This week we are issuing the first part of a special report on trends in the 2014 lateral hiring market.

While some legal publications assess the state of the legal market health by tracking such metrics as revenue per lawyer and profits per partner, here at Kinney Recruiting we focus on data that illuminates hiring and employment trends among leading U.S. law firms.

This data is an incredibly powerful tool for providing guidance to attorneys and law firms when they are considering making a lateral move. Even for those who are happy with their current practice and have no interest in testing the waters, the insights in this report about overall trends in the legal market should be of interest to practitioners and law firm managers alike. The data clearly show that partner lateral hiring has become an important strategic optionfor the vast majority of big law firms in their pursuit of opportunity and growth.

We’re publishing the report in two parts. This week we’re focusing on lateral hiring trends for partners. Next week we’ll report on trends for associates and of-counsel.

First, a caveat: at Kinney Recruiting we strive to compile all the publicly available information on lateral hires.  The data presented in this report only includes lateral hiring by U.S.-based law firms in major domestic markets, including Atlanta, Austin, Boston, Chicago, Dallas, Houston, Los Angeles, Miami, New York, Northern Virginia, Orange County, Philadelphia, Phoenix, Research Triangle, San Diego, San Francisco, Seattle, Silicon Valley, and Washington.  We gather this data on our own rather than buying it, and we share it with anyone interested in subscribing to our newsletter (sign up at the bottom of this article). Clearly, while there is no such thing as a perfect data set, we believe the numbers reflected in this report are as comprehensive and accurate as are available anywhere.

The sheer volume of lateral partner hiring is not always a sign of economic health. For instance, the collapse of a major firm can easily lead to a surge in lawyers moving to new firms. But the trends indicated by volumes of data are important and, there’s no doubt that 2014 was a great year for the many firms who now measure their overall success by the success of their lateral hiring program. In any event, 2014 was the second most active year on record with 1,376 lateral moves among the ranks of the top 200 law firms nationally (as of December 15). We are witnessing a sustained upswing in the lateral market that cannot be accounted for as resulting from particular phenomena such as the dissolution of a particular firm or firms.

The peak year for lateral partner movement was 2012 when more than 1,400 lateral moves were recorded. The trend over the last five years clearly shows a sharp recovery from the very depressed level recorded in 2010, when most firms were reluctant to commit to lateral hires coming out of the deep recession in 2008-2009. The market’s renewed confidence is particularly evident in each of the last three years, as the level of lateral partner hiringhas held at a level more than twice that of 2010.

Looking beyond general trends into how partners in different practice areas have fared when it comes to lateral hiring, the data reveals some interesting trends, with a few practices performing particularly well and others noticeably lagging.

Litigators enjoyed a banner year in 2014 with 320 partners finding a place on a new law firm masthead. This is not surprising given the fundamental importance of litigation in the Big Law revenue mix but it’s worth noting that, while litigators typically account for around 20 percent of all lateral hires, this figure has inched up to 23 percent.

Partners specializing in governmental work (which includes both lobbying and regulatory-oriented practice) were also in particularly strong demand last year, with more than 90 lateral hires, an increase of more than 55 percent from 2013. Unsurprisingly, the Washington, D.C. market accounted for the bulk of these hires. It would appear that political gridlock, if nothing else, can be a boon to high-end legal practice.

In a related development (i.e., the advent of the ACA), health care specialists also enjoyed strong mobility with more than 46 recorded lateral moves in 2014, an increase of more than 12 percent over the prior year. This increased demand for legal expertise is consistent with all the turmoil and uncertainty currently roiling the health care industry.

2014, the weakest practice areas for partner mobility were bank finance (where lateral hiring dropped by more than 37 percent from 2013) and environmental law (where lateral hiring similarly dropped by more than 55 percent year over year). While the reduction of bank finance hires in 2014 was a surprise to us (this is perspective bias – we moved quite a few of them ourselves), the decline in environmental hiring was not.

The shift of environmental practices from an integral part of natural resources practices to an ancillary/service component of most major firms’ practices has been a long-term development. Notwithstanding this, we had two completed deals last year for environmental partners, both moving from one mid-tier firm to another due primarily to conflicts and corporate platform issues.

Several geographic markets in particular showed peak levels of activity in partner hiring in 2014: Chicago (with 154 partner lateral hires), Los Angeles (136) and Washington (314).

In contrast, lateral partner hiring notably slowed down from 2013 to 2014 in San Francisco, Dallas, and Atlanta.

Perhaps the most revealing aspect of the 2010-2014 partner lateral hire data lies in the broad dispersion of lateral hiring across the universe of large law firms. Twenty-five years ago, almost no law firm hired laterally. We deal with both elated and disappointed law firms just about every week because some partner has accepted or rejected a lateral offer. And when we look at the data for the last five years, it’s apparent to us just how much attitudes have changed.

The vast majority of big law firms now actively pursue lateral partner hiring as an important part of their growth strategy. The bar chart below shows just how widespread the practice has become in recent years, with more than 75 percent of the AmLaw 200 firms having hired 10 or more lateral partners over the five-year period.

Among the cohort of the 200 largest law firms, the average number of partner lateral hires was 31 over the last five years and the median value was 22. Keep in mind that these numbers include 2010 when the market for hiring was more or less moribund, so if anything it understates just how important and widespread partner lateral hiring has become in the market.

Of course there are still some outliers. There were seven firms among the AmLaw 200 resisting the trend and making no partner lateral hires during the period. At the other end of the spectrum, there were three big firms that each brought in more than 150 partners laterally over the course of the last five years. DLA Piper led the pack with 164 lateral hires, followed closely by Jones Day with 156 and Greenberg Traurig with 152.

All in all, it’s apparent to us from the data that partner lateral hiring has become mainstream and an integral part of the Big Law playbook. A significant majority of firms now pursue lateral partner hires not just opportunistically but consistently year after year. And a few big firms are most definitely relying on it as a cornerstone of their strategy.

We very much expect to see these trends continue in the coming year, as from the early indications, 2015 is shaping up to be another boom year for partners on the move. Although our sample is small, partners represented by Kinney Recruiting at AmLaw 200 firms currently hold offers worth in excess of $20 million.

Watch this space for parts two and three of this report, covering associate and counsel lateral hiring in 2014. In the meantime, to stay apprised of major lateral moves as they happen, use the form below to be included in our regular newsletter.