US law firms hired fewer lawyers in 2022 compared to the previous year, according to new data from the National Association for Law Placement (NALP). The decline was particularly notable among the largest firms, which saw a decrease in lateral hiring of almost 12% overall. This decline in lateral hiring is in sharp contrast to the previous year when it increased by 111%. The decline was largely driven by a major drop-off in demand for associates.

By contrast, lateral partner hiring increased almost 6%, while hiring of lawyers who are neither partners nor associates increased by nearly 10%. The sustained demand for lateral partners suggests that firms are seeking new books of business to combat decreased billable hours, said NALP executive director Nikia Gray.

The decline in lateral activity was particularly pronounced in New York and Boston, where competition for lawyers was especially stiff during the 2021 boom in demand for legal services. However, the overall lateral numbers don’t tell the whole story. While the largest firms saw the biggest decrease in lateral hiring, smaller firms with fewer than 250 lawyers increased lateral hiring across the board.

Associate lateral moves were up nearly 12% among those small and mid-sized firms, while partner moves increased 56%. It appears that these firms are taking advantage of the slowdown at larger firms to snap up talented junior lawyers. This trend could lead to a more competitive legal job market in the coming years, as smaller firms seek to establish themselves as attractive alternatives to the largest and most prestigious firms.