The WSJ Law Blog summarizes the findings in a report by The American Lawyer about the enormous rise in laterals over the last year. Overall, 2,509 partners moved laterally between Am Law 200 firms in 2008.
That’s a 4% increase over 2007, but doesn’t include year-end moves by refugees from Heller Ehrman, Thelen, and Thacher Profit.
At first blush, it makes no sense. Firms are firing lawyers and cutting costs at a record pace. And lateral partner hiring is a costly proposition. Typically, newbie partners take months of ramp-up time before they can turn a profit.
So what gives? How can there be so much hiring activity? Part of it can be chalked up to skittishness. Lawyers are scared of being one of the last on a sinking ship–and are eager to move to firms perceived strong enough to weather the storm. “Accidental laterals,” e.g., lawyers who have been pushed out of their firms, are also driving the spike in movement…
Is all of this partner movement good or bad for BigLaw? It’s good for the talent, allowing many partners to command big salary premiums on the open market. But it has also helped foster a cut-throat environment, with firms focused intensely on boosting profits so that they will be in the running for star partners.
From the WSJ comments: