The American Lawyer Finds Partner Hiring Surged at Big Firms Though Lateral Integration and Profitability Still A Struggle
Of 2,691 lateral moves recorded in the 2012 survey, 280 stemmed from the dissolution of Dewey & LeBoeuf. In 2011, the Howrey failure accounted for 208 of the 2,454 moves. Failed firms also powered the lateral market in the peak year 2009, when the 2,775 total was swelled by the closing of Thacher Proffitt & Wood, Heller Ehrman, Thelen, and WolfBlock.
Firm managers told The American Lawyer that strategic goals like revenue growth, practice building and geographic reach are fueling lateral hiring, but their ability to successfully integrate and profit from new partners is erratic at best.
"With vast amounts of money at stake in promised compensation, headhunter fees, and partner time, just about every firm wants to improve its lateral hiring process," wrote Senior Reporter Amy Kolz. "But they often fall short when it comes to implementing changes. Due diligence can be rushed or left incomplete; lofty integration plans might be forgotten or shoved aside after a new partner’s first weeks."
For the third year in a row, DLA Piper was the most acquisitive firm, adding 97 partners last year and losing 34 for a net gain of 63. Other firms with a large international presence that were among the survey’s leaders were Jones Day, which netted 40 lateral partners, and Baker & McKenzie with 30.
SNR Denton recorded a net loss of 35 lateral partners, the largest of the Am Law 200 aside from Dewey. Other firms with sizable net losses included Vinson & Elkins with 26 and Chadbourne & Parke with 23.
Of the former Dewey partners, the largest group, 23, went to Winston & Strawn. DLA Piper hired 21, Morgan, Lewis & Bockius 20, and Proskauer Rose 13.
Firms reported a variety of new initiatives aimed at improving lateral hiring and integration. Many have made the hiring process more formal, in some cases introducing "devil's advocates" to focus more critical eyes on the due diligence process. Pay negotiations are also getting more attention due to a perception that laterals are often over-compensated. To improve laterals’ integration, some firms now assign them mentors from their practice groups.
Also included in The American Lawyer’s Lateral Report are profiles of 17 of the year's highest-profile hires, the "All-Star Laterals."
Complete survey results are available for purchase in Excel format from ALM Legal Intelligence at http://www.almlegalintel.com/Surveys/LateralPartners.
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