City law firms' increasingly flexible work-from-home policies are making it more difficult for suburban firms to recruit Big Law talent, according to a recent article by Law360. This trend is disrupting the long-standing practice of Connecticut firms attracting New York-trained talent by providing offices closer to home. Lawyers who previously left big cities are no longer moving to Connecticut and neighboring states. This also has the reverse effect of contributing to a statewide brain drain, as flexible policies enable local attorneys to seek out-of-state employment and big market salaries while working from the comforts of suburbia.
Using Leopard Solutions’ market-level data, we aimed to determine whether trends were genuinely declining for Connecticut or if recent setbacks were due to isolated events. We began by examining starting salaries. According to a recent survey of Gen-Z junior associates, compensation was the driving factor for selecting their current firm for just over two-thirds of participants (67%). The average entry-level salary among 10 Am Law 200 firms operating in Connecticut, across 17 offices, is $174K, with a median of $160K. For the eight small and midsize firms in the state that we track, the average salary is $134,967, with a median of $125K. By comparison, the average starting salary at Am Law 200 firms with New York offices is $200,971, with a median of $215K. Non-Am Law firms in New York have an average entry-level salary of $153,790 and a median of $150K. These figures indicate that Connecticut firms are operating at a competitive deficit.
Next, we examined lateral movement, job activity, and migration patterns. For lateral hires, the number of associates, partners, and counsel joining Am Law 200 firms in Connecticut decreased from 25 this time last year to 17. The decline was more pronounced for total open positions for associates, partners, and counsel at Am Law 200 firms in Connecticut, which dropped by 21% over two years, from 122 in June 2022 to 96 currently. Migration data over the past 12 months reveals that BigLaw attorneys who left for other firms are relocating beyond the tri-state area, extending as far west as California and as far south as Louisiana.
Finally, we conducted an in-depth analysis of lateral hires by practice area to identify which areas were declining and which, if any, could be the basis for a growth case study for future recruitment pitches. Among the Am Law 200 firms in the state, seven out of 13 tracked practice areas experienced more lateral departures than additions over the past year. Overall, 70 lawyers departed while 50 joined, resulting in a net loss of 20. IP, Insurance, and Bankruptcy law saw the largest declines among non-litigation and non-corporate practices. ERISA-C&B and Real Estate were the few areas that exhibited net positive growth.
To avoid becoming a cautionary tale, midsize firms should consider raising billable fees to increase profits, counter sunk costs, and enhance revenue. This would enable them to pay competitive wages and avoid losing talent to larger firms. The key is not raising the billable hour requirement in conjunction. Associates would trade compensation for fewer billable hour requirements. However, most midsize firms could raise the billable hour fee without much pushback. They should also reinvest profits in generative AI and cloud-based solutions. Studies show that firms using collaborative tools and efficiency software get paid faster, collect more money, and bill more hours. Building a strong culture is paramount to maintaining a high retention rate, as is outside-the-box recruitment—such as steering clear of the same universities that produce highly poachable classes and avoiding overcompensated rainmakers who might eventually decamp with clients in tow in favor of cultivating a deep bench.
