Ed. note: This is the newest installment in a series of posts on partner issues from Lateral Link’s team of expert contributors.
The lateral law firm partner market stateside and abroad has maintained a steady pace consistent with the last several years of partner movement.
According to ALM data, almost 2,000 lateral partners have transitioned from one law firm to another law firm in this 2012 fiscal year alone. Given that partner moves take time because of the complexity in the partner hiring process, certainly many of the conversations leading to these 2012 transitions started back in 2011.
Regardless of when the conversations initiated, we are seeing a steady pace in 2012 consistent with prior years for the appetite for hiring lateral partners.
So, what does it mean?
First, however, let’s note that around 13 percent of these lateral partners came from Dewey’s downfall, so the numbers may seem a bit inflated without adjusting for this one-off.
Out of the nearly 2,000 lateral partner moves in 2012, it is not surprising that around 20 percent of them are corporate and securities partners; roughly 15 percent are litigation partners; 10 percent are IP partners; and 10 percent are banking and finance partners. However, we are seeing a surprising activity level in the real estate partner market. Almost 10 percent of 2012 partner moves consisted of real estate partners. Many firms are still rebuilding their depleted real estate bench from the 2009 recession as well as addressing an area where firms let attrition run its course without making up for it by rehiring lateral partners who have hit mandatory retirement ages.
Interestingly enough, a few of the firms with the biggest appetites also have the biggest losses. For example, in 2011, DLA Piper was ranked number one in partner hires and #3 in partner losses. In 2012, according to ALM data, DLA Piper has hired 71 lateral partners while losing 41 partners to other law firms.
We have seen firsthand the common diet our law firm clients have for partners who will bring business with them. Since a partner with business usually is in the driver seat, depending on bill rates, conflicts, pedigree, expertise, vintage, just to name a few common ingredients, firms are increasingly competing for a fixed supply of partners. In other words, the demand exceeds the supply, and the career path for partners is more dependent on continued reallocation of the same stock every handful of years rather than through promotion and advancement within the firm.
This post was brought to you by Michael Allen, Managing Principal of Lateral Link. If you’re interested in making a career transition, please contact one of the recruiters in your region to discuss the legal market, your practice and the next step in your legal career.