Record-Breaking Transactional Hiring by Law Firms in 2021

Much has been said and written about the robust lateral hiring of 2021, and it was, in fact, a very busy year.  For example, Firm Prospects tracked 27,245 attorneys moves in 2021, as compared to 17,383 in 2020 and 22,362 in 2019, a 56% and 22% increase, respectively.  What really stands out about 2021, however, is not necessarily the total number of hires but rather the unprecedented demand for transactional attorneys.

Unprecedented Spike in Demand

Generally speaking, hiring by AmLaw 200 law firms tracks with the broader practice-area demographics of the attorneys within its ranks, save for small upticks/drops in hiring of attorneys with certain specializations driven by demand in various sectors or by market conditions.  For example, in the middle of the pandemic, there was a slight uptick in hiring of bankruptcy attorneys as well as a slight bump in demand for employment attorneys due to conditions created by COVID.  This trend can be seen in the first three years of Figure 1., below.

The highlighted portion of Figure 1., however, shows the sharp deviation from the proportional hiring that Firm Prospects tracked in the three years leading up to 2021. By way of example, looking at the two largest practice areas within which AmLaw 200 attorneys practice, litigation and corporate, which make up 34% and 19% of AmLaw 200 attorneys, respectively, the true demand for transactional attorneys in 2021 becomes apparent: there are 76% more litigation attorneys in the AmLaw 200 than there are corporate attorneys, yet in the second and third quarters of 2021 firms hired nearly 10% more corporate attorneys.

Corporate Attorneys Hired at a Rate of 2X Litigators and IP Attorneys

Figure 2., below, displays the same hires covered in Figure 1., above, for the four largest practice areas in the AmLaw 200: litigation, corporate, intellectual property and employment.  Rather than presenting the data as aggregate hires, however, Figure 2. displays the data as a percentage of total attorneys in those practice.  For example, at the peak of hiring in the second quarter of 2021, Firm Prospects tracked 1040 corporate hires out of ~22,600 corporate attorneys in our database, for a total of ~4.6% of  all corporate attorneys.  In that same quarter, only 2.3% of litigators and IP attorneys moved and 3.57% of employment attorneys moved.  Thus, the data show that corporate attorneys were hired twice as frequently as litigators or intellectual property attorneys and just under 30% more frequently than employment attorneys.

SPAC IPOs and Tech M&A Driving Demand

Much of the demand for corporate attorneys in 2021 can be tied back to record levels of tech M&A deals and the boom in SPAC IPOs.  As the below chart from PitchBook shows, SPAC IPOs more than doubled from Q4 of 2020 to Q1 of 2021, coinciding with the ramp up in corporate attorney hiring that started in Q1 of 2021 and peaked in Q1 of the same year.  It will be interesting to see what happens in light of the slowdown in SPAC activity, particularly if there is a drop-off in tech M&A deals in 2022 as well.

 

2021 SPAC Market Trends: Down in the Third Quarter? | Mayer Brown Free Writings + Perspectives - JDSupra

Destinations of Top 5 Law School Grads by Firm, Location and Practice Area

Where do recent graduates (’17 – ’19) of Yale, Harvard, Stanford, University of Chicago, and Columbia end up?  Check out the interactive graphs below to find out.  All data provided by Firm Prospects, LLC.

Law Firms

As displayed in Figure 1. below, Skadden ranks in the top 5 for all schools evaluated, with almost 8% of recent graduates tracked by Firm Prospects* from both Stanford and University of Chicago, and greater than 5% of all recent grads from the remaining 3 schools, at the firm. Davis Polk ranks in the top 5 for three of the schools evaluated, Yale, Columbia and Stanford.  Wachtell shows an affinity for Yale grads, in a tie for second with Davis Polk at almost 7% of the grads from New Haven while Cravath hires 5% of grads from Harvard and Columbia.  For more info, click and scroll through the interactive graph below.

Figure 1.

Locations

As to location of preference, Figure 2. below reveals, not unexpectedly, that New York City is the most common major metropolitan destination, by far, for the the students of these five law schools.  The data reveal, however, that there is also a correlation between where the school is located and where the students end up.  For example, almost 80% of recent graduates from Columbia are in New York City, as opposed to Yale and Harvard graduates, which sent 54% and 48% of their recent grads, respectively, to the Big Apple.  Similarly, 52% of recent Stanford grads stay in California, whereas only about 15% of recent Harvard grads head to the West Coast.

Figure 2.

Practice Areas

As shown in Figure 3. below, for all law schools evaluated, corporate and litigation are by far the most commonly chosen practice areas, due in no small part to those two areas making up a majority of the practices at large law firms in general. What is interesting to see, though, is that most of the schools have a relatively even split between corporate work and litigation, except for Yale, where nearly 56% of its recent grads went into a litigation practice while less than 14% went into a corporate practice.  Other practice areas that round out the top spots are: IP, tax, banking and bankruptcy.

Figure 2.

*The percentages listed above include only graduates tracked by Firm Prospects into one of the ~2,700 firms covered by it’s database, which includes secondary moves from clerkships or non-law firm positions, but it does not include graduates outside of its database.