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Conventional wisdom suggests that associates leave their law firm jobs in pursuit of higher compensation. But empirical evidence in a groundbreaking NALP Foundation research study of 2,200 lateral lawyers titled “The Lateral Lawyer: Why They Leave and What May Make Them Stay” offers a different view. According to the new data, while “financial incentive” was one of the top five influences on associate job change decisions (selected by 56.9 percent of respondents), the pursuit of professional development opportunities and practice interests exceeded the influences of compensation by a clear margin (selected by 75 percent and 63.5 percent respectively.) The goal of the study was multifaceted, including the primary goal of identifying the catalysts that were most influential in affecting the job change decisions of lateral attorneys. The data reveal notable differences in the job change motivators for associates, in particular, that not all associate job changes are predicated on dissatisfaction with employers. Rather, the data suggest that some job changes are motivated by nothing more complex than opportunity in a seller’s market as well as significant forces related to career goals, work experiences and workplace environments. Perhaps just as important as the compelling data within it, this study of laterals during late 2000 establishes the reality that lateral lawyers and their perspectives on their career options represent a dramatic change in the commitment of lawyers to their firms and firms to their lawyers. The change is characterized by the observation that private practice lawyers today, unlike those who preceded them, do not necessarily expect nor pursue a lifelong employment covenant with law firms. Similarly, there is far less certainty within firms that the talent hired today will remain with the firm for the future. The totality of the paradigm shift has engendered a new protocol in the profession: Both lawyers and law firms have quietly acknowledged that there is a rationale and purpose in lawyers changing law firm employers. Moreover, the new protocol seems to have earned the tacit approval of the profession as law firms position themselves to court and hire laterals and lawyers position themselves as lateral candidates of choice. Today, one of every seven associates changes jobs within a given year. (Keeping the Keepers: Associate Retention in Times of Attrition, 1998) Among associates leaving their law firms in 1999, as data compiled in a 2000 NALP Foundation report revealed, just under half (41.9 percent) of those departing from a law firm took jobs with another law firm. (Beyond the Bidding Wars: A Survey of Associate Attrition, Departure Destinations and Workplace Incentives, 2000) As further evidence that the paradigm shift toward lateral employment is establishing itself as a permanent phenomenon, NALP data show that since the early 1990s lateral hiring has been on the rise, outpacing entry-level hiring by a considerable margin. (Patterns and Practices: Measures of Law Firm Hiring, Leverage, and Billable Hours, 2000) What has predicated the paradigm shift from professional monogamy to lateraling? Observers cite three major factors: a deep recession that was followed immediately by an unusually robust and enduring market economy; rapidly evolving new legal and business enterprises that seek talented lawyers as leaders and employees; and radically different values of the most recent classes of law graduates, sometimes referred to as “Generation X.” Beginning in late 1989, the media chronicled the fallout as the U.S. economy began a downward recessionary trend. By 1991, a depressed legal market was precipitating massive layoffs of law firm associates and dramatically slowing the hiring of new law graduates into private practice. It was during this super-charged atmosphere of belt-tightening, rightsizing, and folding that scores of associates were displaced from their firms. Associates who lost their jobs glumly internalized the lesson of the day: The loyalty they had so readily extended as part of their associate culture was not necessarily reciprocated. Even associates who retained their jobs began to assess the risks and rewards of embracing institutional paternalism as they watched their colleagues depart. As a result, many associates concluded, perhaps reasonably, that they could not depend on law firms to retain them when market conditions ebbed and, conversely, that they could not depend on law firms to provide optimal career development opportunities for them in a robust, competitive marketplace. Within a matter of months, the market — lurching from recessionary to robust — had contributed to a circumstance and mindset from which lateral moves were a practical and expected resolution for career uncertainty. As the recession ebbed and the economy came to life again in late 1993 and early 1994, entire new industries with a seemingly insatiable hunger for the intellectual talent of young lawyers were being born in financial districts, high-tech centers, and business and industrial venues nationwide. During the past decade, the number of new law graduates acquiring jobs in business and industry has doubled, while the relative number of graduates acquiring law firm jobs declined by six percentage points. (Perceptions of Partnership: The Allure and Accessibility of the Brass Ring, 1999) Subsequently, the demand for top legal talent by major law firms has exceeded the ready supply in many major markets. This created a true sellers’ market and paved the way for lateral hiring to become “hot” and, as such, fully acceptable. Finally, the paradigm shift in favor of lateral career paths has been attributed to the values, expectations, and aspirations of a new generation of law graduates. Law graduates born between 1968 and 1978 and entering practice between 1991 and 2001 have demonstrated by their actions within the lateral job change phenomenon that they view their careers much differently than any prior generation of lawyers. (Jobs & JDs: Employment and Salaries of New Law Graduates — Class of 1999, 2000) WHAT ARE THE PRIMARY FACTORS INFLUENCING ASSOCIATES’ JOB CHANGES? The Lateral Lawyer study used as a basis the five factors that have most commonly been reported in prior studies to be of particular importance in associates’ decisions to make job changes. Associates were afforded the opportunity to prioritize these factors according to their individual experiences. The primary factors, as ordered by lateral associates as a group and illustrated