LA Law Firms Surge: Lateral Hires Fueling Unprecedented Growth

Post-Pandemic Boom Sees Firms Expand Dramatically Through Strategic Acquisitions and Talent Poaching

Los Angeles’ legal landscape is experiencing a significant boom, with law firms reporting robust expansion and a dynamic market for attorney recruitment since the COVID-19 pandemic began. This surge is driven by a combination of aggressive lateral hiring and strategic firm growth, reshaping the city’s legal services sector.

Lateral Movement Reaches Fever Pitch

The movement of attorneys, from partners to associates, has been described as ranging from “strong” to “red-hot” in recent years. This trend is fueled by both established firms looking to bolster their practices and new entrants seeking to establish a foothold in the competitive Los Angeles market. Firms from outside the region continue to actively seek real estate and talent here, while local consolidations and rebranding efforts remain a constant.

Perrie Weiner, who spearheaded the establishment of global giant Baker McKenzie’s Century City office in 2018, noted the remarkable trajectory of the firm’s expansion. What began with just four attorneys has blossomed into an operation with over 70 employees, including 48 lawyers.

“When I originally joined, L.A.’s a really rough market, so success would have been 15-20 lawyers in three to four years,” Weiner said. “We ended up blowing past that and moving locations here twice. We have every major practice area of the firm represented here.”

Growth strategies vary, encompassing organic development favored by newer firms and more impactful market entries through the acquisition of entire practice groups or mergers with existing local entities. Chris Frost, founder of the litigation-focused Frost LLP, commented on the current climate.

“It’s a buyer’s market,” Frost observed. “My impression is that firms are looking to grow from the lateral market and are getting tired of just raising talent straight out of law school.”

Top Firms See Dramatic Headcount Increases

A comparison of recent Business Journal lists highlights significant gains in L.A. County law firm headcounts. The top 50 fastest-growing firms by raw numbers saw an average increase of 25 attorneys between 2022 and the current reporting period, growing from an average of 69 to 94 lawyers.

Larger firms have consistently expanded, with eight of the top ten firms for raw growth having more than 52 attorneys in 2022 and adding between 34 and 61 lawyers since. Nine firms that exceeded 100 attorneys in 2022 now count 15 such entities.

Baker McKenzie’s Los Angeles office also made both the raw and percentage growth lists. Its headcount jumped from 33 lawyers to 48, largely due to the strategic addition of a 17-person transaction team that moved from Munger Tolles & Olson.

“I knew it was imperative to have a private equity and an M&A practice in Los Angeles that would mirror what we had in Northern California and globally,” Weiner recalled. “Munger Tolles is a venerable L.A.-based firm with elite lawyers and an elite practice group in private equity, M&A and tax.”

Record-Breaking Percentage Growth for Emerging Firms

Smaller and newer firms often lead in percentage growth. Glendale-based D.Law, specializing in wage and hour class actions, exemplifies this, growing from three attorneys in 2022 to 40—a remarkable 1,233% increase. This expansion followed the firm’s acquisition of a partner firm in 2023, signaling a shift toward litigating its own cases.

Leading the pack in absolute growth was Quinn Emanuel Urquhart & Sullivan, adding 61 attorneys. Willkie Farr & Gallagher followed with 50, Goodwin with 49, Wilson Elser Moskowitz Edelman & Dicker with 42, and Gibson, Dunn & Crutcher with 39.

Willkie Farr & Gallagher’s expansion has been particularly swift, having entered the Los Angeles market only about six months before the 2022 list was published. The firm’s growth has included absorbing multiple lateral teams, such as a three-attorney real estate group from Munger Tolles in 2022. Despite losing these teams, Munger Tolles itself grew from 142 to 160 attorneys.

According to a 2023 report by the National Association for Legal Career Professionals (NALP), 70.4% of associates graduating in 2023 accepted jobs at firms with more than 100 attorneys, indicating a continued demand for talent in larger firms.

Mergers and Strategic Acquisitions Drive Market Entry

Mergers and acquisitions remain a primary method for firms, particularly those based on the East Coast, to enter the Los Angeles market. Recent examples include Saul Ewing’s merger with Freeman Freeman & Smiley, Spencer Fane’s integration with Pahl & McCay, and Michael Best & Friedrich’s acquisition of O&A P.C.

Existing firms have also grown through internal mergers. Clark Hill combined with Barton Klugman & Oetting, Morrison Foerster brought in Durie Tangri, and Womble Bond Dickinson merged with Lewis Roca, which represented the tenth largest percentage increase on the recent list.

Stradley Ronon Stevens & Young established a Long Beach presence by recruiting a 10-attorney team from Keesal Young & Logan. Perrie Weiner of Baker McKenzie emphasized the importance of strategic integration for mergers to be successful.

“Acquiring a small firm makes it easier than doing it with a few people at a time, but it has to be a firm that scales with what you’re offering,” Weiner explained. “We’re focused on strategic acquisitions of practice groups that make sense in a big firm context and we’re very careful about the integration process as well.”

Weiner also noted that while large-scale mergers are effective for certain practice areas like private equity and M&A, boutique and mid-size firms will continue to thrive in Los Angeles. The city’s market, he believes, remains more of a middle-market economy compared to larger hubs like New York, fostering closer, more personal client relationships that often lead lawyers to move away from larger firms to escape perceived rate sensitivity.