Lateral attorney hiring remained slow in early 2010 but definitely picked up in the second half of the year, particularly regarding associates. The demand for partners with significant business remained constant. However, hiring firms are scrutinizing potential portable business more intensely.
The most active practice areas for lateral partner movement were, in descending order, IP, litigation, corporate, labor, real estate, executive compensation/tax, and bankruptcy. In Los Angeles, the top practice areas requested at the partner level are litigation, corporate, IP and labor/employment. In the Bay Area, corporate and IP partner requests beat out litigation, followed by labor/employment. For associates, we have the most searches for wage & hour class actions and hard and soft IP infringement, with a recent upsurge in M&A job orders. There was a dearth of corporate associate searches throughout 2009 and the first half of 2010.
The continuing lack of interest in real estate, banking and finance is no surprise, given the general business environment. We expect these trends to continue until the economy makes a stronger recovery. Additionally, with new regulations on the healthcare and financial services industries, there may be more call for lawyers with those areas of expertise.
Los Angeles had the most lateral partner moves, followed by San Francisco, Silicon Valley, Orange County, and San Diego, in that order. This is not surprising, given that this corresponds with the size of the legal market in each of those geographic areas. However, on a percentage basis, lateral partner movement in the Bay Area exceeded Los Angeles.
IP partners in Silicon Valley made the most lateral moves, with litigation partners in Los Angeles right behind, followed closely by corporate partners in Silicon Valley. Other strong areas of movement were IP and litigation partners in San Francisco, labor partners in Los Angeles, and IP partners in San Diego. Surprisingly, the most lateral movement in Orange County was among real estate partners—all in one fell swoop when a group of partners moved from Morgan Lewis to Greenberg Traurig recently.
While individual partners and practices moving laterally in 2010 may not rise to the level of some of the marquee lateral partner moves last year, we think it is more important that certain firms really beefed up their offices or practice areas this year with multiple laterals. Examples are: the growth of Greenberg Traurig’s San Francisco and Palo Alto offices and the addition of a group from Morgan Lewis in Orange County; a group from Jeffer to Troutman Sanders; the Seyfarth labor and employment group, which moved to Sheppard Mullin; DLA’s addition of ten lawyers in Sacramento from the dissolving McDonough Holland; Buchalter’s acquisition of Ellman Burke; and Sedgwick’s acquisition of Cassidy Shimco.
We also saw instances of partners who left firms in the past to join other firms or go in-house returning to their previous firms. It could be a case of sticking with what you know.
Boutique firms spun-off from larger firms such as from Skadden, Quinn and Jeffer. Reasons cited are flexibility of billing rates and/or alternative billing arrangements, management independence, and reduced client conflicts. Larger firms may decide to raise billing rates at the beginning of next year, since many held off during this recession. Consequently, this additional rate pressure may force more partners into the lateral marketplace.
In-house hiring remained steady or, perhaps, increased somewhat. As a cost-cutting measure, some corporate legal departments attempted to keep more of their work in-house. They hired at the mid- to senior- associate level to handle the increased workload.