The State of Chicago’s Lateral Market for Big Law Associates

Chicago, with just over 3,000 big law associates, is the 4th largest legal market in the United States, behind New York, Washington, DC and the Bay Area, and the 5th largest lateral market for associates (behind Los Angeles). The Second City is also home to some of the fastest-growing firms in the country–Kirkland & Ellis, Sidley Austin, and Winston & Strawn among them–and hiring has increased steadily every year for the past five years.

So what is the state of the market in Chicago? What's unique about this market and what does our data say about their career prospects? Let's start with some interesting insights from our data.

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The New York lateral market in 2018: what the data tells us

The New York lateral market, with its 13,000 Big Law associates and 1,200 hires each year, is the nation’s most challenging to navigate. Often, the only information available to candidates making a move are stories from friends and tales from headhunters pushing an agenda. Our mission at Laterally is to bring transparency to the recruiting process with objective data. Based on that data, here is what every associate should know about the New York lateral market:

The lateral market may have plateaued – but there are no signs of a downturn

For the last several years, the New York lateral market has chugged along with barely a blip. Hiring in other markets rose and fell, but hiring by major firms in New York barely fluctuated. In 2017, 155 major firms hired 1269 experienced associates, after hiring 1249 associates in 2016 and 1237 associates in 2015. It’s fair to say the market has plateaued.

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26 Big Law Firms Where Associates Stick Around Longer than their Peers

Big Law associate careers tend to be brutally short. Consider the outcomes of associates who joined 155 major law firms since 2010:*

  • 44% left their firms before their 3rd year mark
  • 67% left their firms before their 5th year mark
  • 78% left their firms before their 7th year mark

Amidst the migration, associates at certain firms stuck around a lot longer than their peers. We took a look at these firms using data from Move Tracker.

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The 15 Hottest (and Coldest) Markets for Associates in 2017

Last week, we showed that the associate lateral market could look extremely hot or extremely cold depending on your practice. The same goes for cities.

Although overall demand for lateral hiring dipped in the US this year, the lateral market looked very different depending on what city you were in. In some cities, you were more than twice as likely to get hired as a lateral than others. 

To measure which cities were hottest and coldest in 2017, we looked at which cities had the most lateral associate hires relative to the number of practicing associates. Our data, from our Move Tracker, covers 156 major firms in 15 cities nationwide. Here are the results:

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The Best and Worst Practice Areas for Associates Looking to Lateral in 2017

Associates approaching the lateral market will find widely divergent demand for their services depending on the type of law they practice. 

Firms almost always hire lateral associates and counsel to fill specific gaps in their capabilities, and this happens in some practice areas far more often than others. 

Ranked below are the practice areas with the highest percentage of associates and counsel who made lateral moves in 2017.*

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Top-5: Law firms with the lowest attrition rates in 2017, nationwide and by city

Some large law firms manage to retain associates at a significantly higher rate than others. Below, using data from Laterally's Move Tracker, we compiled a list of law firm offices with the lowest attrition rates in 2017 and compared it to offices with the highest attrition rates this year.

Congrats to all the firms that hung on to their associates in 2017!

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Want to go in-house? These practices gave associates the best shot in 2017.

80% of associates on Laterally are interested in in-house jobs, but only 24% of associates who leave their firm will go in-house, according to Laterally's data on in-house moves since 2010. In 2017, the competition has been even more intense, with the number of in-house hires from big law on pace to decline this year by 200-300, from 1340 in 2016.*

For young lawyers and law students planning their careers, it is important to note the primary factor in your likelihood of landing an in-house job as an associate: your practice area.

Ranked below are the practice areas that have seen the highest percentage of big law associates leave their firms to go in-house in 2017.†

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How We're Bringing Transparency to Legal Careers: Announcing Move Tracker

When we set out to build Laterally several years ago, I was struck by how little information was available to law firm associates about future career opportunities.  It was only when looking to leave their firm that an associate might talk to a headhunter about career options -- and receive advice based largely on anecdotes and personal observation, but rarely on objective data. We committed then to use technology to bring data and transparency to legal hiring. Today, I'm excited to announce the launch of an important new product in service of this goal: Move Tracker.

