Report by Michael Ellenhorn and Stephen Rodney, in conjunction with RSG Consulting
Fox Rodney Search produces an annual Strategic Lateral Moves Report which uncovers trends in lateral movements within the legal sector in the US and UK. Our analysis covers regions, market sectors, practice areas and industries. For our 2015 report, we partnered with independent legal research and strategy consultancy RSG Consulting, to broaden our coverage and analysis. A summary of the findings can be found below. To receive a copy of the full report, please email firstname.lastname@example.org
Fox Rodney Search (FRS) is a global legal recruitment boutique, focusing on partner and associate searches and team moves as well as general counsel and head of legal in-house searches.
Summary of Findings
The lateral hiring market in the US was much more active in 2014 than in 2013. The Am Law 100 segment experienced a 74% increase in activity. Although it might initially appear from the data that there was an exodus from the largest 50 firms in the US, the largest proportion (38%) is accounted for by the net loss of partners in the Chicago market. Local commentators suggest that the Chicago market is saturated. Cumulative waves of incoming law firms over the past 10 years, corporate headquarters moving out and consolidation in the financial services sector point to a permanently contracted market for top tier law firms.
Notably, the big 50 were net losers of partners in every city other than Miami and Houston. The recipients of most of the partners from the large firms are the firms in the 51 – 100 and 101 – 150 segments. While the net movement is the same in these two segments, firms in the 51 – 100 saw the most ebb and flow of partners in Chicago.
The busiest market in 2014 was Washington, DC, which just outpaces New York. Many of the moves are government hires by firms wanting to expand their regulatory capabilities. In fact, the largest 50 law firms tended to recruit lawyers in the broader regulatory space, as well as in the energy sector. Houston was also a very busy market, although significantly smaller in the overall number of moves than Washington, DC and New York.
Given the general lack of growth for litigation services, it is unsurprising that this practice area saw the greatest movement of lawyers, followed by corporate and IP. Interestingly, 30% of all lateral-moving litigators made moves to in-house positions, likely reflecting the desire of corporate America to better manage risk and reduce litigation costs.
The lateral hiring data may not give us an indication of whether women are better represented in the marketplace overall, but their movements follow traditional lines: a higher proportion of female partners went into in-house and government positions.
We have begun to answer the age-old question as to the relationship between lateral hiring and financial performance: Does it drive an increase in revenues and profitability? From the data gathered, we cannot say that lateral hiring drives better financial performance. But we can say that poor financial performance is connected to subsequent partner departures.
The London market for lateral hires was much more stable than the US markets. It did not show much change between 2013 and 2014. However, US firms are clearly the largest acquirers of lateral talent in London, with the top 10 UK law firms being the net losers. Although the Magic Circle firms remained relatively immune, those just outside – Herbert Smith Freehills and Ashurst – registered notable losses to US firms. Some of the UK’s oldest national law firms, such as Dentons and Eversheds, also showed the high levels of churn as they seek to internationalize and re-focus their strategies.
Finally, two global law firms (firms with more than 2,000 lawyers) standout as having the largest overall churn in the Transatlantic space – DLA Piper and Jones Day experienced pronounced levels of activity.
To receive a copy of the full report, please email email@example.com