Which Biglaw Practices Did Well In The Third Quarter?
Why don't we start looking at the market from a lateral reshuffling point of view?
Ed. note: This is the latest installment in a series of posts Lateral Link’s team of expert contributors. Michael Allen is Managing Principal at Lateral Link, focusing exclusively on partner placements with Am Law 200 clients.
As the legal market rebounds, we are seeing an increasing demand for lateral attorneys in most practice areas. Four practices in particular stand out: real estate, corporate M&A, IP litigation, and private equity. These practices are one of the few that have increased their headcount over the least year and/or have been ahead of the pack in lateral reshufflings…
Over the last year, the number of IP attorneys in Biglaw has remained almost identical. At the close of 2013, there were 9,399 IP attorneys in the U.S. at Am Law 200 firms. As of last quarter, there were 9,425, an insignificant .2% increase. At the same time, the number of lateral moves from 2013 to 2014 have increased. This means there is a constant reshuffling of a limited high caliber candidate pool. Even with two months left in the year, the number of IP attorneys lateralling is only one fewer than last year (721 to 722).
According to Lex Machina, 2014 was a record year for ANDA suits, with 139 new cases filed in the second quarter of 2014. This is over twice as many filed as were filed two quarters earlier (67). Overall, the common generic v. branded lawsuit arena is up creating an increased demand for work in that practice. Unsurprisingly, the number of attorneys with a pharmaceutical specialty has risen in all major markets. In Los Angeles, the number of pharmaceutical attorneys is up 25%, in Washington D.C. and Chicago, it’s up nearly 15%, and in New York it’s up 11%.
In the Bay Area, the M&A market is booming. From the past year, the pool of M&A attorneys in the Am Law 200 has grown by 14%, from 462 to 528. The practice also grew in every other major market highlighted by significant growth in Palo Alto (10%), Minneapolis (27%), Austin (11%), and D.C. (12%). Data from the IMAA corroborates this growth with increased M&A total valuation (and a similar number of mergers) from 2013 to 2014 (expected).
In our proprietary job board, we have over 800 listings for M&A positions that have been offered since January, which is over a 50% increase from the same period last year. All the data concurs in unison that M&A is a thriving practice.
Similarly, the number of private equity attorneys in Am Law 200 firms is growing in every major market and by more than 10% in San Francisco, Philadelphia, Dallas, D.C., and Boston. New York realized a healthy bump in PE attorneys over the last year, growing from 2,076 in 2013, to 2,274 this year.
San Francisco is an interesting counterpoint to the M&A heavy Palo Alto. Google, Cisco, and other former “start ups” have matured into tech behemoths focusing on strategic M&A deals while the private equity money has been increasingly focusing on the SoMa tech market space.
The real estate market is hot again, driving demand for CMBS, RMBS, REIT capital markets, and all those ancillary services dependent on a robust real estate market. The only issue is that many former real estate attorneys re-tooled or left to go in-house, so there is a lack of experienced talent pool to fulfill demand. We have seen several clients looking to re-tool corporate attorneys into real estate attorneys given the scarcity and money left on the table by not being able to leverage up deals. Over the past year the number of real estate attorneys has significantly increased, especially in Chicago (19%), Atlanta (14%), D.C. (15%), New York (11%), and Dallas (10%). Lateral moves by real estate partners have increased 100% (with two months left in the year) from a low of 50 in 2008.
Most practices are on track to eclipse the number of lateral moves from the previous year. IP partners have already matched last year’s total and litigation, real estate and banking partners have already passed last year’s threshold.
With two months left in the year, nearly every practice is up for associate lateral moves as well, especially in corporate (13%), banking (32%), and real estate (14%).
The hardest hit practices are bankruptcy, a typically countercyclical practice (-16%), environmental (-28%), and labor & employment (-21%).
All in all, we should start looking at the market from a lateral reshuffling point of view as opposed to a lateral placement, since the average tenure for associates and partners is around 3.5 years.
Lateral Link is one of the top-rated international legal recruiting firms. With over 14 offices world-wide, Lateral Link specializes in placing attorneys at the most prestigious law firms in the world. Managed by former practicing attorneys from top law schools, Lateral Link has a tradition of hiring lawyers to execute the lateral leaps of practicing attorneys. Click ::here:: to find out more about us.
