In recent years, blockbuster lateral moves have rippled through the legal industry, causing major shakeups at small and large firms alike.
The most recent mover is the approximately 4,000-lawyer DLA Piper, which in April added 27 private equity lawyers from the 300-lawyer Honigman to its ranks. The new group will be based in DLA’s Chicago office and consists of eight partners, with the balance of the attorneys being counsel and associates.
“So they know each other well and have a lot of current deals going on. The hope is by bringing the entire group, it can be fairly seamless,” said Joe Alexander, DLA Piper’s U.S. Vice Chairman, on the benefits of transitioning an entire group of attorneys in one fell swoop. “And in addition, we’re looking for capacity. The last 18 months have been a very busy time period. So it’s not only a matter of the group being able to help each other, but we’re always in the market for top-notch private equity lawyers because there’s need for capacity.”
Meanwhile, Honigman said it remains a “healthy, highly profitable” firm and is currently recruiting to support its corporate, private equity, and transactional practices. Together, these three practices have made nearly 80 hires over the last 18 months. The firm said it has experienced “record growth” in recent years and is “well-positioned” across its practices and in Chicago.
“We will have departures just like we will have arrivals,” Honigman said in a statement. “In today’s highly competitive environment, it is simply the nature of the beast for the legal industry.”
However, huge lateral moves like this are the source of much anxiety for smaller firms that would of course prefer to retain their highly profitable attorneys.
Susan Mendelsohn, a Chicago-based legal recruiter who worked on the DLA-Honigman move, said the group of attorneys fielded “extraordinary offers” from several firms trying to land their talent.
“Maybe the firms that need to merge aren’t merging, so larger, profitable groups are finding new homes within a larger platform that is more beneficial to their practice,” said Mendelsohn, theorizing on why we’re seeing so many large-scale lateral moves right now. “Because if you’re at a smaller firm, there is a ceiling to your growth, for sure.”
Whatever the reason for these major lateral moves, they’re keeping everyone in Biglaw on their toes and making smaller firms more than a little nervous.