Trump’s Law Firm Deals May Have Hurt Headcount: David Lat

It’s still not clear what, if any, fallout the law firms that struck pro bono deals with President Donald Trump earlier this year will face. But analyzing attorney movements over the last six months provides one data point.

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On average, law firms that settled subsequently lost attorneys more attorneys than those who fought the president in court, according to data obtained by Bloomberg Law columnist David Lat.

But there are some firms that buck this overall trend as well as plenty of caveats.

Lat joins our podcast, On The Merits, to walk us through this data on law firm headcounts since Trump started targeting law firms in the spring.

Lat also talks about the lawyer moves that will likely happen later this year that could give us an even clearer picture of how firms are doing and what effect the Trump deals are having on them.

Do you have feedback on this episode of On The Merits? Give us a call and leave a voicemail at 703-341-3690.

This transcript was produced by Bloomberg Law Automation.

Host (Jessie Kamens):

Welcome back to On the Merits, the news podcast from Bloomberg Law. I’m your host, Jessie Kamens.

Throughout the year, we’ve closely covered the law firms that struck deals with President Trump to avoid executive orders targeting their firms, as well as those who chose to fight the orders in court. One question that I know I’ve had is, how many attorneys have voted with their feet and left these firms? Today’s episode looks at that question and gives us some insight, if not a straight answer.

David Lat, a Bloomberg Law columnist and author of the Original Jurisdiction newsletter, worked with the firm SharePoint Legal Insights to look at net headcount changes over the last six months at the 100 largest law firms in the country and compared it with the firms that struck deals with Trump, as well as the firms that fought the president in court. As you’ll hear, the overall trend is that firms that settled lost more lawyers during this time than the firms that fought back. But this is far from decisive, because there are a lot of caveats to what this data means. And there’s also some noise that needs to be sorted through.

So I brought Lat on the podcast to explain all of this. And I started off by asking him why he requested the data in the first place.

David Lat (Guest):

I wanted to see what effect the responses would have, because you could imagine a couple of different responses. On the one hand, you could imagine some lawyers upset over their firm making a deal, leaving that firm. On the other hand, you could imagine some lawyers, partners really, going to a settling firm on the theory that this firm is protected. It is in the good graces now of the administration.

So I wanted to see what happened to their headcount, what happened to their attrition after they decided to either fight an order or reach an agreement.

And in terms of the big picture, the data showed that the five firms that Trump targeted that did not cut deals notched a 2.8% decline in headcount on average. On the other hand, the nine firms that did cut deals suffered a 4.9% average dip in their attorney ranks.

Host:

So just to kind of summarize, the settling firm’s average attrition rate was 75% larger. And the average across the AMLA 100 firms was losing about 2%. So all of the firms on average, the group that you looked at, were at least a little lower than that.

Guest:

Yes. And what you typically see with firm headcount is over the course of a year, a firm will slowly lose lawyers as people leave for government, in-house, et cetera. And then in the fall, their headcount will increase as the incoming associates arrive. So it is really not a problem for a firm if they lose 2% or 3% of their lawyers over a span of several months.

Host:

So that’s a really good intro to the next part I want to do, which is go through. There’s a lot of caveats to this data that can help explain it and also show the limits of it. So first, can you talk about the idea of correlation versus causation, which you talked about in your column?

Guest:

Say you have a firm that reaches a settlement with Trump and its headcount goes down. It could be that the settlement contributed to lawyers leaving, but it could also be that the lawyers left for other reasons, or maybe the lawyers were asked to leave. So correlation is not necessarily causation, and just because a firm that reached a deal lost lawyers doesn’t mean that the lawyers or all of the lawyers left for that reason.

Host:

Right. So looking at some of the individual firms, there are, like you said, other plausible reasons where headcount may decline. For example, you talk a little bit about A&O Shearman and how its recent merger might be playing into this. Could you speak a little to that?

Guest:

Yes. So in May of 2024, the merger between Allen & Overy and Shearman & Sterling took effect. And what you typically see leading up to a merger and also in the wake of a merger is headcount changes. Some of the partners decide that the new firm is not a good platform for their practice. Some of the partners end up having client conflicts because now they’re essentially attached to this other firm, and so that creates problems. And also, some firms in connection with mergers also ask partners to leave. Sometimes this is because there are redundancies, there is overlap between some of the partners from A and B, from firm A and firm B. So sometimes people are essentially shown the door. Sometimes it’s financial. The new post-merger firm is trying to achieve certain financial goals, and if a partner’s practice isn’t financially robust, maybe they want to trim that partner.

So in A&O Shearman’s case, in September of last year, they announced that they intentionally were going to be trimming their global partner headcount by 10%. And interestingly enough, over the period that I looked at, A&O Shearman lost about 10% of its headcount.

Host:

And we’ve been seeing some news of talent leaving Cadwalader, one of the firms that struck a deal. But it seems like there has been some movement with that firm that predates Trump coming into office.

Guest:

Yes, that’s right. Over the course of 2025, Cadwalader has been losing partners. And so again, this is the correlation versus causation part we talked about earlier. It could be that some partners left Cadwalader related to the deal, but it could also be that some partners were feeling that Cadwalader was no longer a good home for their practice. So you can’t necessarily chalk up all of the headcount losses at Cadwalader, which amounted to, I think, a little north of 10% of their total headcount. You can’t attribute all of that to the firm’s deal with the Trump administration.

