This week we are publishing the third part of our special report on lateral hiring trends in the legal market. In our prior postings we reported on the trends in lateral hiring of law firm partners and associates. This week our attention shifts to lateral hiring for of counsel positions.

These reports are based on market data we have collected on our own over the last five years. As previously mentioned, several general caveats should be noted about our methodology and the scope of the data collection:

• this report only covers data for the top 200 American law firms;
• it covers lateral hiring practices in 19 major domestic markets;
• we collect this data on our own and make no representation as to its completeness or accuracy;
• the associate numbers in particular may be subject to underreporting (more so than partner lateral hiring) simply due to law firm policy regarding public announcement

Despite these caveats we believe the data available to us and as presented here is directionally accurate as to general market trends. We also make this data available by email subscription (sign up at the bottom of this article).

Of Counsel Lateral Hiring Trends 2010 – 2014

Not surprisingly the 5-year trend for of counsel lateral hiring follows the same general pattern we discussed previously regarding law firm partners and associates. After tailing off sharply in the years immediately following the Great Recession, large law firms gradually resumed a more normal and elevated pace for lateral hiring of counsel positions as shown in the chart below.

But notice over the course of the last three years how of counsel lateral hiring has held remarkably steady. This is true in the aggregate as well as when we look at the numbers broken down by geographical region or major practice areas; there has been very little variability in the level of counsel hiring from 2012 to 2014. This stands in sharp contrast to the trends we discussed previously for lateral hiring of both partners and associates, where there is considerable variability year over year. Compared to the clocklike regularity with of counsel hiring, partner lateral hiring dropped by 6.4% from 2012 to 2013 and associate lateral hiring fell off by more than 36% from 2013 to 2014.

We also note another interesting point of comparison in the data.  For the most part, big law firms hire 2 to 3 times as many associates laterally as they do of counsel attorneys. The total number of lateral hires of both associates and of counsel positions for the last five years is set out in the bar chart below.

But in the last year, as associate lateral hiring has tailed off (due in large to a potential shortfall in the number of qualified mid-level associates, as we discussed in our prior post), for the first time we’ve noticed that, in a few select practice areas, of counsel lateral hiring has begun to exceed the associate lateral hires, as shown on the chart below.

This suggests to us that of counsel hiring has not only been consistent but may be in the process of becoming increasingly important, particularly in the next few years if the shortage of qualified mid-level associates remains acute, as we believe it will. Such a trend would also make sense given the increasing tendency of large law firms to limit the number of full equity partners, as has been widely noted among industry experts. It will be interesting to see how this plays out in the next few years – if large law firms continue to rely more heavily on of counsel lateral hiring to fill the gaps in their lineup, not just in specialty practice areas, but in more mainstream corporate and litigation areas as well.

The data clearly shows just how important lateral hiring has become across the board for big law firms, with respect to partners, associates and of counsel attorneys. But there are some significant differences in the lateral hiring strategies being pursued by various leading law firms, as we’ll discuss in the next and final part of this special report. Lateral hiring is a game that every large law firm plays. But for any lawyer considering a move, it’s very important to be aware how the strategies and even the rules of the game vary from one firm to another. Stay tuned for our wrap up next week.