It’s hard to succinctly summarize how different the world looks today than it did just a few years ago and how those changes have impacted every corner of the world, including the legal industry. Things have changed, to say the least, in how and when we work, attorney career trajectories, and law firm operations. It can be a challenge to pin down the shifting priorities of the partners, counsels, associates and professionals that make up the law firm ecosystem and how that impacts a firm’s ability to attract and retain legal talent.
But, we can start with what we are seeing now and where that might take us.
1. Associate Hiring is Ultra Competitive
After a massive hiring spree of 2021, the associate lateral market is active, but very tight. The sheer volume of lateral associate moves in the past couple of years means that a large proportion of biglaw associates have moved in the recent past and will not entertain another move anytime soon. The result: A significant portion of associates in biglaw are off the market, way more than in years past. Firms are seeking talent in a much smaller candidate pool than normal.
Number of Lateral Associate Moves Tracked by Firm Prospects
Associates on the market are facing a bewildering new reality: A stratified associate compensation system in biglaw, the possibility to be partially or fully remote and longer and more detailed hiring processes at firms.
Future outlook: Increasing competition between law firms for associate talent. Associates will be evaluating not only compensation, but looking for tangible elements of flexibility i.e. opportunity to be full or part time remote, the opportunity to work with partners and clients closely in a meaningful way, and a career path forward. Associates can easily discover how their pay compares to the top of the market and have expectations for something in exchange for “lower” pay – i.e. actual flexibility and some control over their schedule.
2. Associate Stealth Layoffs
We’ve heard some rumblings of small, stealth layoffs here and there, citing “performance issues” for some associates and staff. These layoffs are difficult to track as they are not consistent across the industry or even practice groups.
Future outlook: Big question mark here! It’s “to be determined” if the recent pay increases for associates, large multi-year guarantees paid to entice/retain partners and rising hourly rates are sustainable for firms with lower profitability and tighter margins as we move into a potential recession or even a slightly less robust economy.
3. Counsel/Senior Associate Departures
While the “Counsel” or “of Counsel” title has different meanings at different firms, we have seen an increase in attorneys seeking more control over their career. Reasons differ, but it seems to be a common thread that the combination of the pandemic and global changes with the potential of a recession has some attorneys valuing having some “control” over their practice and futures rather than being a very well-paid but non-business developing counsel at very large firms. To that end, we’ve seen an increase in the number of long term “counsel” at elite firms that lack a clear or certain path to partnership aggressively seeking out an opportunity to develop their own practice as partners at firms that are lower in the Am Law than their current firm, or regional or midsized firms.
Future outlook: This trend will continue and I expect to see more moves as Senior Counsel will also move to avoid mandatory retirement (particularly in the face of economic uncertainty).
4. A Different Set of Considerations
The most profound paradigm shift we’ve observed is lawyers at all levels evaluating their firm on how they interact with society externally and the culture cultivated internally. This is most undoubtedly the result of the self-evaluations we all did during the pandemic and the frustration that many attorneys in the prime of their careers faced during lockdowns while balancing unrelenting client demand with other life roles, especially for parents and other caregivers.
Attorneys at all levels are paying very close attention to quality of life internal factors such as benefits, (specifically paid paternity and maternity leave that people are actually encouraged/allowed to use), billable hour requirements, face time expectations and remote work opportunities. As we continue to live in unprecedented and uncertain times, attorneys are evaluating firms on their interactions with their communities and society as a whole, including ESG initiatives, involvement or lack of involvement in political and social issues, and real, not performative, diversity initiatives.
Future outlook: The paradigm shift is a permanent, particularly with the up and coming generation of partners and future law firm leaders.
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