The Laws of Supply and Demand Control Most Lateral Movements from Outside Regions
Ultimately, the movements of attorneys between markets are governed by the fundamental laws of supply and demand. These economic principles dictate the availability of opportunities and the feasibility of such transitions. In markets where there is a high demand for attorneys with specific skills or expertise but a low supply, law firms are more inclined to overlook the risks and costs associated with hiring from outside their market. Conversely, in markets saturated with legal professionals, firms have little incentive to look beyond their local talent pool, thereby constraining opportunities for attorneys seeking to move into these areas.
Understanding the dynamics of supply and demand in the legal profession is crucial for both law firms and attorneys. It guides firms in their strategic hiring decisions and helps attorneys identify where their skills might be most valued and where opportunities for successful lateral moves are most likely. This economic interplay forms the backdrop against which all movements in the legal job market occur, shaping the landscape of legal employment across different regions and specializations.
1. Many Law Firms Are Risk Averse in Hiring Attorneys from Other Markets Due to the Costs of Bringing in an Attorney from Another Market
It's important to understand that hiring attorneys from out of state or out of the market also comes with a certain amount of risk from a cost standpoint. If the attorney does not work out, the law firm will have an expense associated with hiring the attorney that they would not have if they hired locally or in-state. Law firms may need to pay for relocation expenses, for example. Additionally, law firms may have to pay for bar review classes and study time for the bar. Law firms also risk that the attorney may not pass the bar. Finally, law firms have the risk that the attorney hired may have issues that lead them to leave their last law firm.
A law firm that hires someone from another market takes a substantial risk that they would not necessarily have if they hired someone locally. Law firms have a considerable risk when hiring attorneys from other markets. For example, sometimes attorneys are moving because they may not be doing good work in their present law firm and have been asked to leave or have a runway to do so where they also will have access to voicemail and be on the website for a certain length of time. Therefore, a law firm may unwittingly hire someone else's liability. Additionally, there are cases where law firms hire someone with a substance abuse or other issue that they may be "running from." Some people with an addiction may believe that relocating to another market may help them stop a given substance abuse issue, but it often only ends up exacerbating this.
Often, attorneys may be leaving, or asked to leave, their new firms due to issues with consistent working hours or billing hours that need to be clarified. These mistakes can hurt law firms and make them lose money with lateral hires from other markets.
Another concern, of course, is that when an attorney relocates from a larger market to a less desirable, less cosmopolitan one without sufficient justification, they will leave when they can. If the target market is slow, the attorney may leave when the market gets busier. When the attorney goes, there is a cost associated with replacing them, the cost of lost work they could be doing for clients, and the cost to the morale of the attorneys left.
The cost of hiring an attorney from another market that does not work out can be substantial. In addition to the expenses associated with the move and the bar exam, there are other expenses. If the attorney is a litigator, they may be able to sign pleadings once they are admitted. They may also need to learn local rules. Attorneys in other practice areas may only be able to work on various matters or be billed as active members of a jurisdiction once admitted. Attorneys moving to other jurisdictions must pass the bar exam and may not. Attorneys moving may also need to take time off to study for the bar exam and not be paid while studying. The same attorneys may decide they are unhappy after the move and choose not to move and need to be replaced. Because the attorney is relocating from another market, the law firm that hires them may also need contacts in the new market that would help them get work done, develop business, and more. If they are relocating with a spouse, the spouse may not integrate into the new market with friends and other contacts, be unhappy, and leave. The new attorney will need more support. If the move is in the middle of the school year, the attorney's children and spouse may stay behind to finish school. In other cases, the attorney may need to sell the property. The attorney will need time off work to get new driver's licenses, transfer registrations of cars, search for a place to live, set up utilities, and more.
Law firms have a risk of moving people to a new market. Specific markets have a higher cost to drive people to and from than others. Law firms consider these costs when deciding whether to hire you. Some markets cost law firms more than others and present more risk.
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The point is that far from being a gift to the law firm because you are available to them, there is also a significant risk and cost to them that they would not necessarily have if they hired someone locally. While they may be able to hire someone with better experience from a better firm, not available in the current market—the risk of making this hire may outweigh the cost of doing so and not be worth it.
Most law firms would prefer to hire someone locally rather than someone relocating. If you are relocating to another market, it is essential that you keep in mind that law firms may not necessarily view this with the same level of enthusiasm you think they should. Many attorneys hired from other markets are likely to have reasons that the law firm believes they are likely to stay and not leave.
Specific markets are highly saturated with attorneys. Because these markets are highly saturated, law firms often have little incentive to hire attorneys from out of state, in particular, absent other specific extenuating circumstances. Examples of these markets include New York City, the largest markets in California (San Francisco, Los Angeles, Orange County, San Diego), Washington, DC, Florida, Texas, Chicago, Atlanta, and several other pockets.
New York City is one of the most obvious areas of the country with a lot of attorneys—so many—that law firms do not have much incentive to hire from outside of the city. There are attorneys in virtually every practice area and at every experience level in the city. There are so many attorneys that law firms can afford to be highly discriminating regarding the sort of attorneys they hire, even within the market. This market is also saturated with recruiters who will deliver any associate or counsel-level attorney most law firms seek in New York—because there are so many they can provide.
New York City is known as a "highly efficient market." Because of this efficiency, law firms do not need to bring in outside attorneys at most points in time because there is no reason for them to take on the risk of doing so. These law firms try to eliminate their risk by hiring the best attorneys they can, who are most likely to stay. a
For example, in large law firms in New York City, law firms have few incentives to hire these attorneys if someone is unemployed. Being unemployed could be a potential flag that the attorney was let go for performance reasons, had issues getting along with others, or was not committed enough to stay with the practice of law. Or, it could be for a relatively innocent reason that does not reflect poorly on the attorney who is unemployed at all.
