Some Big Law firms trying to hire associates in a hyper-competitive market are shedding traditional approaches as they seek candidates with atypical pedigrees beyond peer firms.
These firms are looking at less prestigious operations than they would have typically tapped in the past, picking up associates from Am Law 200 firms or more local outfits, said Michelle Fivel, a partner at Major Lindsey & Africa. Some Big Law firms that used to focus only inside the U.S. for hires are also looking abroad and bringing in associates from Australian or Canadian law firms, she said.
“The last time I saw this really happening to the degree that it’s happened was back before the last recession,” Fivel said. “Those are things that only happen when it’s a white-hot market—and it is a white-hot market right now.”
Some of the top 50 and 100 firms in the U.S. have become open to hiring talented lawyers from Am Law 200 and regional firms, particularly in the most sought after corporate practice areas. The result has been new opportunities for job hunters.
“In the past, they would have easily gotten a rejection,” said Katherine Loanzon, New York-based managing director of Kinney Recruiting. “But now, because the talent is so tight, they’re getting a response. They’re getting hired.”
Expanding searches beyond a T14 pedigree has given associates opportunities that didn’t exist before and has given some Big Law firms a competitive advantage in recruitment over other top law firms that are sticking to traditional criteria.
Incredibly busy private equity and transactional markets, combined with law firms’ ability to hire associates remotely and faster on a virtual basis, has created market dynamics that show significant increases in lateral associate activity, said Michael Ellenhorn, founder and CEO of Decipher, a competitive intelligence firm that performs due diligence on Big Law hires.
“The corporate associate market is effectively a perfect storm,” he said.
The nation’s top 100 firms made 724 corporate associate lateral hires from Jan. 1 through May 26, according to Decipher. Over the same time period between 2017 and 2020, those firms made an average of 471 hires. Annually, from 2017 to 2020, firms made an average of 1,228 corporate associate hires, Decipher’s data shows.
Thus far, in 2021, the top 100 firms made a total of 2,277 associate hires.
The strong demand for talent has caused some firms to venture outside of their normal, standard protocols to recruit associates, said Matt Ritter, Los Angeles-based principal at Lateral Link. Firms are getting creative and flexible, without sacrificing their standards, he said.
In addition to looking beyond peer firms, Fivel said Big Law firms are more open to retooling associates at peer operations who want to change their practice to some degree.
Particularly in the capital markets space, some firms are being more openminded because it’s a particularly busy practice area, she said. It has to do with how busy they are, what the supply of associates on the market is and how big their practice might be, Fivel said, noting that firms might be less openminded when it comes to litigation, for example.
Beyond a T14 Pedigree
Typically, Am Law 50 firms poach associate talent from peer firms. But over the last few months, associates from regional firms are getting scooped up by top firms. Those firms are primarily concentrated in corporate transactional groups like capital markets, financing and mergers and acquisitions, said Katherine Loanzon, New York-based managing director of Kinney Recruiting.
“It’s so unusual because in the past, its almost unheard of, and now it’s great for these associates who may never have had that opportunity to go to a global law firm,” Loanzon said. This is particularly true if they have the right experience in terms of M&A and capital markets, she said.
In the Northeast, Loanzon has seen associates from regional New Jersey firms head to large global firms. Regional and local firms that specialized in special purpose acquisition companies prior to the pandemic because of their lower billable rates are now seeing their associates head to these larger firms, she said.
Firms have also been more flexible in some of their more historically stringent recruitment criteria, like moving away from the emphasis on graduates of the top 14 law schools, Ritter said. As they look in secondary markets for talent, the best law school in the region might not be a T14 school, he said.
“Somebody who took a scholarship and went to a lower ranked law school because they didn’t have the finances and didn’t want to take the risk of $120,000 in loans is still the same person had they gone to the more expensive T14 law school,” said Jennifer Bluestein, chief talent officer at Perkins Coie.
Perkins Coie is looking for lateral candidates that have the right interest and experience, Bluestein said. The firm isn’t rigidly holding on to whether the candidates went to UC Berkley, Stanford, or UCLA, but thinking more broadly, which she said is helping from both a diversity standpoint and an overall recruiting standpoint.
Stuck in Tradition
Though the “white-hot market” for associate talent has afforded some law firms the ability to be more flexible, some firms, particularly those on Wall Street, are sticking to their recruitment ways.
New York isn’t a market that is used to importing talent, Fivel said. It will import talent in some instances, but it has never relied on that to fill associate ranks, she said, noting that some of the firm hires tend to come from top firms in Australia or Canada.
“They’re stuck in how they hire, and they created a certain tradition, and it’s probably difficult for them to move away from that model,” Loanzon said. They will “grit their teeth and have their attorneys who are still there power through without compromising their criteria and quality in the type of background.”
This in turn could lead to higher attrition rates than in the past, despite the spring and fall bonuses that many Big Law firms have announced to entice associates to stay, she said.
Only time will tell if this movement in hiring signals a prolonged change for the industry. But if associates coming from smaller and regional firms end up doing well in the transition to global firms, they may benefit both a whole new class of associates and law firms, Loanzon said.
“It shows these firm leaders that there’s a lot of untapped talent in these places that they weren’t traditionally looking at,” she said. That “may give law firms more of a competitive advantage.”