Special Report: The Road Ahead for Big Law

By Staff, The American Lawyer

It was a year of roiling change for Big Law. Here are eight big developments from 2016 and what they might mean for 2017:  

6. A Surge in Lateral Hiring 

The news: The market for lateral hires is as active as ever, legal recruiters say, but potential laterals and the firms they're talking to are scrutinizing each other more closely.

The details: There's no sign that the record-breaking lateral hiring big law firms engaged in last year, when ALM's Legal Intelligence tracked 2,890 moves, has slowed in 2016, legal recruiters say. But law firms won't hire just anyone.

"There's never been more lateral demand for prominent business-generating partners," says Scott Yaccarino, a partner with the recruiting firm Empire Search Partners.

In New York, lawyers with M&A, fund formation, real estate and emerging companies practices were particularly hot commodities, according to Yaccarino. A steady stream of lawyers migrated from the big East Coast firms to California, where there's a high demand for New York-trained asso¬ciates, he adds. And in Washington, D.C., privacy, white-collar and securities enforcement practices looked for talent coming out of government as President Barack Obama's final term comes to an end.

In New York, lawyers with M&A, fund formation, real estate and emerging companies practices were particularly hot commodities, according to Yaccarino. A steady stream of lawyers migrated from the big East Coast firms to California, where there's a high demand for New York-trained associates, he adds. And in Washington, D.C., privacy, white-collar and securities enforcement practices looked for talent coming out of government as President Barack Obama's final term comes to an end.

Firm leaders are acting carefully, though. Increasingly, they want to know about potential hires' book of business and how much they bill before they even speak, says legal recruiter Adam Weiss.

Why this matters: The lateral frenzy underscores the fact that a main growth strategy for firms continues to be taking market share from competitors via productive laterals.

But they're also trying to reduce the risk that laterals won't work out. A study by ALM Intelligence and Group Dewey Consulting found that 30 percent of laterals delivered less than half their promised book of business. So firms are using research and analytical tools to assess laterals.

"While the legal industry has seen growth since the downturn of 2008, the recruitment process remains impacted by this watershed event," says Sheri Michaels, a partner at the legal recruiting firm Major, Lindsey & Africa. "Law firm economics weigh heavily into decisions to move forward with a partner [or] group."

What it means for 2017 and beyond: Big changes such as adjustments to compensation systems, merger talks and financial instability have the potential to send more partners on the move. "There's a lot of movement in the market right now," Yaccarino says. —Nell Gluckman



Read more of this article at The American Lawyer.

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