Regardless of the reason, even if it is justifiable, law firms have few reasons to take a risk when the size of the city and the number of attorneys there provide them with a constant flow of attorneys who have the same experience and do not have any risk associated with hiring them.
Moreover, attorneys who went to the top 10 law schools, including Harvard, Chicago, New York University, and the like, are in such massive supply there that they are less special than they might be in a smaller market with few attorneys like them. Law firms that pay market rates, in particular, typically have their choice of attorneys to hire from these schools when they have openings.
Other markets have an equally ample supply of attorneys from all backgrounds and experience levels that make them in an ample supply. As mentioned, these markets include California, Florida, Texas, Chicago, Washington, DC, and most large cities throughout the United States. If you were a law firm in one of these markets and were faced with the choice between hiring someone from the current market and another, what would you do>
Washington, DC, for example, is the sort of market where attorneys think of moving all the time from out of state. When asked to choose alternative markets where they would consider working, more attorneys chose Washington, DC, than any other market.
They may be attracted to the market because it is easy to waive into the bar. Others may be interested in other aspects of living in the market. Regardless, Washington, DC, has one of the highest concentrations of attorneys anywhere. Law firms are only motivated to hire attorneys from other markets if they cannot find these attorneys elsewhere. A significant portion of the population in Washington, DC, comprises attorneys. There are so many attorneys there that law firms rarely have issues finding different types of attorneys.
Other markets with high concentrations of attorneys in all practice areas and seniority levels include Chicago, Florida, Texas, Atlanta, and California.
California has numerous top law schools, and Los Angeles County alone is one of the largest economies in the world. Moreover, Northern California also has many law schools and a substantial legal market, as does Orange County. San Diego also has a terrific climate and is a place many attorneys are eager to work in.
Each of these markets has numerous local attorneys, which are places where, when law firms have openings, they are likely to find people interested in them without having to resort to hiring attorneys from different markets.
In contrast, there are markets without a high concentration of attorneys. These markets may include many smaller ones and have few attorneys to fill the needs that law firms may have or could use them for.
For example, law firms in mid-sized markets may hire attorneys from larger markets with a shortage of those attorneys—or at least those with similar qualifications. Law firms in smaller markets may hire attorneys from middle-sized markets with few like them. This hiring makes sense because they can trumpet the qualifications of these attorneys to their clients and get more business or make their clients more comfortable with them.
There are also certain practice areas where law firms in smaller markets may need to hire attorneys from other markets occasionally because there are not enough attorneys to fill their needs. Some examples I have seen recently include:
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Law firms will often hire attorneys from other markets at various times when the demand for legal services vastly exceeds the local supply of attorneys.
There have been numerous aberrations of these rules at various points in history, both positively and negatively.
In California, for example, from approximately 1998 until around November of 2000, there were many corporate-related attorneys in Silicon Valley and San Francisco.
The demand was so strong because law firms were getting a ton of work from start-up companies in the technology and internet space, and the attorneys who were in law firms were flocking to companies instead of law firms because they had heard countless stories of attorneys getting rich quick with stock options. Instead of law firms in New York setting the highest market rate salaries for associate attorneys, the first increased salaries were set by a law firm, Gunderson Detmer, that raised the starting salaries for new attorneys by roughly 50% from what they were before.
There was so much legal work that law firms had difficulty holding onto their attorneys. Some major law firms would even interview attorneys doing corporate-related work for small law firms of less than ten people in smaller markets. For example, numerous corporate attorneys in smaller markets were brought to Silicon Valley to work in large firms.
Moreover, these same firms also hired attorneys without the bar exam, and some even used firm auditoriums to run large bar review classes for attorneys who moved to these markets. The demand for attorneys to do corporate work was so pronounced that I once had an attorney in town who went to a movie in San Francisco after a morning interview at a firm, and an advertisement for an attorney to work at a local tech firm came on the screen. After the movie, she stopped by the company, was hired on the spot, and told me she had accepted the offer and was no longer interested in the law firm she had interviewed with that morning.
However, this dynamic quickly changed, at which point there needed to be more attorneys with corporate backgrounds in these firms. By early 2001, these same firms ran out of work, and the law firms started letting entire classes of attorneys go, delaying hiring first-year associates, hiring first-year associates and then letting them all go within months, and not hiring any laterals at all, and giving the attorneys who remained horrible performance reviews to encourage them to leave.
The push for out-of-state attorneys was stopped in its tracks. In subsequent decades, this also stopped completely.
During the tech boom, a similar push in Silicon Valley for hard-sciences patent attorneys took off from 1998 through late 2000. This push slowed down in future years as more attorneys entered this practice area because of its former demand and subsequent ample supply.
Despite the slowdown in Silicon Valley/San Francisco for corporate attorneys in the early 2000s, and then in other periods such as 2007 and 2008-10, and to a lesser extent in 2022-2023, attorneys in these firms could often succeed by moving to markets where there was a limited supply of attorneys at certain points in time.
For example, law firms in Sacramento would often hire attorneys moving to that market from Silicon Valley when the market in Silicon Valley slowed down.
Similarly, law firms in Seattle had a shortage of corporate attorneys and would hire them from Silicon Valley after Silicon Valley slowed down. Most attorneys, however, do not understand how to engage in such market arbitrage. They try to move from one big market to another, often at odds with what will likely work in the market.
Silicon Valley attorneys may try to relocate to Los Angeles to do corporate-related work. As a general rule, corporate work is less in demand in Los Angeles than in Silicon Valley, and there are a lot of corporate attorneys in Los Angeles already, which obviates the need for law firms in Los Angeles to hire attorneys from Silicon Valley.
One of the most significant mistakes that attorneys make when the market conditions are such in large markets that it is difficult for them to get a position there is not relocating to markets with attorneys like them.
