senior associates (4-6 years experience) fell 17.6%.
This is not simply a case of fleet-footed Millennials creating new demand. Using Lateral Link’s state-of-the-art job database (which is free to all members), the search firm has tracked aggregate firm demand (as demonstrated by public job postings as well as non-public exclusive searches) for associates, partners, counsels, and in-house attorneys by experience, practice area, region, and other criteria. The tracking showed that searches for junior associates have increased by 50%…
Given the reported hand-wringing by some clients about training junior associates on their dime, the increased demand for junior associates is surprising but nonetheless consistent with the overall improved demand projected by Citi Private Bank, a leading provider of financial services to leading law firms.
According to some reports, 80% of Am Law 200 firms have laterally grown in the last five months through associate hiring alone, some by as much as 5%.
Among the firms hiring in the first five months was Lewis Brisbois, which added 39 net associates in the first five months of the year, including 27 litigation associates. Other firms picking up new associates included Hogan Lovells, (net 28 associates), Wilson Sonsini (net 24 associates), Perkins Coie (net 24 associates), and Littler (net 21 associates).
With respect to region, the legal market has grown in most cities. However, Andrew Godwin, lead analyst of Citi Private Bank’s Law Firm Group, noted in the Am Law Daily that although the overall results from the first quarter indicated positive momentum for the legal services industry as a whole, a closer look at the results showed that Am Law 1-50 firms drove much of the growth, and they continue to pull away from the rest of the pack. Looking at the industry results by geographic reach, firms with a greater international presence outperformed other segments in revenue, demand, and lawyer rate growth in first-quarter 2014.
Law firm mergers continued in 2014 at a rapid pace. With 22 mergers in the first quarter, 2014 recorded the second highest number of mergers, falling just short of the 25 in 2009 Q1. However, the second quarter appears to have slowed; only eight firms have merged so far, 2.4 mergers behind last year’s second quarter pace. The eight Am Law 200 firms that merged in the second quarter included Dentons, Wilson Elser, Holland & Hart, Sutherland Asbill, and Buchanan Ingersoll. Most of these acquisitions were minor, but Buchanan Ingersoll picked up a strong Florida firm, Fowler White Boggs, whose 90 attorneys should propel them into the top half of the Am Law 200.
The legal market is indeed still a mixed bag, but there are signs that firms are easing their circumspect attitude towards lateral hiring as they push for expansion and as their books recover from the economic downturn. With a limited dataset, the 2014 lateral market will most likely be on par with 2013.