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    2017 M&A Associate Outlook and Year in Review

    The M&A lateral market saw significant declines this year, after a banner year in 2015. Driving the strong demand for M&A associates in 2015 was a booming M&A market in the United States, as well as a shortage of mid-level associates – a result of firms hiring smaller class sizes during the recession. But in 2016, M&A activity slowed and the shortage of mid-level associates eased as more recent M&A classes came of age.

    Despite this decline, mid-level M&A associates remained some of the most in-demand attorneys in the country in 2016.  And we expect the same to be true in 2017.  In our 2017 M&A outlook, below, we go inside the data on both the demand side (jobs) and the supply side (lawyers) to explain the reasons for our optimism.

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    The 17 Hottest (and Coldest) Markets for Associates in 2016

    With many in the industry predicting that we would see reduced lateral hiring this year after a strong 2015 (the strongest year since 2007) the results from 2016 are great news for associates. At 270 major firms in the 17 largest legal markets in the US, there were virtually no change in associate lateral hiring (3,098 associate opportunities came on the market this year versus 3,107 in 2015).*

    However, job growth was not evenly distributed. Some cities saw significantly increased hiring, while others saw significant declines.

    In 2016, the hottest markets for lateral associates were:

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    Which firms REALLY matched the Cravath scale?

    Many associates were fortunate to see their salaries raised in line with the new Cravath scale this summer.  Many other firms raised salaries, but didn’t fully match Cravath. 

    For your convenience, we’ve listed in one place all the Vault 100 firms (and a few boutiques) that matched the Cravath scale, the firms that came close to matching, and the firms that fell short. Full details on the status of each firm’s raises are in a chart at the bottom of the post.

    The Winner: Wachtell has its own way of paying associates above market, but only one firm publicly bested the Cravath scale: Desmarais. Desmarais, an IP litigation boutique, now pays its 1st year associates $200k and its 8th year associates $335k ($20k more than Cravath).

    Full Matches: A full match to the Cravath scale in our book starts at $180k for first years, and rises to either $300k for 7th years or $315k for 8th years in all U.S. offices.

    The firms that matched were, naturally, the most profitable firms in the country. Of the 30 Vault firms boasting at least $2M in profits per partner (PPP), 27 (90%) are known to have matched the Cravath scale in all U.S. offices. Of 31 firms with PPP between $1.5 and $2M, 21 (68%) matched Cravath; of 29 firms with PPP between $1 and 1.49M, 11 (38%) matched Cravath; and of 22 firms with less than $1M in profits per partner, only one firm (Ashurst) fully matched Cravath (5%). 

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    Every firm that announced raises (and every firm that hasn't) in one chart - UPDATED 6.27

    As the news of associate raises continues, big questions remain. Take a look at these numbers:

    • Of 32 firms with profits per partner of $2 million and more, 31 have announced raises (97%).
    • Of 26 firms with profits per partner of between $1.5 and $1.9 million, 24 have announced raises (92%).
    • Of 23 firms with profits per partner of between $1 million and $1.4 million, 10 (43%) have announced some form of raise.
    • Of 17 firms with profits per partner below $1 million, only 4 (24%) have raised salaries, and 3 of those firms stipulated only in large markets or based on performance.

    The upper echelon of firms (making more than $2 million in profit per partner) has fallen in line with the Cravath salary scale, most of them announcing raises within a week of Cravath's announcement. The next tier (making between $1.5 and $2 million per partner) has seen a majority of its firms match the Cravath scale, leading us to believe their peers will also fall in line, lest the brain drain of associate talent begin. But beyond that, the situation is unclear.

    Will firms making below $1.5 million per partner begin to raise salaries in line with their more economically-blessed competition? Or will we start to see a much clearer bifurcation in the market? If so, the difference between the top and middle-tier firms will be more stark than before.  The richest firms will try to attract ambitious associates looking for the biggest bucks and the biggest clients, while the less-well-off will have to find other ways to appeal to associates. The legal industry could be getting more interesting.  

    See below for all of the firms announcing raises, and those that have yet to announce.  Be sure to check the very bottom of the chart to see the firms with undisclosed profits per partner that did r(a)ise to the occasion to keep and retain their talent!  (And hey, if you happen to be looking for jobs at firms with those sweet, sweet raises, check out our website to see who's hiring).

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