in the accompanying table were: � Professional development � Practice interests � Financial incentives � Workplace environment, and � Work/life balance. In documenting the importance of each of these factors in the career decisions of associates, this study also examined the detailed factors within each of the primary motivators that reverberated with associates. For example, for respondents who identified financial incentives as a prime factor motivating their change, the data offer insights on whether their interest was more frequently focused on the firm’s overall financial stability (30.2 percent), individual prospects for better overall financial return (72.5 percent), the pressure of education and consumer debt and thus a need for higher income (20.0 percent), or a quest for better benefits (13.7 percent). Similarly, for those who selected professional development, the data delineate whether their interests focused on acquiring more challenging work (55.4 percent), better advancement potential (45.7 percent), or more client access (31.9 percent) among other factors. In this way, the study assists the profession in finding a focus on the nuances and details that constitute the priorities that are the most common factors in associate career decisions. ARE RECENT LATERAL ASSOCIATES’ EXPECTATIONS BEING MET IN THEIR NEW JOBS? In general, both associates and legal employers can take solace in the data that reveal a relatively high level of lateral associate satisfaction with their new jobs. Nearly half of the respondents reported that their law firm employers exceeded their expectations for collegiality, strategic business planning, leadership of practice groups and overall firm leadership. These data include analyses that provide differentiation of satisfaction relative to the job search method employed as well as by employer type and size, gender, graduating class year, minority status, practice area, and whether or not the associates’ first jobs were in law firms or other organizations. Ten factors often mentioned as “expectations” that associates hold relative to their work experiences were examined and a majority of the respondents reported that for each their expectations were met or exceeded. Only slightly more than 10 percent of the respondents expressed overall dissatisfaction with their new jobs. HOW LONG DO LATERAL ASSOCIATES EXPECT TO STAY WITH THEIR NEW (CURRENT) EMPLOYERS? The data provide interesting benchmark information on the expectations laterally hired attorneys have for remaining in their current jobs. Nearly three-quarters (70.9 percent) of the respondents expect to stay with their current employers for an indefinite or undetermined length of time, a finding that was less consistent among women, those graduating in 1996 or later, attorneys in transactional practices, and attorneys of color, where the percentage expecting to stay indefinitely was just over half (54.5 percent). This compares to anecdotal data collected from groups of entry-level associates in the 1997 NALP Foundation study Keeping the Keepers, who reported that they expected to remain in their jobs only about one year. WHAT METHODS DO LAW FIRMS USE TO RECRUIT AND HIRE LATERAL ASSOCIATES? For the first time, the NALP Foundation has undertaken an effort to examine the methods by which lateral associates are hired and, in doing so, document how hiring for various categories, such as practice area, gender, minority status, and graduation year, may be differentiated. Not unexpectedly, nearly one-third of the respondents reported that they had obtained their current job by means of self-initiated contact (35.3 percent) and another third by using the services of a search consultant (31.3 percent). Women were somewhat less likely than men to have obtained their job by self-initiated contact and were no more likely than men to have used a search consultant (31.9 percent and 30.7 percent respectively). LATERAL CAREERS MOVES MAY HAVE PERMANENCE There is no doubt that the paradigm shift that embraces lateral hiring in the legal profession is a phenomenon that has precipitated a plethora of changes, not the least of which is a dramatic increase in the cost of top legal talent. Law firms have also noted changes in organizational culture as experienced lawyers are assimilated into the firm, a changed circumstance from the cultural immersion that “homegrown” associates experience in firms. Moreover, law firms have come to realize that, as departing lawyers claim clients as their own, the firm’s client base and, thus, its financial stability may also be at risk. Still, the nuances of a market where lateral lawyers are the norm rather than the exception is not yet adequately understood nor fully accepted as a permanent reality. The tendency to consider “lateral lawyers” a passing fad — a temporary phenomenon that will retreat as the market slows and job options for junior lawyers become scarcer — lingers. Yet, if recent history offers the profession any lasting lessons, it suggests that another recession, particularly when viewed from the perspective of associates, would only further emphasize the merits of a lateral career path. Lateral lawyers represent a sea change in the profession. The change has been quick and comprehensive. Lateral career moves are now an integral element of the private practice business model and, as such, merit research and investment of resources so that both law firms and lateral hires can find optimal and mutual benefits from their employer�employee relationships. The findings and analysis in The Lateral Lawyer are provided as a thoughtful starting point for lawyers and their firms who want to better understand and harness the power of the lateral workforce, and to attain an improved level of recruitment and retention success in the lateral marketplace. Doing so is key to the future productivity and profitability of individual firms. Succeeding in the “war for talent” is a significant and essential threshold for every legal employer. It will affect the firm’s future ability to compete for highly visible and profitable business opportunities; to deploy the most highly skilled cadre of lawyers among competitors; to render exemplary client service; and to retain skilled lawyers to ensure the future of the firm. RELATED CHART Primary Factors Influencing Job Changes of Lateral Associates Paula Patton is Executive Director of The National Association for Law Placement (NALP). The publications cited above are from the NALP or the NALP Foundation for Research and Education.

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