At Kinney Recruiting we like to collect and use data to help people make informed decisions. Now that we’re almost half-way through 2015, we wanted to take a look back at what we saw in 2014 so we could give some thoughts on what the rest of 2015 will hold for those looking at potential lateral moves in the Chicago market. As always, we reserve a fair amount of our data for our clients and candidates, so if you any questions about the information below, please get in touch – .
Over the course of the last five years (2010 through 2014), lateral partner moves in Chicago have predominantly come in three major practice areas: Corporate, Intellectual Property and Litigation. The latter category leads the way in total number of moves, 56, but moves in IP practices saw the biggest percentage increase. Partnership movement increased in all three areas from 2013 to 2014. The number of Litigation partner lateral hires has grown each year since 2010 and in 2014 there was a 14% jump from 2013. Corporate partner lateral moves were up 23% in 2014 and the IP partner moves were up 56% from 2013. A couple of other areas worthy of note because of increased velocity were in Labor & Employment and Government. There was a 100% increase in L&E Partner lateral hires and a 200% increase in Government partner lateral hires.
The same three areas of law that dominated the partnership lateral hires were similarly active for associate moves. In all three areas there was positive growth in the five year period from 2010-2014. But despite an increase in lateral hiring of partners from 2013 to 2014, the trend was actually reversed for associates. In this time frame, Corporate laterals dropped the most with a 62% decrease in hires. Lateral litigation associate hires dropped 38% and IP dropped 13%. Despite the large increase in partnership laterals in Labor & Employment from 2013 to 2014, there was a dip of 29% for the associates. Areas such as Bankruptcy-Corporate Restructuring and Healthcare stayed even for the year and there was an increase for ERISA/Employee Benefits laterals.
So what does this all mean?
In 2011, the New York Times reported that Illinois would have 1394 new legal job openings annually from 2010-2015. In this report, it showed that in 2009, 3073 attorneys passed the Illinois Bar and 2166 students completed law school. So there was a surplus of 1679 attorneys in Illinois at the time. [1] So when we saw the growing trend of lateral hires in 2012 and 2013, this large attorney pool consisted of 3rd and 4th year associates who were primed to move, and they did just that. They were at the peak of the bell curve for lateral hiring.
With that being the case, the drop off for laterals in 2014 was not surprising if you take this information, along with the fact that in 2013 there was a 30 year low for law school applications[2], a larger trend that has been tracked since around 2011. It’s also not surprising that the partnership laterals have increased. We’ve seen an increase with clients who have had senior partners retiring, while at the same time trying to diversify their firm to include more distinct practices, especially with transactional work. So there is an associated need for partners to bolster newer practice areas and others to fill positions vacated by senior partners that have retired.
Overall, there is good news for the rest of 2015. The Bureau of Labor Statistics reports an expected 10% increase in legal jobs through 2022, not that we trust their statistics completely but they are not completely wrong – the trend is correct. We anticipate that law firms will continue to diversify and that firm mergers / combinations will create opportunities in the lateral market, especially in the Corporate M&A areas. Another trend that is positive is that Chicago is showing an increase of people moving to the city, with record highs in 2014 for the months May-August.[3] This should portend economic growth, and likely increase firms’ growth to deal with new business opportunities. While we anticipate litigation lateral moves will be the most active Chicago market segment in 2015 for both partners and associates, it seems likely the percentage increase will drop and start to flatten completely as more firms expand and diversity into different practices.
[1] http://economix.blogs.nytimes.com/2011/06/27/the-lawyer-surplus-state-by-state/?_r=0
