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For second year in a row, law firms pull back on lateral hiring of lawyers

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For second year in a row, law firms pull back on lateral hiring of lawyers

Law firms continue to cut back lateral hiring of lawyers following the talent wars of 2021, according to a report by the National Association for Law Placement. (Image from Shutterstock)

Law firms continue to cut back lateral hiring of lawyers following the talent wars of 2021, according to a report by the National Association for Law Placement.

Lateral hiring by firms declined 35% in 2023 following a decrease of 11.5% the prior year, according to a March 27 press release from the NALP and a NALP Bulletin article.

The median number of lawyers hired was 4.0 in 2023, and the average was 9.3 per office or firm, the lowest numbers since 2010.

As the market cooled, there was also a decline in the number of lateral hires allowed to work remotely outside firms’ geographic areas. For lateral partners, the percentage allowed to work remotely was 12%, down from 16.1% in 2022. For associates, the remote percentage was 13.6%, down from 19.3% in 2022.

Lateral hiring is down more for associates than partners. Associate lateral hiring decreased nearly 43% in 2023, following a decline of 20% in 2022. Although associate lateral hiring declined among all sizes of firms, it was most pronounced in firms with more than 1,000 lawyers. In those firms, associate lateral hiring decreased 51%.

Partner lateral hiring only decreased 10% in 2023 after a slight increase of 5.5% in 2022. The decline was due to a 19.1% decline in hiring at firms with 501 to 700 lawyers and a 19.9% decline with firms of more than 1,000 lawyers. At firms of other sizes, lateral hiring of partners increased.

The NALP analysis is based on more than 4,400 lateral hires at 479 firms and offices. Firms were encouraged to report hiring based on individual offices, but some of the data includes firmwide hiring.

Nikia Gray, executive director of the NALP, noted NALP research showing that firms are also making fewer offers for summer associate programs.

The research on summer offers and lower lateral hiring “strongly suggests that law firms are projecting lower client demand over the next few years and readjusting their talent growth strategies as a result,” Gray said in the press release.

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