New Jersey firms and branches most actively hiring associates are targeting prospects with real-world experience—making it tougher for new graduates to get a foot in the door.

That’s the takeaway of a Law Journal survey finding that of the 210 associates recruited at 24 bellwether firms during the 2013 hiring year, 41.9 percent (88) were lateral hires. See chart.

Another 62 hires (29.5 percent) were without practice experience but still had completed postgraduate clerkships before joining their firms.

Together, laterals and former clerks accounted for 71.4 percent of the top 24 firms’ hires. Only 28.6 percent (60 associates) were hired out of law school.

Nine of the 24 firms hired more laterals than they did new grads or clerks.

And all but six hired more laterals and clerks combined than new grads.

“Every major firm in the country is doing the same thing,” says Abraham Reich, co-chairman of Philadelphia-based Fox Rothschild, which has about 160 lawyers in three New Jersey offices and struck a recruiting balance with eight grads, four clerks and nine laterals over the past two years.

Even Lowenstein Sandler in Roseland—while staying committed to its summer program—has made 15 lateral hires over the past two years. In 2012, its 13 lateral acquisitions were equal to its new grads and ex-clerks.

“Culturally, we like the mix of hiring folks who join us right out of law school as well as those who join us laterally,” says managing partner Gary Wingens.

Lowenstein typically targets laterals as subject-matter experts or to feed practice areas with faster-than-organic growth—needs best filled by senior associates and other experienced practitioners, Wingens says.

But old-fashioned law school recruiting has been the best way to amass a roster of effective junior- to mid-level associates, for whom there is a significant need in litigation practices. “We have not found a reliable substitute for that in the market,” Wingens says.

Reich, of Fox Rothschild, says law school recruiting remains a good strategy because it improves retention.

The “reality of the marketplace today” is that most first-year associates go in expecting to move within five years,” he says. “There isn’t a week that goes by that we’re not presented with an opportunity for lateral growth.”

David Garber, president of Princeton Legal Search Group, say associates may be more inclined to move because of extraordinary business-development demands and greater difficulty in making partner at large firms.

These days, success at a multinational Goliath is “not just about the billable hours. … It’s not just about being an exceptional lawyer,” he says.

Some actually will consider a pay cut if it means getting on the partner track, expanding the client pool with lower hourly rates and enjoying a better work-life balance, according to Garber.

“The firms that benefit from that, I think, are the home-grown New Jersey firms,” which tend to be midsized and easier commutes, he says.

Garber agrees that more firms are focusing on laterals to fill special needs and “are generally hiring in an opportunistic way.”

Law students should take heed, he adds. “The bottom line is, it [the data] emphasizes the need for real-world experience. You need to be establishing relationships with firms very early on.” Internships and lower-paying positions are viable means, he says.

In recent years, increasing numbers of firms have jettisoned their summer hiring programs—many of which developed a reputation for wining and dining rather than training.

Newark’s Gibbons was the first large N.J. firm to blaze that trail. Since discontinuing its summer program in 2003, the firm has required all new recruits to complete a clerkship before joining.

Largest Firms Take Lion’s Share

The top 24 firms’ 210 acquisitions accounted for nearly two-thirds of the 333 associates from 81 firms profiled in the Law Journal’s Associates Class of 2013, a magazine published in this issue.

Lowenstein leads with 21 total hires—16 new grads, three clerks and two laterals. Gibbons is second, with 13 total—zero grads, eight clerks and five laterals.

Tied for third with 12 hires each are: McElroy, Deutsch, Mulvaney & Carpenter in Morristown, Parker Ibrahim & Berg in Somerville and Sills Cummis & Gross in Newark. Combined, those three firms hired eight new grads, 15 clerks and 13 laterals.

Fox and Capehart & Scatchard in Mount Laurel are tied for sixth, each with 11 hires. Together they hired eight new grads, six clerks and eight laterals.

Rounding out the top half of the list are Connell Foley in Roseland, Day Pitney in Parsippany and Hartford, Conn., and Schwartz, Simon, Edelstein & Celso in Whippany, They’re tied at No. 10 with nine hires each—three new grads, seven clerks and 17 laterals.

Overall, hiring was up at the top 24. The 210 total was a 5.5 percent increase over 2012 total hires (199 associates). New graduates increased 20 percent (from 50); former clerks decreased 3.1 percent (from 64); and laterals increased 3.5 percent (from 85).

Fourteen of the 24 firms hired more associates in 2013 than they did in 2012.

The firms with the most total hires over a two-year span are: Lowenstein (47), Gibbons (31), Connell Foley (28), McElroy Deutsch (24), Day Pitney (23), Fox Rothschild, Riker Danzig (21 each), Sills Cummis (20), Capehart & Scatchard, Brach Eichler (18 each), Schwartz Simon and Genova Burns (16 each). •