Lateral recruiting has overtaken homegrown talent as the principal source of talent for partner promotions. Here's the latest from market data on lateral recruiting.
Making a lateral move is a catalyst in your career progression, we learned at NALP’s April Annual Education Conference. As the above visual shows, partners who lateralled into their firm as associates are much more likely to make partner today than a decade or so ago, when homegrown talent had the edge. (Data credit: Leopard Solutions)
‘The midlevel associate is a prized asset for a firm.’
Lateral recruiting grew by 14% in 2024, according to the NALP Foundation. This is promising news for you, the attorney, that your skills are in increased demand – whether you stay at your firm or move. In fact, this follows a decade-long trend of the market’s swing towards lateral recruitment. Firms are increasingly staffing with talent from lateral hiring and reducing the numbers they take from law school, although this trend is only gradual. As business becomes more complex and technology does a better job of the grunt work, a more experienced legal brain is what firms need most to deliver value to their clients. So the midlevel associate is a prized asset for a firm, capable of billing and producing high quality work with less need for coaching.
Since the days of the pandemic triggering feverish recruitment in 2021, along with those eye-watering signing bonuses, the market has steadied, but lateral recruiting is still holding its dominant position over law school hiring.
Lateral recruitment has been the default hiring strategy for law firm expansion too. Where there are hot commercial markets – often driven by tech industry growth as in California, Texas or Colorado – firms have opened offices, either speculatively or following a client. Even some of the British magic circle firms have dared to open up in California, relying heavily on sourcing talent laterally.
With lateral moves increasingly becoming the precursor to partner promotion, the market has come to view it as a norm in your career. Four in every five associates leave their firms within the first 5 years, according to the NALP Foundation. Legal industry analytics firm Decipher found that, on average, a law firm churns 100% of its staff in 7 years.
Attorney attrition rates at firms in 2024 was 20%, says the NALP Foundation, which has steadied out since 2021 when it was at 26%. However, smaller firms are experiencing their highest attrition on record, at 31%. Meanwhile, we learn from Leopard Solutions this year that headcount growth is driven predominantly by the larger firms – a longer-term trend.
‘Lateral recruiting has been the default hiring strategy for law firm expansion.’
For as long as the market has tracked it, we’ve seen demographic identities diverge on how long they will stay at their law firm. Lived experiences from one identity to the next are never equal. In 2024, ethnicity remained the biggest differentiator in retention, according to the NALP Foundation: associates of color left at a rate of 24%, while White associates were at 19%.
Each individual has their own personal reasons for wanting a change, and those reasons do shift by demographics too. But across all US attorneys, those reasons remain universal and somewhat timeless: they want better working cultures, better training, clearer career progression, and most of all: better work-life balance. Learn more about the deal of attorney life here.
Strain on work-life balance is one major reason attorneys give for wanting to move in-house, which is a steadily growing industry. Law firms are enhancing benefits packages to compete better with in-house, making both the lifestyle trade-off and salary difference more stark, say Leopard Solutions.
Most hiring happens in Q3 (40%) and Q4 (35%), we learnt from the NALP Foundation, so expect to hear more from search firms in advance of this.
Attorneys told the market that over the course of a decade they have lost interest in actively seeking a new role. So when lateral hiring has increased, what’s happening? The missing piece of the puzzle is a more proactive, persuasive search firm industry. Today, search firms handle 42% of lateral moves in the US (NALP Foundation).
In 2024 we saw an increase in hiring for litigation. Typically, corporate and litigation duke it out for the top spot in headcount, so this swing implies we’re living in a more disruptive age than the industry is used to.
Further reading: How to Become a Law Firm Partner