For example, an attorney in New York City having issues getting hired might try to move from there to upstate New York. Something I recommend to attorneys who are having problems getting hired in a given market, usually a large one, is to relocate to a smaller market they might be from, where a spouse is from, where they have a strong connection, or where they have connections. Instead of doing this, attorneys often try to stay in large markets where they are less employable, and law firms have different incentives for hiring them there.
Recently, there has been a huge demand for senior health science-related attorneys in large markets. These law firms are drawing in attorneys from out of state because there is are not enough of these attorneys in their market. This is being driven by complex healthcare-related work driven by a large jump in plaintiff-related work against healthcare companies needing interpretation by senior healthcare attorneys.
Law firms are unlikely to hire attorneys from other markets where there are cultural issues presented with hiring attorneys from other markets or other issues that make it unlikely, they will remain there if hired.
Markets like New York, Los Angeles, San Francisco, Houston, Chicago, and similarly large markets are sufficiently cosmopolitan and have diverse enough economies and people that they do not present the same challenges that many different markets may present.
Several markets have unique cultures and people that outsiders may view suspiciously and feel the need to be more fully integrated into the culture. Some of these markets include places like Savannah, Georgia, all parts of South Carolina; New Orleans, Grand Rapids, Michigan; Memphis, Tennessee; San Antonio, Texas; Richmond, Virginia; and other markets that have cultural similarities that make their populations sufficiently unique that it is difficult for people ever to feel entirely accepted in them.
For example, not too long ago, I was trying to assist an attorney who had moved from a larger market to Charleston, South Carolina. When she got there, she discovered that all of the attorneys in her small firm had attended the same high school. She also found that the attorneys were married, and many of their spouses were friends. Their children all attended the same schools and participated in sports together. The attorney was also single and all the partner attorneys in the firm were married. All these issues made her feel unwelcome and uncomfortable.
It is for reasons like this that law firms in these sorts of markets often only hire people from within the market. Outsiders simply never fully fit in, need to be trusted like they are in larger markets, and do not work out.
For example, an attorney from Los Angeles seeking a new job may apply to law firms in farming and less sophisticated legal markets like Fresno or Bakersfield. Law firms in these markets know that if an attorney relocates there from a more desirable or cosmopolitan market like Los Angeles, they are unlikely to stay absent some extenuating circumstances. The same goes for attorneys relocating there from New York City, Chicago, or Austin, Texas. A law firm in a smaller, less desirable market will only hire someone from a more sophisticated market if that attorney has a strong reason for being there and they are likely to stay—and is unlikely to not be accepted and integrated into the market due to cultural issues.
One of the most likely reasons an attorney would stay is if they grew up in that market and had family there. Attorneys often settle down where they are from to raise families and be close to their families. An attorney might move to a certain market to be close to their spouse's family. Other times, a strong interest in a particular extracurricular activity might take them to a specific market.
Attorneys are frequently hired in smaller markets when moving home because law firms believe they are likely to stay. Strong outside interests may bring them to a given market. I've seen a former professional skier relocate to Colorado and get hired because the law firm believed they might stay due to this interest. However, the most common reason law firms think they will stay is because they are from there.
Sometimes, attorneys can be hired from smaller markets into larger markets regardless of the number of attorneys in a given market. However, in these circumstances, the law firms hire them because there are specific reasons they believe they are likely to stay.
If an attorney in a smaller market like Detroit goes out of their way to take the New York Bar Exam while practicing law in Detroit and then applies to New York law firms, law firms in New York have every reason to believe the attorney will likely stay. New York is more cosmopolitan than Detroit. The work is more sophisticated. The law firms pay more money. People from New York typically do not move back to Detroit. Hiring someone from Detroit in New York is arguably a better bet, and someone is more likely to stay than an attorney from New York being hired in New York.
The same logic applies to law firms in California being hired after taking the California Bar Exam while in another state. These attorneys are likely to want to stay in California and then relocate back home to another market.
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The attorney's experience level also concerns whether a move is permissible between markets. Experience level is more pronounced and essential for attorneys trying to move to, or between, large markets than if they are trying to move to smaller markets or smaller law firms within a market.
Generally, the larger legal markets have a much more defined "up or out" system than law firms in smaller markets, but not always.
Due to the supply of attorneys in the largest markets, law firms typically limit the number of attorneys they hire as they get more senior—especially in the largest law firms.
As lawyers get more senior, they are expected to have business to support their higher billing rates, which are competitive with partners in the same firms—these law firms typically pay partners more for work they do themselves compared to work they give others, decreasing their incentives to provide more senior attorneys without business work.
Law firms also know that more senior attorneys will pressure them to make them partners, and they would prefer to hire midlevel attorneys (3 to 5/6 years of experience) who will not give them this pressure for several years instead of more senior attorneys. If the senior attorney does not believe there is a good chance they will be made a partner quickly, they may leave the law firm after a short period to go in-house or to another practice setting they believe is "safer" than the law firm and could let them go after a limited amount of time.
Finally, once an attorney gets more senior, they become competitive with other senior attorneys for partnership positions, and the law firms have a different incentive to hire them because it destroys the morale of the attorneys that have risen in seniority from younger attorneys.
Therefore, in larger markets with attorneys in a given practice area who are also senior, law firms have very little incentive to hire attorneys from other markets because there is too much risk and no incentive for hiring out-of-state attorneys. There are also more than enough attorneys with sufficient experience to replace the senior attorneys as mid-levels, so there is no incentive to hire senior attorneys. Within limits, most midlevel attorneys can do the same quality of work at a lower cost and with fewer issues than a senior attorney trying to get the same position.
Many law firms in large markets are already trying to push out attorneys with too much experience and have very little incentive to hire attorneys with lots of experience if there is already an oversupply of attorneys like this in the market.
Therefore, if a law firm hires an attorney in a large market relocating from another large market or a smaller market, the most likely hire is someone without much experience—a junior to midlevel attorney.