Host:

And then another factor with this data is that the way it reflects a movement within a firm. So, SharePoint Legal Insights, the data service that I worked with, formerly Leopard Solutions, tracked associate and partner headcount for me. So, if you had an associate who was promoted to partner, that would lead to a dip in the firm’s associate headcount, because the associate is no longer an associate, they’re a partner. But that associate did not leave the firm. Or vice versa, if a partner retires and moves to a counsel or of counsel role, the partner headcount would go down by one, but that person is still at the firm.

So that’s why I wanted to track associate headcount, partner headcount, and total headcount, which by the way, also includes counsel. Because if you don’t realize the inclusion of counsel, some of the things don’t quite make sense. For example, there was a firm that had a small decrease in associates, a small decrease in partners, but an overall change of zero. And so you might say, well, if they lost partners and they lost associates, why didn’t their overall headcount go down? Well, that’s because that firm had something like an 8% growth in the ranks of its counsel.

So some of the changes you might see are actually, I guess, what statisticians might call noise. Typically, firms will announce promotions in the fall or maybe even near the end of the year, but most of the time, they take effect in January. That just makes things easier for the firms. And here, SharePoint looked at a six-month period for me starting in March and going through September 8th. So promotions probably did not make much of a big difference in this data.

Host:

Overall, as you’ve said, the data shows a trend that lawyers are leaving firms who made a deal slightly more than those firms who chose to fight. But looking at the firms one by one, as we’ve said, they might have their own stories. Can you talk about Milbank, for example?

Guest:

Sure. So remember, what I was talking about are averages. And of course, when you have an average, some firms are above and some firms are below. So two firms actually, Milbank and Simpson Thacher, actually gained headcount during this six-month period. Simpson grew by 2% and Milbank grew by 5%. And that is consistent with the overall Milbank story. The firm seems to be doing very well. Last year, it grew its profits per equity partner by something like 33%. Over the summer, it announced these mid-year bonuses for its associates, which makes it the first and so far only large law firm to do this. And so, although it’s possible the firm’s settlement with the administration might have hurt it in some respects, the firm’s future appears bright. It appears to be growing and thriving and doing well financially and spreading the wealth among its lawyers. And so, that is a firm that managed to grow, even though it did cut a deal.

Host:

Do you think it’s possible that there are some partners or associates that are looking to leave, but they either haven’t found the right spot yet, or they’re waiting for their next bonus or partner payout? Is that a possibility, that this is a lagging indicator that doesn’t show us all the data?

Guest:

Oh, absolutely. That is definitely a possibility, and that is something that was pointed out to me by some partners. So, I have a couple of points. First, a partner move takes a long time to plan. Sometimes these can take months. Sometimes if you count initial feelers to the person actually putting their butt in a chair, it can take years. So, it is quite possible there are some partners who have been wanting to leave and have been exploring other firms, but haven’t done it yet. That’s one point.

The second point you alluded to is compensation, and compensation does tend to be backloaded for partners. Typically, partners get these monthly draws, which are essentially advances against profits on some kind of regular schedule. But then in the third quarter and the fourth quarter, the firms ramp up their collections a lot of money comes in, and partners receive these much larger lump sum distributions, which represent their share of the profits in December or early in the new year. So, it could be that there are some partners who are thinking to themselves, oh my gosh, I’m so out of this place. But they are waiting to get that big check or deposit in December or January before making their move.

And as you mentioned with regard to associates, associate bonuses often come later in the year. Many firms pay them in December, some firms pay them early in the new year. And so, there may be a lot of associates who want to move as well for whatever reason, but they’re waiting for those bonuses. Because if you think about it, if we’re say two thirds or three quarters of the way through a year, if you think of your bonus as an associate, you’ve kind of almost earned that prorated bonus in a way. And so, you’re kind of leaving money on the table in a way if you leave before that bonus hits in December.

Host:

So, in the end, looking at the data, what do you think that it tells us about the law firms that were targeted by Trump in some way or that feared being targeted by Trump?

Guest:

So, I do think that the data does show that there is an effect. If you look at the big picture, and as we talked about earlier, the fighting firms lost lawyers at around a 3% rate, and the settling firms lost lawyers at a much higher rate, at a 5% rate. Again, that conceals individual variation among firms. So, I think that overall, I’m guessing, cutting a deal with the administration was negative. But I would also say that I wouldn’t conclude that the overall trajectory of firms has been changed because of how they responded to the administration. So, if a firm is on the rise, I think it will continue to be on the rise. And if a firm is having issues, it will continue to have issues. And so, while the firm’s responses to the Trump administration might have intensified or exacerbated existing trends, for example, the sense I have is that these deals are a data point, but they are not destiny.

Host:

Well, David, thank you so much for joining us today.

Guest:

Thanks for having me.

Host:

And that’ll do it for today’s episode of On the Merits. For more updates, visit our website at news.bloomberglaw.com. That’s news.bloomberglaw.com.

The podcast today was produced by myself, Jessie Kamens, and David Schultz. Our editors were Chris Opfer and Alessandra Rafferty. And our executive producer is Josh Block.

Thanks for listening. We’ll see you next time.