Lateral Partner Hiring Surges at Elite Law Firms

The legal industry has witnessed a remarkable resurgence in lateral partner hiring at top-tier law firms, with the first three quarters of 2024 seeing the highest level of activity in three years, according to a report by recruiting firm Macrae. The report delves into the hiring trends across four major geographic markets, shedding light on the factors driving this surge in lateral partner moves.

Unlocking the Secrets of Lateral Partner Mobility

A Booming Lateral Partner Market

The report by Macrae reveals that the 557 lateral partner moves in Am Law 50 firms and the Magic Circle through September are just shy of the 604 figure reported in the same interval in 2021, and higher than the figures recorded in 2019, 2022, and 2023. This surge in lateral partner hiring underscores the growing demand for experienced legal talent across various practice areas.

Driving Forces Behind the Lateral Hiring Boom

According to Macrae partner Jon Truster, the finance markets have been particularly active this year, fueling a significant increase in lateral hires. The refinancing market has been exceptionally busy, leading to a surge in finance-related lateral moves. Additionally, the growth in private credit and lending has also contributed to the hiring activity in the finance space.

Geographical Insights: Trends Across Key Markets

The report provides a fascinating glimpse into the lateral hiring trends across four major geographic markets: London, New York, the San Francisco Bay Area, and Washington, D.C.In London, the lateral partner moves have well surpassed previous years, with 182 moves through September, compared to 138 in the same interval in 2023 and 124 in 2022. The report suggests that the regulatory and compliance differences between the U.K. and the U.S. may be a contributing factor, particularly in practice areas like intellectual property, where the laws governing IP differ significantly between the two jurisdictions.The San Francisco Bay Area, on the other hand, presents a contrasting picture. The region has seen a much lower number of lateral moves, with only 40 as of the end of September, trailing behind previous years. Truster attributes this to the ongoing slowdown in the tech markets, which continues to impact the legal industry in the Silicon Valley.

Bright Spots in the Bay Area

Despite the overall slowdown in the Bay Area, the report highlights a bright spot in the corporate lateral hiring space. The region has seen 19 corporate-related lateral moves in the first three quarters of 2024, compared to 11 in the same period last year. This suggests that while the tech sector may be experiencing a downturn, the corporate legal landscape in the Bay Area remains active and in demand.

Diversifying Practice Areas: A Shift in Lateral Hiring Patterns

The report also delves into the lateral hiring trends across different practice areas. While finance and corporate have seen significant increases, other areas have also experienced notable growth. For instance, investment funds and asset management have witnessed a rise in lateral hires, with 60 moves in the first three quarters of 2024, compared to 26 in the same period last year.This diversification in lateral hiring patterns underscores the evolving needs of the legal industry, as firms seek to bolster their expertise across a range of practice areas to better serve their clients.