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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    The 3 Hottest Markets and Practices for Laterals in Q1 2016

    Q1 is complete and 2016 is looking good for associates looking to lateral. Law firms conducted 12% more lateral associates in the first quarter this year than they did in the previous year. Some markets and practices have significantly more opportunities available this year than they did last year. To determine which markets and practices were growing the fastest, we looked at lateral searches from 150 of the largest firms in the country in 8 markets and 12 practices.

    GROWTH BY MARKET

    The 3 hottest markets for laterals in Q1 2016 are:

    • Atlanta - 66% growth (over Q1 2015)
    • Texas - 58% growth
    • Chicago - 49% growth

    The 3 growing moderately are:

    • Los Angeles - 14% growth
    • New York - 9% growth
    • Washington D.C. - 3% growth
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