Junior attorneys with less than two years of experience are typically the least marketable because they still need to be trained entirely, require fair feedback, and have their hours written down in many firms.
A midlevel attorney with 3 to 6 years of experience, preferably 3 to 5 years of experience, typically does know what they are doing and does not need training and can work for several years before they get senior and get pushed out or asked to leave (if it looks like they are not partnership material and someone who will eventually get business). Therefore, attorneys relocating to large markets will be most attractive in all cases when they are midlevel associates instead of junior or senior associates.
In contrast to attorneys moving to larger markets, law firms in mid to smaller markets are more likely to find attorneys who are senior in some cases.
Law firms may need attorneys in different practice areas to do work. Some examples of this sort of work include corporate securities, ERISA-related work, some types of patent prosecution, and other kinds of work that may require high amounts of training that is unlikely to be done in that market. If an attorney has this training and the law firm has clients willing to pay for this work, law firms may hire senior attorneys regardless of whether they have business or not. A law firm in Detroit may hire a securities attorney in New York who is originally from Detroit and is a senior. A law firm in Texas may hire a specialized patent attorney who is senior. A law firm in Minneapolis may hire a senior ERISA attorney with a given type of experience.
Sometimes, partners experiencing issues in one market—even those who may have lost their jobs in a major market—may successfully relocate to a smaller market to rebuild their careers. An attorney who experiences issues and loses a job in Chicago for some reason (that could be quite negative—substance abuse, getting fired for alleged sexual harassment, for example) might then relocate and get hired in a smaller market like Minneapolis that is more willing to overlook issues if the attorney has sufficient business.
Lawyers with minimal experience—sometimes even less than a year—may lose their jobs in a large or midsized market and feel their careers are over. This is not the case. These attorneys can then relocate to many small markets and get multiple interviews. Because they have had such short tenures in their markets as attorneys, law firms do not yet look at them as established and are much more likely to take chances on them. I recently worked with an attorney who lost a position with less than six months of experience in San Francisco and successfully got interviews in numerous smaller markets—in Tennessee, Ohio, Connecticut, and several others. Had the attorney had more experience and no connections with those markets like this attorney, I highly doubt they would have gotten the interviews they did.
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BCG frequently ranks law firms based on prestige levels.
An attorney is much more likely to be able to move markets and get a position if they are attempting to move from a 5-firm to a 4-firm in another market or moving from a 4-firm to a 3-firm, for example. Law firms are much more likely to be interested in taking a chance on these sorts of attorneys because they have experience at firms that are more marketable than if they had been at a lesser type of law firm. This is precisely what happens.
When a lawyer is otherwise not marketable in their market for one reason or another, they often have more success when trying to relocate to law firms that are less prestigious than the ones they are at.
A crucial qualifier for this is that it is generally easier to move from a 5-firm in one market to a 4-firm in another than from a 3-firm to a 2-firm in another market.
Typically, 5-firms pay the same as 4-firms and do similar work, and therefore, any movement between these firms is a risk to the law firm hiring because the work and salary are not a significant step-down.
In contrast, attorneys moving from a 4 to a 3-firm are likely to be working for more midsized to smaller companies; the firm will most likely be smaller, the attorneys without the same qualifications as 4 and 5 firms, and the law firm will not pay as much as 4 and 5 firms. Therefore, the three firms face a substantial risk that the attorney relocating will be unhappy and not stay—hurting the morale of the existing attorneys, critiquing the work, and making everyone feel bad when they leave.
Law firms ranked a one or a two typically do not have as high hiring standards as those ranked 3, 4, or 5, and their clients are much smaller—and most likely to be individuals and not companies.
Because their hiring standards are lower, they do not have much incentive to hire from out of state or out of the market because there are plenty of attorneys without these qualifications in these markets anyway. There are local law schools or state law schools that produce more than enough lawyers for the local market. Because they have different hiring standards, as long as their pay is competitive with other smaller firms, it is relatively easy for them to find people to work there.
Most law firms in these markets have attorneys clamoring for lower-paying jobs requiring fewer qualifications than in larger markets.
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In conclusion, the dynamics of attorneys moving between markets are complex and multifaceted, deeply influenced by the interplay of supply and demand, experience levels, market size, and various risk factors associated with hiring practices. While larger markets offer more fluidity for attorneys to move in and out, smaller markets present unique opportunities and challenges, often requiring specific expertise or connections. The decision for law firms to hire from outside their immediate market is not taken lightly, considering the substantial risks and costs involved. These risks range from relocation expenses and adaptation to local market norms, to the potential for non-integration and unforeseen professional issues. Furthermore, cultural biases and the prestige level of the originating law firm play significant roles in these hiring decisions.
For attorneys considering a market move, it is crucial to understand these dynamics and recognize that while opportunities exist, they are often bounded by the realities of the legal market's demand and the law firm's risk tolerance. Success in transitioning between markets therefore requires a nuanced understanding of these factors, alongside a clear assessment of one's own skills, experience, and the ability to adapt to new environments. In essence, while the legal landscape offers a spectrum of opportunities for mobility, it demands a strategic approach, guided by both self-awareness and a deep understanding of the target market's characteristics.
Law firms have a risk of moving people to a new market. Specific markets have a higher cost to drive people to and from than others. Law firms consider these costs when deciding whether to hire you. Some markets cost law firms more than others and present more risk.
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A Summary of the Potential Costs Law Firms Face When Hiring Attorneys from Other Markets
- If you are relocating to a market where you need to pass the bar, there is a cost associated with bringing you on and a risk from doing so.
- If you are relocating to a market where the law firm has to pay for moving expenses, there is a cost for relocating you.
- If you are relocating to a market where you need to learn local rules that take you time to get up to speed, there is a cost to law firms relocating you.
- If you are relocating to a new market, the law firm may need to write off your hours while they get you up to speed on new matters and this is a cost to law firms.
