For the first time in recent memory, U.S. law firms are bringing in more attorneys with prior practice experience than graduates straight from law school. What’s more, recent hiring data points to a deliberate restructuring of associate pipelines, rather than a temporary correction like those seen during the pandemic years.
Experience Over Diplomas
Firm Prospects is a legal intelligence platform that tracks hiring across roughly 4,000 firms. According to its recent data, lateral associates accounted for 49% of all associate hires in 2025, while entry-level law school graduates made up just 38%. This is a significant shift from the prior two years, when graduates held a 46% share. Combined with an overall 5% decline in associate headcount from 2024, the picture is of firms making increasingly selective, experience-driven talent decisions rather than the broad-funnel campus recruiting model that long defined the legal industry.
The data is confirmed by NALP's latest survey of law firms on lateral and 3L hiring. It shows total lateral hiring volume up 16.4% from 2024 across 305 reporting offices. Both lateral associate and partner hiring contributed roughly equally — rising 17.1% and 17.8%, respectively — a shift from 2024, when associate activity alone drove most of the gains. The growth was broadest at smaller firms (250 or fewer lawyers), where lateral hiring climbed 44%, compared to 20% at mid-size firms and 11% at the largest practices. New York City posted the highest average lateral associate hires per office and tied with the D.C./Northern Virginia market for lateral partner concentration.
The Business Case for Buying Over Building
Firm economics are at the core of this shift. As operational costs rise and clients push back on rate increases, firms increasingly favor attorneys who can contribute from day one — arriving with portable business, established client relationships, and the independence to manage matters without significant oversight. Mid-level associates have gained particular leverage in this environment, occupying a position where they can handle complex work autonomously while also supporting partners, making them a more efficient path to profitability than training entry-level hires from scratch.
The appetite is sharpest in practice areas tied to transactional and contentious work. Firms are aggressively recruiting attorneys with experience in litigation, antitrust, private equity, regulatory compliance, and corporate transactions — disciplines where deep knowledge and established client trust are not easily replicated on the job. The high-grossing end of the Am Law 200 has been particularly active in the lateral market; the 100 highest-grossing firms recorded a 20% increase in partner hiring alone during 2025.
AI’s Increasing Role
Another force reshaping demand across the legal market is artificial intelligence. As firms invest in AI-powered platforms for research, contract review, drafting, and document analysis, certain tasks that once generated billable hours for first- and second-year associates are being automated. Industry analysts believe this shift could reduce long-term demand for certain entry-level legal positions, narrowing the economic case for training large cohorts of junior lawyers when AI can perform discrete research and drafting functions at scale.
The implications are significant for law schools and their graduates. Rather than functioning as an automatic on-ramp into private practice, a law degree now increasingly operates as a qualifying credential — necessary but not sufficient. Recruiting advisers are counseling students to pursue meaningful pre-graduation experience through externships, clerkships, and clinical work, develop fluency with legal technology, and cultivate professional networks well before sitting for the bar.
Government Departures Add Fuel
A distinct pipeline feeding the lateral market is the accelerating exodus of government attorneys. Departures from agencies, including the DOJ and SEC, surged in 2025, and firms with white-collar defense, regulatory, and antitrust practices moved quickly to recruit these lawyers, whose insider knowledge of agency operations commands a premium in private practice.
The government disruption also touched entry-level hiring. The rescission of federal Honors Program and agency offers in early 2025 pushed highly credentialed law students back onto the private market, contributing to a jump in 3L recruiting — from 14% of offices in 2024 to 22% in 2025. NALP characterized the uptick as a targeted response to that one-time event rather than a broader signal of renewed interest in entry-level hiring.
Campus Recruiting Feels Pressure
On-campus interview programs at law schools have long been the principal mechanism through which elite firms filled their associate classes. That structure is not collapsing, but it is contracting and evolving. Several major firms trimmed summer associate class sizes following a period of economic uncertainty, and the weight firms place on traditional on-campus programs has diminished as direct applications, networking connections, and clerkship pipelines have grown in importance.
Students attending schools ranked outside the top tier have seen their share of large-firm hiring erode. Above the Law's analysis of the Firm Prospects data noted that large-firm hiring of students from T14 or comparable tiers held essentially steady over the five-year period tracked, while the equivalent share for students from schools ranked 50 to 100 declined noticeably. Graduates from top-ranked schools are also diversifying their employment choices — accepting positions at boutique firms at twice the rate they did in 2021.
Takeaways
The structural shift toward lateral moves is not without tradeoffs. Firms that curtail entry-level hiring too aggressively risk thinning future partnership classes, weakening mentorship culture, and ultimately depleting the very mid-level talent pool they are now competing to acquire laterally. The legal profession, if it stops investing in developing young lawyers, may find itself short of that talent a decade from now.
For the moment, however, economic incentives point in one direction: clients demand sophisticated, autonomous counsel; AI is absorbing tasks once assigned to junior associates; and a deep pool of laterally mobile attorneys is available to fill the gap. The result is a legal market where a lawyer's track record carries more weight than the diploma that launched it.
