As we become further and further distanced from the recession of 2008 and 2009, the market seems to be settling into a new equilibrium state that has seen a modest uptick in the demand for legal services and a sharp rise in the volume of lateral moves since 2009.
My own stomping ground, Chicago, is no exception. From 2009 to today, the Windy City has seen a significant increase in lateral moves:
The past five years have seen lateral moves rise from a low of 197 in 2009 to a high of 456 in 2012. If past trends hold steady, we can expect to see between 141 and 160 more lateral moves by the end of the year, bringing Chicago’s total to a five-year high of 498 ± 9 lateral moves.
Interestingly, most lateral acquisitions are being facilitated not by the powerhouse Chicago firms, such as Baker & McKenzie, Mayer Brown or Sidley Austin, but by national firms looking to increase their footing in Chicago. Akerman began bolstering their new Chicago office by bringing in fourteen partners and seven associates.
Proportionately, the fastest-growing firms over the last eight months were Akerman (just opened), Dinsmore (through a merger with Peck Shaffer & Williams), BakerHostetler (opened in 2009), and Clark Hill (by 22%).
Unsurprisingly, the most recent round of lateral moves was dominated by corporate and litigation attorneys. The ratio of corporate attorneys in this subset of lateral moves was higher than the total Chicago proportion by 7%. Litigation was on par with its overall proportion. IP laterals were also proportionally higher than the national average by 3%.
Biglaw “retention” in Chicago (the number of attorneys who stay in Biglaw when they leave a firm) is about on par with the national average, but interestingly, Biglaw associates are having a harder time finding Biglaw work compared to their national counterparts. In Chicago, associate “retention” is 5% lower than the national average. However, partner retention is slightly above the national average, by 3%.
This year’s slight increase in lateral moves is backed by the Beige Book report, which notes an incremental increase in demand for legal services as well as general economic growth for the Chicago region. Commercial real estate activity, for example, rose, which should bode well for Chicago’s healthy real estate practice.
The good news for newly minted graduates of Chicago law schools is that only 11% of them are unemployed, based on Chicago Daily Law Bulletin data. Unsurprisingly, University of Chicago and Northwestern Law graduates fared the best in the market, with Southern Illinois Law School rounding out the top three. Every other Chicago-based law school funneled graduates into jobs at a higher rate than the national average, but all too many remain underemployed.