- If you are relocating to a new market, the law firm may risk that the law firm you are coming from has different expectations for the quality of your work or exposes you to other sorts of matters than they are doing. If they are unfamiliar with the firm and its work quality, they may make a mistake hiring you that they would not if they hired an attorney locally from a firm they were more familiar with.
- If you are moving to a new firm in another market, there is a potential cost to the law firm of hiring you because you may not like working in the market and not stay—this is a potential cost. There is also a possible cost if you relocate to a market and your significant other does not like the market and wants to leave—so you go.
- If you relocate to a market where you do not have significant connections, there is also a potential cost to the firm that you will not stay in that market and relocate to a market where you have connections.
- If you are relocating to a new market and joining a firm that pays less or is less prestigious than firms you might be capable of getting a position with once settled there (after taking the bar exam and established yourself locally), the law firm risks you will not stay.
- If you are relocating to a market where you do not have significant connections, there is also a potential cost to the firm that you may be fleeing another market because of problems with your work or issues with your reputation in the market you are leaving. There is a risk and cost to the firm if you repeat the same behavior at the new firm, or they learn about this later.
- If you are leaving a market for another market, there is the potential loss of revenue to the firm you could get if you utilized a local network to generate business.
- If the law firm you are relocating to does not work out for you and is a smaller firm in the market, there is also the potential damage to client relationships and the morale of the attorneys remaining in the firm if you do not stay.
- If the client bonds with you and you have a good relationship with you there is a risk of harming that relationship if you leave. For example, your leaving may upset the client's relationship with the firm and make the firm look bad to the client because you did not stay. If you are leaving to go to a firm better suited to that client's type of business, the law firm risks that you will take that client with you.
The point is that far from being a gift to the law firm because you are available to them, there is also a significant risk and cost to them that they would not necessarily have if they hired someone locally. While they may be able to hire someone with better experience from a better firm, not available in the current market—the risk of making this hire may outweigh the cost of doing so and not be worth it.
Most law firms would prefer to hire someone locally rather than someone relocating. If you are relocating to another market, it is essential that you keep in mind that law firms may not necessarily view this with the same level of enthusiasm you think they should. Many attorneys hired from other markets are likely to have reasons that the law firm believes they are likely to stay and not leave.
2. Law Firms Will Not Hire Attorneys from Other Markets Where There Are a Sufficient Number of Attorneys in the Market, but Will Hire When There Are Not Enough Attorneys
Specific markets are highly saturated with attorneys. Because these markets are highly saturated, law firms often have little incentive to hire attorneys from out of state, in particular, absent other specific extenuating circumstances. Examples of these markets include New York City, the largest markets in California (San Francisco, Los Angeles, Orange County, San Diego), Washington, DC, Florida, Texas, Chicago, Atlanta, and several other pockets.
New York City is one of the most obvious areas of the country with a lot of attorneys—so many—that law firms do not have much incentive to hire from outside of the city. There are attorneys in virtually every practice area and at every experience level in the city. There are so many attorneys that law firms can afford to be highly discriminating regarding the sort of attorneys they hire, even within the market. This market is also saturated with recruiters who will deliver any associate or counsel-level attorney most law firms seek in New York—because there are so many they can provide.
New York City is known as a "highly efficient market." Because of this efficiency, law firms do not need to bring in outside attorneys at most points in time because there is no reason for them to take on the risk of doing so. These law firms try to eliminate their risk by hiring the best attorneys they can, who are most likely to stay. a
For example, in large law firms in New York City, law firms have few incentives to hire these attorneys if someone is unemployed. Being unemployed could be a potential flag that the attorney was let go for performance reasons, had issues getting along with others, or was not committed enough to stay with the practice of law. Or, it could be for a relatively innocent reason that does not reflect poorly on the attorney who is unemployed at all.
Regardless of the reason, even if it is justifiable, law firms have few reasons to take a risk when the size of the city and the number of attorneys there provide them with a constant flow of attorneys who have the same experience and do not have any risk associated with hiring them.
Moreover, attorneys who went to the top 10 law schools, including Harvard, Chicago, New York University, and the like, are in such massive supply there that they are less special than they might be in a smaller market with few attorneys like them. Law firms that pay market rates, in particular, typically have their choice of attorneys to hire from these schools when they have openings.
Other markets have an equally ample supply of attorneys from all backgrounds and experience levels that make them in an ample supply. As mentioned, these markets include California, Florida, Texas, Chicago, Washington, DC, and most large cities throughout the United States. If you were a law firm in one of these markets and were faced with the choice between hiring someone from the current market and another, what would you do>
Washington, DC, for example, is the sort of market where attorneys think of moving all the time from out of state. When asked to choose alternative markets where they would consider working, more attorneys chose Washington, DC, than any other market.
They may be attracted to the market because it is easy to waive into the bar. Others may be interested in other aspects of living in the market. Regardless, Washington, DC, has one of the highest concentrations of attorneys anywhere. Law firms are only motivated to hire attorneys from other markets if they cannot find these attorneys elsewhere. A significant portion of the population in Washington, DC, comprises attorneys. There are so many attorneys there that law firms rarely have issues finding different types of attorneys.
Other markets with high concentrations of attorneys in all practice areas and seniority levels include Chicago, Florida, Texas, Atlanta, and California.
California has numerous top law schools, and Los Angeles County alone is one of the largest economies in the world. Moreover, Northern California also has many law schools and a substantial legal market, as does Orange County. San Diego also has a terrific climate and is a place many attorneys are eager to work in.
Each of these markets has numerous local attorneys, which are places where, when law firms have openings, they are likely to find people interested in them without having to resort to hiring attorneys from different markets.
In contrast, there are markets without a high concentration of attorneys. These markets may include many smaller ones and have few attorneys to fill the needs that law firms may have or could use them for.
