Article in Law Journal Newsletter Jonathan Friedman

The Lateral Market Is Hot: How Leading Firms Build the Right Support Structure

The article was originally published to ALM’s Law Journal Newsletter

There is a statistic that baseball fans know in their bones: a hitter who succeeds three times out of ten is bound for the Hall of Fame, and seven failures out of ten is the very standard of greatness. It is a forgiving way to keep score, and for baseball it works beautifully.

It is also, uncomfortably, close to how our industry has learned to think about lateral hiring, where landing three good partners out of ten counts as a strong season and more than half are quietly expected to underperform or leave.

The difference, of course, is that a law firm is not a batting lineup and a failed lateral is not a strikeout you shake off before the next at-bat. It is a seven-figure bet that did not pay, a destabilized team, and a book of business that walked back out the door.

The firms making those bets are making more of them than they have in years. The U.S. lateral market grew for a second straight year in 2025, with overall lateral hiring up 16.4 percent and lateral partner hiring up 17.8 percent, according to NALP, while Global Legal Post reports that lateral partner moves reached a five-year high of 3,009 hires, up ten percent year over year, with litigation partners leading the way at 26 percent of all moves. By any measure, the market is the hottest it has been in five years.

Bringing in the rainmaker is the visible move; resourcing that rainmaker to actually succeed is the one that determines whether the hire ever pays off, and it is precisely where most firms fall short. The firms that have stopped accepting baseball odds are the ones that came to understand that the miss rate was never really about the talent — it was about everything that happens after the offer is signed.

The hot market, and what it obscures

Firms grow by winning rainmakers. That is true, and it is also incomplete, because the headline numbers describe the acquisition and say nothing about whether the acquisition holds. The counter-data is sobering, and it is worth sitting with.

Roughly half of lateral partners underperform or leave within five years; LMA research puts the share who fail to deliver their promised book of business at 62 percent and finds that 35 percent never fully integrate into the firm at all. This is happening even as some firms, as ABA Law Practice Magazine notes, now require a portable book of $12 million before they will so much as open a conversation. The bet keeps getting more expensive while the success rate refuses to keep pace.

The reframe that should change how leadership thinks about all of this is that these failures are rarely about legal ability. The lawyers a firm recruits are, almost by definition, capable lawyers. What goes wrong is integration and support structure, and as the LMA data makes plain, firms invest heavily in recruitment and far less in everything that follows the signature. A lateral who lands on thin infrastructure becomes a liability rather than an asset, which is why growth, properly understood, is not a hiring question at all. It is a whole-firm staffing question.

The support structure that turns lawyers into revenue

A lateral’s book of business does not transfer on its own. Each of the functions below is a juncture at which the promised revenue either materializes or quietly leaks away, and the failures the data describes — the books that never arrive, the partners who never settle in — tend to happen in these gaps rather than in the courtroom.

Business Development is how the book actually moves. A lateral’s clients follow through introductions, repositioning in an unfamiliar market, pitch support, and renewed visibility, and every piece of that is the work of a Business Development team. It is telling that the firms most satisfied with their revenue growth are, as Above the Law observes, precisely the ones that track the leading indicators of lateral success — internal and external networking, referral activity, the early relationship-building that signals a transition is taking hold.

Without that engine running underneath the hire, the clients a firm paid handsomely to acquire never make the jump, and the result is the 62 percent who fail to deliver their book: not a failure of the lawyer, but a failure to move what the lawyer brought with them.

Finance is where a portable book is either welcomed or fumbled in the first weeks. A lateral arriving with clients needs clean conflicts clearance, fast matter setup, and accurate billing from day one, and the friction that undermines all three — slow client onboarding, billing errors, an intake process that feels improvised — is exactly what prompts a portable client to reconsider following. The team that converts billable work into cash flow is, in those opening weeks, also the team quietly telling a lateral’s clients whether this firm has its act together.

Legal Operations determines whether a lateral can service the book at all, because none of it matters if they cannot get into the systems, migrate their files, or run the matter. The opening stretch, when the transferred relationships are at their most fragile, is the worst conceivable time for downtime. Technology is steadily reshaping how leaner firms run their support functions, and as both the Bureau of Labor Statistics and Reuters have documented, the firms pulling ahead are the ones investing in both the technology and the people to run it rather than cutting to the bone and hoping it holds.

Human resources is what allows a lateral to deliver as part of a team rather than alone, since the associates and assistants around a partner are what let the book actually get serviced. When HR cannot staff that team — and in a market where support roles turn over constantly, the Bureau of Labor Statistics counts roughly 39,300 paralegal openings a year driven largely by departures — the partner becomes a bottleneck and the book stalls behind them.

Administrative staff are where transferred clients ultimately decide whether they feel taken care of or feel the drop-off, because day-to-day execution, responsiveness, and the experience that begins the moment someone steps off the elevator are what turn a tentative client follow into a retained relationship. It is worth remembering that law firms remain the largest employer of the roughly 376,200 paralegals and legal assistants working nationally, again per the Bureau of Labor Statistics — the people who keep a lateral’s matters and client touchpoints moving every single day.

Why leading firms get this right

The firms that consistently win build the support structure ahead of, or in step with, their lateral hiring, bringing people in to a plan rather than into a gap. Landing the hire is a visible win, and too often it is exactly where the effort stops; the predictable consequence, as LawVision has described, is laterals who underperform, leave early, or destabilize the very teams they joined.

When the support infrastructure turns over, lawyer productivity falls with it, and the divide between firms is widening rather than narrowing. As Reuters has reported, larger firms have expanded headcount and compensation while leaning on technology to thin their support staff, which only sharpens the gap between the elite firms and everyone else. The firms that win treat their support structure as a deliberate investment rather than a cost to be trimmed, applying the same rigor to staffing the structure around a lateral that they apply to recruiting the lateral in the first place — an argument the ABA has made at length in its work on integration.

Building the structure deliberately

The practical takeaway follows naturally: Business Development, Finance, Legal Operations, human resources, and administrative hiring should be treated as revenue investments rather than overhead. Sequence matters as much as spend, because the support staff and systems that make a lateral productive belong in the plan alongside the hire, not bolted on afterward, and the integration data is in effect a running record of what happens when they are an afterthought.

Smaller and mid-size firms have a genuine opening here. The 2025 surge, as NALP documents, was led by firms of 250 or fewer lawyers, where overall hiring rose roughly 44 percent and partner hiring jumped 88.7 percent, and the firms in that group that build structure to match their ambition will out-compete on the single dimension the data says matters most, which is integration.

The firms that win are the ones staffing their entire growth engine — the business professionals and staff across Business Development, Finance, Legal Operations, human resources, and administration — with lawyer recruiting understood as one piece of a much larger picture.

The bottom line

The lateral market will stay hot well into 2026. Three-for-ten will keep any hitter in Cooperstown, but it is no way to run a growth strategy, and the winners over the next two years will not simply be the firms that land the rainmakers. They will be the firms that built the support structure to make those hires pay off, because hiring the driver has never been the same thing as building the engine.

 

 

Sources

Jonathan Friedman is the founder and managing principal of Friedman Williams, a legal talent advisory firm specializing in C-suite and senior professional staff search for law firms and professional services organizations.

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