Law Firms Decrease Lateral Associate Hiring Amid Economic Uncertainty

  Recruiters report that large law firms have decreased their lateral associate hiring, as many firms find themselves overstaffed after a hiring spree in recent years. Despite this, some associates who entered the workforce during the boom times were slow to realize this shift in the market. The National Association for Law Placement recently released data indicating that lateral associate hiring decreased by an average of 20% across all law firm sizes between 2021 and 2022, with firms of more than 700 lawyers experiencing the most significant decline. Michelle Fivel, a partner at Major Lindsey & Africa specializing in associate placements, notes that firms have entirely reversed their hiring practices, with the trend beginning in the past year and intensifying in 2023. However, Fivel clarified that law firms are not halting their hiring efforts; instead, they are being very selective and considering factors such as credentials, experience level, ability to work in a particular city's office, and a strong resume without excessive job changes.
 
According to several recruiters interviewed by Law360 Pulse, law firms are hesitant to take on new associates amid a challenging economic environment characterized by rising interest rates, persistent inflation, and bank failures. After a hiring spree in 2021, firms are reluctant to add any "dead weight" to their bloated ranks. Despite this reality, recruiters continue to see associates seeking to change practice areas through lateral moves, expecting substantial sign-on bonuses, or hoping to work remotely. However, such activities are unlikely in the current hiring environment, marked by firms seeking particular talent to fill specific positions. According to recruiters, the most in-demand jobs are for midlevel associates with particular expertise in specific practice areas. While senior and junior associates are also in demand, the needs for these positions are less pronounced. Recruiters suggest that there are opportunities available for associates open to moving to slightly smaller law firms, which may have fewer specific talent requirements. Data from the National Association for Law Placement supports this, indicating lateral associate hiring in firms of 250 or fewer lawyers increased by 11.5% in 2022. It declined by almost 25% at firms of more than 700 lawyers. Nonetheless, recruiters caution that expectations regarding perks such as sign-on bonuses may not match the current market realities.