With Layoffs Looming, Associate Lateral Moves Have Practically Flatlined
Biglaw's got some overcapacity problems.
As layoffs continue to plague Biglaw firms this summer, has anyone stopped to wonder why? Back in June, Kate Reder Sheikh, a legal recruiter for Major, Lindsey & Africa, noted that some firms were facing overcapacity among their ranks due to a lack of attrition (or “bloated payrolls,” as she put it).
Now, we have even more hard evidence on Biglaw’s overcapacity: while lateral moves for partners have neared record highs, lateral moves for associates are almost at a standstill. Paired with a decrease in demand, of course this is leading to associate layoffs.
The American Lawyer has additional details on these lateral woes thanks to some newly released data from Decipher Investigative Intelligence:
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The second quarter of this year was the second busiest for partner moves from 2017 to 2023, with 1,265 moves, just 4% below the 1,322 moves in the second quarter of 2022, according to Decipher.
On the other hand, the data shows associate moves in the second quarter were down 43% to 2,797 from 4,904 in the same period in 2022, and down 5% compared to the six-year average from 2017 and 2023.
Overall, lateral moves in the U.S. were off 41% year-to-date, mostly due to the reduction in associate moves, though the discrepancy narrowed a bit in the second quarter, as moves were off 50% after the first quarter, according to Decipher chief data officer Greg Hamman.
So, what’s going on here? “Firms are still in the midst of rebalancing their headcounts at the associate level,” Hamman told Am Law. “Rebalancing” is a really polite way of saying that many Biglaw firms are letting associates know that they’ve overstayed their welcome.
Hopefully things will improve soon, and more associates will not only be able to feel confident enough with market conditions to make a lateral move, but to remain with their firms without fear of being laid off.
Associate Lateral Moves Remain Depressed Even as Partner Moves Bounce Back [American Lawyer]
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Staci Zaretsky is a senior editor at Above the Law, where she’s worked since 2011. She’d love to hear from you, so please feel free to email her with any tips, questions, comments, or critiques. You can follow her on Twitter and Threads or connect with her on LinkedIn.
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