Hot lateral hiring market notches record increase

Following a 30 percent drop in 2020 due in in large part to hiring pauses in the early months of the pandemic, lateral hiring rebounded at an unprecedented rate in 2021, according to analyses of the National Association for Law Placement’s Survey on 2021 Lateral Hiring.

Overall, lateral hiring was up by 111 percent compared to 2020, the largest year-over-year increase since NALP began tracking these data 23 years ago.

While increases were noted across all categories of lawyers, the lateral associate market was particularly hot, increasing by nearly 149 percent in 2021.

As a whole, lateral hiring was up across all firm sizes, regions, and cities included in the survey, although a few markets experienced declines in partner lateral hiring.

NALP’s 2021 analyses cover aggregate hiring information on nearly 7,700 lateral lawyers in 480 offices/firms.

“The fact that the lateral hiring market was red hot in 2021 does not come as a surprise to anyone working in the industry,” said NALP Executive Director James G. Leipold, “but even so it is startling to see these numbers, and it is good to be able to quantify the change in the market that firms have been grappling with this past year.

Leipold said he was surprised to see that the change in lateral associate hiring “was so much greater than the change in lateral partner hiring, though both markets were more than brisk, as NALP members working in the trenches trying to fill vacancies know only too well.

“Lateral lawyer hiring at this level is likely unsustainable over time, and I expect the lateral market to cool a bit in 2022, or at least level off, but for now it remains a volatile and fast-moving market. Coupled with rising associate salaries, it’s a bit of a battlefield out there for mid-level associate talent right now,” concluded Leipold.

Other key findings in the survey included:

• The overall volume of lateral hiring was up 110.9 percent compared with 2020 in these same offices/firms, with a median of 6 and an average of 16 lateral hires per office/firm. Associate lateral hiring was up the most, at 148.5 percent, while partner lateral hiring increased by 42.8 percent.

• The average number of lateral associates hired per office/firm in 2021 was about 11 and the median was 4 compared to an average of approximately 2 and a median of 1 for lateral partner hires. Lateral associate hiring accounted for 69.2 percent of lateral hiring in 2021 and lateral partner hiring accounted for 14.7 percent. Other lateral hiring comprised 16.1 percent of lateral hiring.

• Among offices reporting activity for a single office, offices averaged from 0.8 to 1.4 lateral partner hires depending on firm size, whereas associate lateral hiring averages ranged from 4.4 to 6.8 per office. While overall lateral hiring was up across the board, offices in firms of 251-500 lawyers experienced the largest increase in lateral hiring (137.9 percent), and offices in firms of 250 or fewer lawyers had the smallest increase (79.3 percent).

• On a regional basis, the level of lateral hiring per office was highest in the Northeast, with a median of 10 and an average of 18 lateral hires in 2021. In terms of aggregate volume change, volume was also up the most in the Northeast region (177.5 percent).

• Among cities with at least 10 offices reporting, overall lateral hiring was up the most in Houston (191.4 percent).

• This was the first year in which NALP asked offices about the hiring of any lateral lawyers who were located outside of the firm’s geographic area and were allowed to work remotely without relocating. Overall, 15.3 percent of offices reported hiring lateral partners who did not need to relocate, 22.7 percent reported hiring lateral associates who did not need to relocate, and 23.4 percent reported hiring other lateral lawyers who did not need to relocate.