Earlier this week, the National Law Journal released its annual ranking of the nation’s largest law firms ranked by lawyer headcount. Overall, the number of lawyers at NLJ 250 firms increased in 2011 by 2,132 lawyers for a total of 126,293, representing a 1.7% increase from last year. Not a huge gain, but the first since 2008, the year that saw the highest number of lawyers recorded by the survey.
A large part of the growth in the NLJ 250 headcount was due to two firms involved in large cross-border mergers last year, illustrating the continuing globalization of the legal industry. In January of last year, Squire Sanders combined with Hammonds (c. 500 lawyers) in the UK to create a 1,275-lawyer firm, which they grew later in the year with 80+ Perth-based lawyers from Minter Ellison. In the spring, DLA Piper combined with Australia’s DLA Phillips Fox (c. 600 lawyers) creating a firm with more than 4,000 lawyers, as we reported in MergerWatch.
However, as the survey points out, not all firms gained lawyers – 109 firms recorded declines in headcount – and the gains and losses were certainly not evenly distributed among types of lawyers, but definitely in keeping with the trends we’ve seen over the past few years. Associate headcount was down 1.3%, but the ranks of “other” lawyers (staff, Counsel or Of Counsel lawyers, but not contract or temporary lawyers) jumped by a whopping 17.2%, reflecting the increasing use of these types of lawyers that often cost firms less to employ and have more experience than associates. Equity partner ranks declined 1.6%, while the non-equity partner ranks grew by nearly 8%, a further indication that firms appear to be wary of expanding their equity partner ranks.
The 2011 Attorney Staffing Survey, conducted by the Hildebrandt Institute in collaboration with the Professional Development Consortium (“PDC”) and Georgetown University Law Center, saw similar results. The survey polled law firms on their attorney staffing models, including how law firms use non-partner track lawyers like staff and career attorneys. Nearly all of the respondents (97%) had some non-partner track lawyers, with counsel attorneys the most commonly used non-partner track position, followed by staff attorneys and finally career attorneys.
A number of firms indicated that staff attorneys were generally hired directly into the role and are not ever considered for partnership. As for compensation, 85% of staff attorneys make less than $150,000 while 74% of counsel attorneys make more than $200,000. Staff attorneys are the most recently established in some of the firms in the survey – nearly 30% of firms with staff attorneys report adopting the position within the past five years, perhaps indicating that law firms are shifting work to less expensive attorneys in response to an increasingly competitive market.
Posted by Marianne Purzycki