As the Am Law 100 firms continue to show strong growth, individual firms are focusing on hiring as one of their top strategies for improving revenue and profitability. The recession hit law firms hard, resulting in over 8,000 job losses among the Am Law 100 firms. Despite improvements in headcount in the last few years, some firms are still hesitant to make significant changes in how they hire. However, lower demand, fee pressures and increased competition mean that firms cannot afford to maintain the status quo. Continuing growth is necessary to assuring clients and attorneys that the firm is positioned to best serve clients’ needs. Today’s legal environment requires that law firm leaders be strategic, proactive and nimble in growing the firm. If they are not doing that, then partners need to take action to change management. Unfortunately, some firms hinder those changes. Trust and accountability are lacking, which is felt in ineffective lateral hiring practices and in turn hurts the firm’s competitive position.
State of the Legal Market
According to the 2018 Report on the State of the Legal Market, law firms overall are continuing to experience sluggish growth in demand for their services. However, the exception to this are the Am 100 firms who have “significantly outpaced both Am Law Second 100 and Midsize firms in a number of key indicators including percentage growth in demand, worked rates, fees worked, overall revenues, and cash collections.” Notwithstanding these results, the legal market remains challenging for even top firms. Am Law firms are increasingly moving into secondary cities like Boston, Philadelphia and Minneapolis to help fuel their growth; in some cases, acquiring regional law firms or practice groups. This in turn is creating more competition and disrupting the legal landscape for local and smaller firms. The smaller firms are competing with top firms not just for clients, but for attorneys. As a result, their recruitment efforts must be particularly effective, and in some cases, they are meeting these challenges by hiring attorneys in new markets drawing them away from top firms.
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