For example, law firms in mid-sized markets may hire attorneys from larger markets with a shortage of those attorneys—or at least those with similar qualifications. Law firms in smaller markets may hire attorneys from middle-sized markets with few like them. This hiring makes sense because they can trumpet the qualifications of these attorneys to their clients and get more business or make their clients more comfortable with them.
There are also certain practice areas where law firms in smaller markets may need to hire attorneys from other markets occasionally because there are not enough attorneys to fill their needs. Some examples I have seen recently include:
- Attorneys with specialized patent-prosecution expertise with PhDs in rare disciplines.
- Attorneys are practicing ERISA and Employee benefits, and few attorneys have this experience in the market.
- Attorneys are practicing healthcare transactional law.
- Securities law attorneys in smaller markets where the law firms do not have any local attorneys doing this sort of work they can hire.
- Trademark attorneys in smaller markets where there are not any local trademark attorneys.
See Related Articles:
- How to Advance Your Career By Relocating to Another Area of the Country as an Attorney: Are You Relocation Material?
- Boutique and Mid-Sized Law Firms Paying Big Law Salary Scale
- Why Representing Individuals without a Lot of Money Is Often Far More Lucrative, Secure, and a Much Better Career Path for Attorneys than Working for Large to Mid-Sized Law Firms?
3. Lateral Attorney Demand Is Controlled by the Economics in the Market
Law firms will often hire attorneys from other markets at various times when the demand for legal services vastly exceeds the local supply of attorneys.
There have been numerous aberrations of these rules at various points in history, both positively and negatively.
In California, for example, from approximately 1998 until around November of 2000, there were many corporate-related attorneys in Silicon Valley and San Francisco.
The demand was so strong because law firms were getting a ton of work from start-up companies in the technology and internet space, and the attorneys who were in law firms were flocking to companies instead of law firms because they had heard countless stories of attorneys getting rich quick with stock options. Instead of law firms in New York setting the highest market rate salaries for associate attorneys, the first increased salaries were set by a law firm, Gunderson Detmer, that raised the starting salaries for new attorneys by roughly 50% from what they were before.
There was so much legal work that law firms had difficulty holding onto their attorneys. Some major law firms would even interview attorneys doing corporate-related work for small law firms of less than ten people in smaller markets. For example, numerous corporate attorneys in smaller markets were brought to Silicon Valley to work in large firms.
Moreover, these same firms also hired attorneys without the bar exam, and some even used firm auditoriums to run large bar review classes for attorneys who moved to these markets. The demand for attorneys to do corporate work was so pronounced that I once had an attorney in town who went to a movie in San Francisco after a morning interview at a firm, and an advertisement for an attorney to work at a local tech firm came on the screen. After the movie, she stopped by the company, was hired on the spot, and told me she had accepted the offer and was no longer interested in the law firm she had interviewed with that morning.
However, this dynamic quickly changed, at which point there needed to be more attorneys with corporate backgrounds in these firms. By early 2001, these same firms ran out of work, and the law firms started letting entire classes of attorneys go, delaying hiring first-year associates, hiring first-year associates and then letting them all go within months, and not hiring any laterals at all, and giving the attorneys who remained horrible performance reviews to encourage them to leave.
The push for out-of-state attorneys was stopped in its tracks. In subsequent decades, this also stopped completely.
During the tech boom, a similar push in Silicon Valley for hard-sciences patent attorneys took off from 1998 through late 2000. This push slowed down in future years as more attorneys entered this practice area because of its former demand and subsequent ample supply.
Despite the slowdown in Silicon Valley/San Francisco for corporate attorneys in the early 2000s, and then in other periods such as 2007 and 2008-10, and to a lesser extent in 2022-2023, attorneys in these firms could often succeed by moving to markets where there was a limited supply of attorneys at certain points in time.
For example, law firms in Sacramento would often hire attorneys moving to that market from Silicon Valley when the market in Silicon Valley slowed down.
Similarly, law firms in Seattle had a shortage of corporate attorneys and would hire them from Silicon Valley after Silicon Valley slowed down. Most attorneys, however, do not understand how to engage in such market arbitrage. They try to move from one big market to another, often at odds with what will likely work in the market.
Silicon Valley attorneys may try to relocate to Los Angeles to do corporate-related work. As a general rule, corporate work is less in demand in Los Angeles than in Silicon Valley, and there are a lot of corporate attorneys in Los Angeles already, which obviates the need for law firms in Los Angeles to hire attorneys from Silicon Valley.
One of the most significant mistakes that attorneys make when the market conditions are such in large markets that it is difficult for them to get a position there is not relocating to markets with attorneys like them.
For example, an attorney in New York City having issues getting hired might try to move from there to upstate New York. Something I recommend to attorneys who are having problems getting hired in a given market, usually a large one, is to relocate to a smaller market they might be from, where a spouse is from, where they have a strong connection, or where they have connections. Instead of doing this, attorneys often try to stay in large markets where they are less employable, and law firms have different incentives for hiring them there.
Recently, there has been a huge demand for senior health science-related attorneys in large markets. These law firms are drawing in attorneys from out of state because there is are not enough of these attorneys in their market. This is being driven by complex healthcare-related work driven by a large jump in plaintiff-related work against healthcare companies needing interpretation by senior healthcare attorneys.
4. Some Law Firms May Not Hire from outside the Market Due to Cultural Biases Weighing In-Favor of Hiring Only Local Attorneys
Law firms are unlikely to hire attorneys from other markets where there are cultural issues presented with hiring attorneys from other markets or other issues that make it unlikely, they will remain there if hired.
Markets like New York, Los Angeles, San Francisco, Houston, Chicago, and similarly large markets are sufficiently cosmopolitan and have diverse enough economies and people that they do not present the same challenges that many different markets may present.
