How lateral hiring came to be a standard part of law firms' recruiting program is not as important as understanding that it does exist and that you are unlikely to spend your legal career at the first law firm you join. Lateral movement is part of the consciousness of institutions and individuals alike and as you enter the increasingly complicated legal community, you should realize that your notion of career satisfaction is not the same in law school as it will be three or five or ten years past graduation.
This is not to promote a cavalier attitude toward your first job but a healthy respect for how little you know based on schooling alone. Add to this the difficulties of knowing what expertise to choose, what size firm to work for, how to distinguish between firms, how to assess partnership prospects, much less consider the personal ramifications of where to live and work, spousal career demands, the impact of children and just what you want to be when you really grow up anyway, and there is a substantial likelihood your first job choice won't correctly address all the relevant issues. Besides, people change - as do law firms. It's hard to predict the future.
When you take your first job, it will be a year or two before you will be in a position to assess the wisdom of that choice. Even lateral moves should be given a full year before being judged. Still, take stock frequently. As hard as you will work in the first years of practice, be sure you're headed in the right direction. Educate yourself on other firms and don't hesitate to ask tough questions of your own employers. Finally, realize that with lateral movement running rampant, you will from time to time be courted by other firms. Don't let flattery get in the way of facts. Information is your only insurance against poor career planning.
There was a time when the need for a discussion of lateral movement in the legal community did not exist. Experienced lawyers not only did not move from firm to firm, the very thought of it bordered on heresy. And even if you were willing to think the unthinkable, there was probably little you could do about it. Law firms simply did not hire from other law firms and individual lawyers thought of their first job acceptance as their last.