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The number of partners moving in and out of the biggest U.S. law firms dipped 11 percent in 2006–after a 2005 that found the lateral market inundated by lawyers escaping the collapses of Coudert Brothers and Testa, Hurwitz & Thibeault.

The American Lawyer’s annual Lateral Report, a survey of partner moves among The Am Law 200, shows 2,153 partners entering or exiting firms from October 1, 2005 to September 30, 2006. That’s down from 2,429 in the same period the previous year.

Even so, several national firms were hungry for new partners. Greenberg Traurig, which brought aboard 63 laterals, led the list of top lateral gains for the second year. It continues to rack up big numbers despite adding partners in very small groups. Greenberg’s biggest acquisition last year was a team of five lawyers from Sacramento, California’s Livingston & Mattesich to help boost the firm’s government affairs practice in the California capital.

Other big gainers included Bingham McCutchen, which pulled in 42 lateral partners when it acquired Washington, D.C.-based Swidler Berlin and fast-growing Akerman Senterfitt, which added 47 partners, including 20 from its acquisition of Wickwire Gavin, a Virginia-based construction and government contracts boutique. The Coudert meltdown also continued to reverberate: DLA Piper’s international offices added 41 partners, 13 of them from Coudert. And Orrick, Herrington & Sutcliffe also had six former Coudert partners among 40 laterals. [For more numbers, including the firms with biggest lateral losses, click here or see the February print edition of The American Lawyer.]

Despite the Swidler and Wickwire moves, Jon Lindsey, managing partner at recruiting firm Major, Lindsey & Africa, said he’s seeing fewer “big gulp” acquisitions. And though the market was inflated by the Coudert and Testa collapses, lateral movement also cooled slightly because most major firms are doing well. Some unhappy partners are staying put because “it was a pretty good year,” Lindsey says, “and money covers a lot of problems.”

Money, however, isn’t everything, Lindsey says. According to a recent Major, Lindsey survey, simply waving dollars under the nose of a potential lateral partner is not likely to seal the deal. While pay is indeed a major factor in recruitment, many laterals considered a more nuanced set of criteria, ranking “level of anticipated compensation and/or compensation structure” as one of the least important factors in their decision to make a move. Firms that are the most effective at integrating laterals into the partnership, culture, and practice received the highest marks in the Major, Lindsey survey for meeting a lateral’s expectation and satisfaction.

For a firm like Sonnenschein Nath & Rosenthal, keeping laterals satisfied is going to be key if it wants to increase profits. The firm is aggressively recruiting partners, adding 17 last year and 18 in 2005, and hopes laterals will help push the firm’s profit per partner to $1.4 million by 2008. In an interview with The American Lawyer, Elliott Portnoy, Sonnenschein’s incoming chairman and himself a lateral from Arent Fox, says he believes lateral hiring will help push Sonnenschein into the legal elite. [More on Sonnenschein's lateral growth plan.] “Length of service won’t be an impediment to the ability to grow your practice, to get resources, to get compensated generously, and move into leadership roles in the firm,” Portnoy says. “There are boundless opportunities for laterals at Sonnenschein.”

That kind pro-lateral stance is good news for recruiters. Though movement may have been a bit down last year, Lindsey says the market for laterals is still very strong: “I’m certainly as busy as I’ve ever been.”

Inside

Growing Sideways
Sonnenschein plans to double its revenues by cherry-picking lateral partners.

Sonnenschein’ Star Hires
These six are some of the biggest names who have moved into firm and practice leadership.

After the Handshake
Although firms have made strides in satisfying lateral hires, much remains to be done.

Top Gains
Firms that attracted the most laterals. (Expanded for the Web.)

Biggest Losses
Firms that lost the most partners. (Expanded for the Web.)

Practice Areas
Corporate law and litigation saw the most movement. Also, where they went and when.

Methodology
A guide to our numbers.

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