Several markets have unique cultures and people that outsiders may view suspiciously and feel the need to be more fully integrated into the culture. Some of these markets include places like Savannah, Georgia, all parts of South Carolina; New Orleans, Grand Rapids, Michigan; Memphis, Tennessee; San Antonio, Texas; Richmond, Virginia; and other markets that have cultural similarities that make their populations sufficiently unique that it is difficult for people ever to feel entirely accepted in them.
For example, not too long ago, I was trying to assist an attorney who had moved from a larger market to Charleston, South Carolina. When she got there, she discovered that all of the attorneys in her small firm had attended the same high school. She also found that the attorneys were married, and many of their spouses were friends. Their children all attended the same schools and participated in sports together. The attorney was also single and all the partner attorneys in the firm were married. All these issues made her feel unwelcome and uncomfortable.
It is for reasons like this that law firms in these sorts of markets often only hire people from within the market. Outsiders simply never fully fit in, need to be trusted like they are in larger markets, and do not work out.
For example, an attorney from Los Angeles seeking a new job may apply to law firms in farming and less sophisticated legal markets like Fresno or Bakersfield. Law firms in these markets know that if an attorney relocates there from a more desirable or cosmopolitan market like Los Angeles, they are unlikely to stay absent some extenuating circumstances. The same goes for attorneys relocating there from New York City, Chicago, or Austin, Texas. A law firm in a smaller, less desirable market will only hire someone from a more sophisticated market if that attorney has a strong reason for being there and they are likely to stay—and is unlikely to not be accepted and integrated into the market due to cultural issues.
One of the most likely reasons an attorney would stay is if they grew up in that market and had family there. Attorneys often settle down where they are from to raise families and be close to their families. An attorney might move to a certain market to be close to their spouse's family. Other times, a strong interest in a particular extracurricular activity might take them to a specific market.
Attorneys are frequently hired in smaller markets when moving home because law firms believe they are likely to stay. Strong outside interests may bring them to a given market. I've seen a former professional skier relocate to Colorado and get hired because the law firm believed they might stay due to this interest. However, the most common reason law firms think they will stay is because they are from there.
Sometimes, attorneys can be hired from smaller markets into larger markets regardless of the number of attorneys in a given market. However, in these circumstances, the law firms hire them because there are specific reasons they believe they are likely to stay.
If an attorney in a smaller market like Detroit goes out of their way to take the New York Bar Exam while practicing law in Detroit and then applies to New York law firms, law firms in New York have every reason to believe the attorney will likely stay. New York is more cosmopolitan than Detroit. The work is more sophisticated. The law firms pay more money. People from New York typically do not move back to Detroit. Hiring someone from Detroit in New York is arguably a better bet, and someone is more likely to stay than an attorney from New York being hired in New York.
The same logic applies to law firms in California being hired after taking the California Bar Exam while in another state. These attorneys are likely to want to stay in California and then relocate back home to another market.
See Related Articles:
- What is Bar Reciprocity and Which States Allow You to Waive Into the Bar?
- Why Relocating to a Different Market Is the Greatest (But Little Known) Way for a Law Firm Attorney to Get Ahead in the Legal Profession
- Top 10 Reasons Attorneys Should Look at Multiple Markets in Their Job Search
5. Law Firms Will Require Lateral Attorneys Have a Given Level of Experience Depending on the Size of the Market
The attorney's experience level also concerns whether a move is permissible between markets. Experience level is more pronounced and essential for attorneys trying to move to, or between, large markets than if they are trying to move to smaller markets or smaller law firms within a market.
Generally, the larger legal markets have a much more defined "up or out" system than law firms in smaller markets, but not always.
Due to the supply of attorneys in the largest markets, law firms typically limit the number of attorneys they hire as they get more senior—especially in the largest law firms.
As lawyers get more senior, they are expected to have business to support their higher billing rates, which are competitive with partners in the same firms—these law firms typically pay partners more for work they do themselves compared to work they give others, decreasing their incentives to provide more senior attorneys without business work.
Law firms also know that more senior attorneys will pressure them to make them partners, and they would prefer to hire midlevel attorneys (3 to 5/6 years of experience) who will not give them this pressure for several years instead of more senior attorneys. If the senior attorney does not believe there is a good chance they will be made a partner quickly, they may leave the law firm after a short period to go in-house or to another practice setting they believe is "safer" than the law firm and could let them go after a limited amount of time.
Finally, once an attorney gets more senior, they become competitive with other senior attorneys for partnership positions, and the law firms have a different incentive to hire them because it destroys the morale of the attorneys that have risen in seniority from younger attorneys.
Therefore, in larger markets with attorneys in a given practice area who are also senior, law firms have very little incentive to hire attorneys from other markets because there is too much risk and no incentive for hiring out-of-state attorneys. There are also more than enough attorneys with sufficient experience to replace the senior attorneys as mid-levels, so there is no incentive to hire senior attorneys. Within limits, most midlevel attorneys can do the same quality of work at a lower cost and with fewer issues than a senior attorney trying to get the same position.
Many law firms in large markets are already trying to push out attorneys with too much experience and have very little incentive to hire attorneys with lots of experience if there is already an oversupply of attorneys like this in the market.
Therefore, if a law firm hires an attorney in a large market relocating from another large market or a smaller market, the most likely hire is someone without much experience—a junior to midlevel attorney.
Junior attorneys with less than two years of experience are typically the least marketable because they still need to be trained entirely, require fair feedback, and have their hours written down in many firms.
A midlevel attorney with 3 to 6 years of experience, preferably 3 to 5 years of experience, typically does know what they are doing and does not need training and can work for several years before they get senior and get pushed out or asked to leave (if it looks like they are not partnership material and someone who will eventually get business). Therefore, attorneys relocating to large markets will be most attractive in all cases when they are midlevel associates instead of junior or senior associates.
In contrast to attorneys moving to larger markets, law firms in mid to smaller markets are more likely to find attorneys who are senior in some cases.
