Lateral Hiring Trends in Q1 2025: Law Firms Focus on Regulatory Talent Amid Market Shifts

Data cited in this post was sourced from Firm Prospects and reflects Q1 2025 trends based on their latest reporting on lateral hiring activity.

The legal industry is entering a new chapter in 2025, marked by shifting priorities and selective growth strategies among major firms. In Q1 2025, lateral hiring among AmLaw 200 firms totaled 2,631 attorneys—down 3.6% from Q1 2024. Associate hiring saw the sharpest decline, falling 5.9% year-over-year and 39% from its Q3 2024 peak. In contrast, partner hiring remained stable, increasing slightly to 785 hires.

These numbers reflect broader trends in the legal talent market, where firms are cautiously navigating economic and political headwinds. Litigation and Corporate remained the top practice areas for both partner and associate hires, though Litigation hiring declined significantly from previous highs. This may signal a shift in client demand or a more conservative approach to expanding litigation teams.

Hiring was concentrated in major markets like New York and Washington, D.C., with top firms like Kirkland & Ellis and Reed Smith leading the way in partner additions. Law firms continued to draw most lateral talent from other firms, but hiring from government agencies surged in Q1 2025—reaching a five-year high of 150 attorneys, including a record 64 partners. This spike is likely tied to post-election transitions and growing demand for regulatory expertise.

This surge in hires from government agencies highlights a strategic pivot by firms: prioritizing attorneys who bring institutional knowledge and insight into regulatory environments. Q1 2025 saw a notable increase in lateral hiring from federal agencies, driven by sweeping government cuts under the Trump administration. With over 280,000 federal positions eliminated, law firms responded by aggressively hiring experienced government attorneys—especially at the partner level.

Looking ahead to Q2 and beyond, this trend may continue as agency downsizing persists. Demand is expected to remain strong for attorneys with regulatory and enforcement experience, particularly in areas impacted by federal rollbacks such as healthcare, environmental law, and education. Law firms are investing in these capabilities to better serve clients navigating an increasingly complex legal and compliance landscape.

At the same time, the broader legal market faces growing uncertainty. The administration’s aggressive tariff policy—imposing duties as high as 50% on key imports—has rattled financial markets, sparked fears of inflation, and raised the risk of a broader economic slowdown.

As 2025 unfolds, law firms will likely continue balancing cost control with strategic investment in top talent—especially in regulatory-focused practice areas. Monitoring these hiring patterns offers critical insight into how firms are preparing for the evolving legal and economic climate.