Competition for legal talent at Am Law 200 firms is increasingly fierce, with more lateral partner moves in 2016 than any year since 2009. But the profile of those laterals is starting to change, with some top firms hiring not for books of business, but for the prestige they hope their new partners will bring. Between Oct. 1, 2015, and Sept. 30, 2016, 2,915 partners made a move, almost 1 percent more moves than in the prior year, according to the annual lateral survey conducted by ALM Intelligence (ALI).
In an era when capturing new revenue is increasingly competitive, firms hiring for reputation over portable business are making a bet on the cachet these new hires will add to core practice areas. And they are placing those bets on talent from firms whose partner ranks used to be untouchable.
Some elite Wall Street firms lost partners to their rivals last year, something that recruiters say is not new but is happening more often. "Firms at the very highest rungs of the ladder are becoming more bold about finding what they need from their peers," says Jeffrey Lowe, global practice leader for law firm practice at legal recruiter Major, Lindsey & Africa. He says that his company sees no signs of that trend abating.
While ALI doesn't track associate moves, recruiters say associate hiring has been active. Frequent partner defections destabilize practice groups, leaving some associates feeling unmoored, says Sarah Van Steenburg, managing director of Major Lindsey & Africa's associate practice group. "With millennials, it's more about relationships," she says. "If they're being treated well and feeling valued, they'll stay."
More significant than firm-to-firm defections are associates' moves to in-house positions, which are happening earlier in associates' careers, Van Steenburg says. Many associates are not interested in making partner, she says, so moving in-house and shedding the pressure of the billable hour can be appealing. Meanwhile, the smaller class sizes from four, five and six years ago means that there are now simply fewer midlevel associates who are experienced, but don't charge the rates of a newly minted partner or counsel.