Lateral hiring — the luring away of lawyers and even top partners to other firms, seen as a growth strategy for those firms — has become a consistent and accepted part of the legal landscape. Indeed, the Altman Weil Law Firms in Transition Survey for 2017 showed that more than 95% of law firms saw adding laterals as a growth strategy.
However, new data from Leopard Solutions, a research firm that focuses attorney recruiting, shows that the lateral craze may be abating.
In a new white paper, Leopard Solutions notes that lateral hiring has dropped 8% in the first half of this year, compared to the same period in 2016. The drop could mean that final year totals for 2017 would be less than last year’s numbers, which would represent the first drop in lateral hiring since 2013, when the growth trend really began.
In all, a total number of 4,229 lateral moves were recording in the first half of 2017 (through the end of June), compared to the same period in 2016 when 4,598 lateral hires were noted, according to the Leopard Solutions white paper.
The number of lateral hires may have peaked in 2016 after climbing nearly 30% in just three years, according to data from Leopard Solutions. In 2016, there were a total of 8,616 lateral moves, compared to 6,638 in 2013. If the number of lateral hires for the remainder of this year remain on pace with the first half, Leopard Solutions projects there will be a total of 8,458 lateral moves this year.
A quarterly breakdown of the data in the white paper shows the second quarter this year with 2,092 lateral moves, a pace that was slightly less than in the first quarter, meaning the slow-down trend could be continuing.
Interestingly, much of the drop in lateral moves in the first half of this year could be attributed to the fewer number of associates that are on the move compared to previous years. There were 2,465 associates making lateral moves in the first half of this year, compared to 2,731 for the same period in 2016, representing an 9.7% decrease, according to Leopard Solutions data.
Similarly, partners and counsel making lateral moves so far in 2017 also dropped, compared to the first half of 2016. Through the first half of this year, the number of partners making lateral moves dropped 7.6% and the number of counsel making lateral moves dropped 2%, compared to the first half of 2016, according to the data.
What’s Behind the Drop-off in Lateral Moves?
In its white paper, Leopard Solutions speculated on several reasons why lateral moves could be slacking off. One possibility they suggested was that 2015 through 2016 might have represented peak years of the trend, with this year beginnings a slight pull-back. In fact, the white paper suggests that this year could represent a stabilization in the number of lateral hires made by top U.S. law firms.
Another possibility is that law firms may be waking up to the idea that lateral hiring may not be the magic pill they once envisioned. The Altman Weil survey referenced above also notes that “more than half of laterals do not meet expectations in terms of business brought in and/or personal productivity.”
It also could be that law firms are getting more skeptical of the lateral hiring trend and approaching potential hires more cautiously, assessing those potential new hires more closely and even setting up performance milestones once they’re hired.
Click here to download a copy of Leopard Solutions’ white paper on lateral hiring.