Why Associates Lateral in Q4
Associates make lateral moves to other firms for personal and professional reasons at all different times of the year. But why would an associate make a move at the end of the calendar year? With many firms providing their associates with their year-end bonuses at the start of the new year, wouldn't it make sense to wait before you leave your current firm?
Not necessarily.
First, let's look at the actual numbers. As you can see from the chart above, according to data collected by Firm Prospects, there were more lateral BigLaw associate moves across the U.S. in the last three months of 2018 (approximately 1,396) then there were in any of the previous three quarters of the year. This marked almost a 100% increase in the number of lateral associate moves compared to the third quarter of 2017.
So what accounts for this bump in lateral movements in last year's fourth quarter? A few things:
An overall strong market for lateral associate moves. Generally speaking the market for making a lateral associate move has been incredibly strong in the last year or so. Firms across the country have a high need for experienced mid-level and senior-level associates, especially in practices like cybersecurity & data privacy, real estate, intellectual property and all types of corporate work. As of the date of this article, there are over 2,700 open lateral associate positions at the top 200 U.S. law firms alone.
Better compensation and relocation packages for lateral associates. Because of the fierce competition in the lateral associate market in the last year, more law firms are offering stronger compensation packages to lateral associates that they hire. This includes relocation expenses for geographic moves, covering time and cost for taking a new state bar exam, signing bonuses and/or (most relevant to moves in the final quarter of the year) covering the associate's lost year-end bonus amount from the departing firm. Of course, no firm is offering all of these incentives and even the ones that do make such decisions on the basis of individual candidates and positions. But certainly more firms are offering them for their lateral associate positions that are particularly difficult to fill.
Law firms playing "catch-up" on filling lateral associate positions at the year end. The recruiting staff at law firms are pulled in lots of different directions. Oftentimes, the start of the calendar year is used to focus on and fulfill the most important strategic recruiting goals set by the management of the firm and the particular office. This often means a focus on strategic partner acquisitions for specific practice ares. Once partner acquisitions are made, there is often a lag to see if associates that used to work with the partner at their previous firm are interested in making a move. When it gets into to the summertime, law firm recruiters often shift their focus away from lateral recruiting altogether to summer associate programs and on-campus interviewing instead. (The legal recruiting industry often calls the relatively brief period in July & August when law firms do their entry level recruiting as "the compression.") As a result of the above, the fall and winter become a good time for recruiters and the firm as a whole to focus on lateral associate hiring.
Associates evaluating short-term and long-term career goals as the end of the year approaches. It is cliche, but the approach of the start of a new calendar year causes people to critically self-evaluate their personal and professional situations. Lawyers are no different. And increasingly I've found that law firm associates have become more keen to frequently check in on their professional careers and see if a move makes sense. More and more associates are seeing that it is no longer the case that to make partner, you should remain at one firm for your entire professional career. Depending on your practice area, working group and general cultural fit, a lateral move may be necessary to meet your ultimate long-term career goal.
DATA SOURCE: Lateral data copyright 2018 Firm Prospects, LLC. All rights reserved. Used with permission. Not for redistribution. Graphic by DuelingData.