Home to 80 degree Januaries, the lateral market has been equally hot in L.A. to start the year. The first six weeks of the year showed unmistakable improvement over last year and even bested 2012. The national lateral market is up 43% while the Los Angeles market is up 126% from 2013. Lateral Link alone is currently working with over 200 partners with aggregated practices north of $250,000,000.
The strong Los Angeles trend is highlighted by the recent move of John Shaffer into Quinn Emanuel’s bankruptcy practice. Shaffer, one of the nation’s preeminent restructuring lawyers, should bolster an already stacked Quinn Emmanuel office. Winston also just picked up two prominent partners, Eva Davis from Kirkland and Dan Passage from Bingham. Last, but not least, John Gatti left Stroock for Manatt. I predict a dozen or more significant moves over the next few months in Los Angeles alone.
Of these recent partner moves, nearly half of them practice litigation. Surprisingly only 12% of recent associate moves in the Los Angeles area are from corporate attorneys. The newest Beige Book cites an increased pressure on compensation for corporate associates. Nonetheless, the Beige Book also reveals that firms have seen steady growth over the last six weeks (ending with January 15th). Litigation and corporate practices saw a slight increase in demand while real estate continued to grow at a strong pace.
The Los Angeles market is unique. Most other markets have one or two hegemonic practices. For example, about 60% of Am Law 100 Corporate associates and partners practice in New York. Los Angeles is more of a mélange of top attorneys throughout many disciplines. One of its most prized practices—entertainment—only has a 42% market share in the Am Law 100—though the city is rife with top-notch entertainment boutiques. Furthermore the disparity between the offices of the Am Law 100 firms in New York and Los Angeles is not that great. Los Angeles offices are around 25% smaller than their respective New York offices. However, when corporate practice is excluded, this figure drops to 15%.
Although Los Angeles is the second largest legal market outside of New York measured by the number of attorneys in the market, the market for legal services itself is more middle market practice. This shifts the focus away from book of business (but not entirely) to culture fit and potential.
Los Angeles firms are diligent in their pursuit of partners who not only have the requisite business, but those who also fit in with the firm’s culture. That is why the Los Angeles market requires extra diligence (as do all) because lateral movements are not just a pairing of business, but also a meshing of personalities.