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Classes of first-year associates were flat again at many Bay Area law firms this fall, creating an unexpected market for lateral hires. Most firms are feeling the effects of their conservative hiring over the last few years, which led to a shortage of junior associates. And with a recent uptick in work, firms are forced to look outward for help. Recruiters say lateral hiring is up in the last six months — especially in the IP, real estate transaction and corporate work areas. Still, most remain cautious about attributing this increase to any kind of dramatic economic turnaround. Avis Caravello, an attorney search consultant, says emphasis remains on replacement rather than investment hires, made with the future in mind. “They are just starting to fill the voids from the downsizing that occurred a year and a half or two years go,” she said. “Right now the ranks are pretty thin because the classes have been smaller and there was attrition from downsizing and normal attrition.” Others agreed that there’s a greater need for associates. “I wouldn’t describe it as a flood,” said Palo Alto-based W. Jon Escher, of Solutus Legal Search. But, he said, “firms are a little more busy.” Escher estimated lateral associate hiring — especially of second- through fifth-years — as being 20 to 30 percent higher than last year. The need for high-performing, experienced associates is up, said another recruiter. “I would say there has been rejuvenated interest in top-tier lateral associates,” said Carl Baier, president of Baier Legal Search. Indeed, many firms plan to increase their ranks in years to come. And they’re doing that, in part, by bringing in more attorneys at the bottom rung. “If I had to make the decision today, I would be starting almost twice as many first-years as I did this fall,” said Heller Ehrman White & McAuliffe’s firmwide recruiter, Michael Charlson. Heller’s first-year class grew from 38 to 42 attorneys firmwide, but Charlson expects a significantly larger fall class next year. In the meantime, Heller has brought on larger numbers of lateral associates in the past year, Charlson said. The need was particularly great at the junior levels for second- and third-years. A few firms brought in larger classes this year. Latham & Watkins hired six more for its Menlo Park office, up from four a year ago. Wilson Sonsini Goodrich & Rosati added four attorneys to its Palo Alto office and two to its San Francisco office. “We’ve got more work than bodies,” said James Otteson, a Wilson Sonsini hiring partner. “Things are going well.” The biggest jump was at Orrick, Herrington & Sutcliffe, which doubled the size of its San Francisco first-year class. But those numbers are an anomaly created by Orrick’s absorption of Clifford Chance lawyers after the British firm’s local office closed in August. At Cooley Godward, where the first-year class shrank from 36 associates last year to 31 this year, there are also plans for a larger class next year. The firm hired 27 lateral associates last year, according to partners. That is about 25 percent more than the previous year. Sedgwick, Detert, Moran & Arnold’s hiring partner, Stephanie Sheridan, said some firms have done away with summer associates in favor of laterals. But that can impact a firm’s culture, she added. Another strategy can be to hire third-year law students who haven’t accepted other offers, but Heller’s Charlson says his firm doesn’t often take that tack. Even as firms feel the need, they continue to find new ways to appeal to law students. One example is Pillsbury Winthrop’s youth-orientated recruiting brochure, with images of pizza boxes and heart-shaped tattoos — a throwback to the dot-com boom. Pillsbury Managing Partner Marina Park says such efforts are important to the firm’s overall branding. Sedgwick is trying an old strategy of including first-year law students in its summer associate program. “It seemed to have raised our profile on those campuses,” Sheridan said. As part of Latham’s recruiting, the firm will hold its second diversity weekend later in the year, giving summers and first-years a chance to meet associates and partners who come from diverse backgrounds.

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