Law firms may need attorneys in different practice areas to do work. Some examples of this sort of work include corporate securities, ERISA-related work, some types of patent prosecution, and other kinds of work that may require high amounts of training that is unlikely to be done in that market. If an attorney has this training and the law firm has clients willing to pay for this work, law firms may hire senior attorneys regardless of whether they have business or not. A law firm in Detroit may hire a securities attorney in New York who is originally from Detroit and is a senior. A law firm in Texas may hire a specialized patent attorney who is senior. A law firm in Minneapolis may hire a senior ERISA attorney with a given type of experience.
Sometimes, partners experiencing issues in one market—even those who may have lost their jobs in a major market—may successfully relocate to a smaller market to rebuild their careers. An attorney who experiences issues and loses a job in Chicago for some reason (that could be quite negative—substance abuse, getting fired for alleged sexual harassment, for example) might then relocate and get hired in a smaller market like Minneapolis that is more willing to overlook issues if the attorney has sufficient business.
Lawyers with minimal experience—sometimes even less than a year—may lose their jobs in a large or midsized market and feel their careers are over. This is not the case. These attorneys can then relocate to many small markets and get multiple interviews. Because they have had such short tenures in their markets as attorneys, law firms do not yet look at them as established and are much more likely to take chances on them. I recently worked with an attorney who lost a position with less than six months of experience in San Francisco and successfully got interviews in numerous smaller markets—in Tennessee, Ohio, Connecticut, and several others. Had the attorney had more experience and no connections with those markets like this attorney, I highly doubt they would have gotten the interviews they did.
See Related Articles:
- The Degree of Flexibility with Experience Requirements in Law Job Listings
- How Much Attention Should Attorneys Pay to the Level of Experience a Law Firm is Seeking in Job Postings?
- The 7 Steps Attorneys with 5+ Years of Law Firm Experience Must Take to Save Their Legal Careers
6. Law Firms Hiring Lateral Attorneys Are Relocating from Firms of a Certain Prestige Level Depending on a Variety of Factors
BCG frequently ranks law firms based on prestige levels.
- The most prestigious law firms that hire the best of the best are 5s. These firms serve the largest clients on the most important matters.
- The next most prestigious, most typically AmLaw firms with high hiring standards and the best boutiques, are ranked 4s. These law firms serve large to mid-sized clients on most of their matters.
- Law firms ranked 3s often service middle market clients, and sometimes smaller. They're typical clients and businesses with smaller budgets than a 4 or 5 firm would charge.
- Law firms ranked two typically service smaller businesses with limited budgets and individuals with some money to spend, but less than three firms, for example.
- Law firms are typically ranked as ones that service individuals with the most limited budgets.
An attorney is much more likely to be able to move markets and get a position if they are attempting to move from a 5-firm to a 4-firm in another market or moving from a 4-firm to a 3-firm, for example. Law firms are much more likely to be interested in taking a chance on these sorts of attorneys because they have experience at firms that are more marketable than if they had been at a lesser type of law firm. This is precisely what happens.
When a lawyer is otherwise not marketable in their market for one reason or another, they often have more success when trying to relocate to law firms that are less prestigious than the ones they are at.
A crucial qualifier for this is that it is generally easier to move from a 5-firm in one market to a 4-firm in another than from a 3-firm to a 2-firm in another market.
Typically, 5-firms pay the same as 4-firms and do similar work, and therefore, any movement between these firms is a risk to the law firm hiring because the work and salary are not a significant step-down.
In contrast, attorneys moving from a 4 to a 3-firm are likely to be working for more midsized to smaller companies; the firm will most likely be smaller, the attorneys without the same qualifications as 4 and 5 firms, and the law firm will not pay as much as 4 and 5 firms. Therefore, the three firms face a substantial risk that the attorney relocating will be unhappy and not stay—hurting the morale of the existing attorneys, critiquing the work, and making everyone feel bad when they leave.
Law firms ranked a one or a two typically do not have as high hiring standards as those ranked 3, 4, or 5, and their clients are much smaller—and most likely to be individuals and not companies.
Because their hiring standards are lower, they do not have much incentive to hire from out of state or out of the market because there are plenty of attorneys without these qualifications in these markets anyway. There are local law schools or state law schools that produce more than enough lawyers for the local market. Because they have different hiring standards, as long as their pay is competitive with other smaller firms, it is relatively easy for them to find people to work there.
Most law firms in these markets have attorneys clamoring for lower-paying jobs requiring fewer qualifications than in larger markets.
See Related Articles:
- Understanding Law Firm Rankings through the BCG Attorney Search Model
- How BCG Attorney Search Ranks Law Firms
- How to Easily Determine the Best Attorneys and Law Firms: The Five Prestige Levels of Attorneys and Law Firms
Conclusions
In conclusion, the dynamics of attorneys moving between markets are complex and multifaceted, deeply influenced by the interplay of supply and demand, experience levels, market size, and various risk factors associated with hiring practices. While larger markets offer more fluidity for attorneys to move in and out, smaller markets present unique opportunities and challenges, often requiring specific expertise or connections. The decision for law firms to hire from outside their immediate market is not taken lightly, considering the substantial risks and costs involved. These risks range from relocation expenses and adaptation to local market norms, to the potential for non-integration and unforeseen professional issues. Furthermore, cultural biases and the prestige level of the originating law firm play significant roles in these hiring decisions.
For attorneys considering a market move, it is crucial to understand these dynamics and recognize that while opportunities exist, they are often bounded by the realities of the legal market's demand and the law firm's risk tolerance. Success in transitioning between markets therefore requires a nuanced understanding of these factors, alongside a clear assessment of one's own skills, experience, and the ability to adapt to new environments. In essence, while the legal landscape offers a spectrum of opportunities for mobility, it demands a strategic approach, guided by both self-awareness and a deep understanding of the target market's characteristics.
