By Karen Vladeck, Whistler Partners, for Bloomberg Law
Lately there has been much discussion about a recession, layoffs, and hiring freezes in the legal market, particularly in Big Law. Many of the top law firms in the world are deal-driven firms. A 57% global reduction in IPOs in the third quarter from a year earlier has led to a significant slowdown in those firms from 2021, particularly in capital markets and private equity mergers and acquisitions.
Against that backdrop, it’s no wonder that we are generally seeing a slowdown in movement within these market segments. Law firms in 2021 needed people to crank out deals, which led to a feeding frenzy for corporate associates.
At one point, firms were reportedly handing out associate jobs reportedly even without interviews and giving out $100,000 signing bonuses to second-year associates. Those days, at least for the moment, appear to be behind us.
One interesting feature of the current deal slowdown, however, is that it is not affecting all areas equally, whether practice areas or geographic regions. For example, in-demand practices that don’t revolve around the economy—such as litigation, privacy, data security, intellectual property, employee benefits, and tax—are still hiring steadily.
Indeed, some countercyclical or highly specialized practice areas—such as labor and employment, employee benefits, and antitrust—are struggling to find qualified candidates. There were 25 open antitrust associate roles at Am Law 100 firms in Washington, D.C. alone, according to a proprietary database of law openings accessed earlier this month. Similarly, there were over 100 jobs open in the state of California for lateral employment litigation associates.
And, for highly specialized and always in-demand practice areas, like employee benefits/ERISA, there were over 125 jobs nationwide open at the associate level. These numbers indicate that there are some practice groups still in hot demand at levels that firms cannot fill, regardless of how the economy is currently performing.
Similarly, some regions are experiencing this downturn far less harshly than others. Firms in California, for instance, where shortages of qualified attorneys have been endemic, are still searching for qualified talent at all levels. And legal markets less beholden to the capital markets or private equity—such as those in Washington, D.C., Colorado, Florida, and Texas—are likewise seeing more modest effects from the recent economic downturn.
The state of Texas, for example, currently has more than 400 posted jobs in the Am Law 200 across practices that need to be filled, which doesn’t even include the substantial number of boutique job openings that aren’t posted through traditional avenues.
High Demand for Lawyers with Clients
Beyond differences in how some practice areas and geographic regions are experiencing the downturn, we’re also seeing little reduction in demand for partners with portable books. In contrast to senior talent without clients, those who have business to take with them are still highly sought after, as reflected, among other things, in the great lengths to which firms are going to retain them.
Many partners with portable books who didn’t make a move during the boom of 2021 are now seeing the potential financial and practice-group benefits of a lateral move, aided by the fact that firms are still paying top dollar for lateral partner talent.
Finally, and perhaps counterintuitively, making a move in an economic downturn can actually redound to your benefit. After years of overhiring, a number of law firms were burned by the 2008 downturn and forced to lay off significant numbers of lawyers at all levels.
With memories of those days fresh in the minds of today’s law firm managers, it’s far more likely that lateral moves today are filling existing needs, rather than speculative future ones. As I told an associate the other day, if a firm is hiring you laterally today, that’s only a good sign for your future at the firm.
No one can know exactly what the next year in lateral legal recruiting will bring (and anyone who says otherwise is selling something). But from what we’re seeing on the front lines right now, it’s not all doom and gloom.
There are certain practice areas, markets, and types of lawyers that remain very much in demand. And if you fall into any of those and are able and willing to make a move now, you may be setting yourself up for more long-term success than would be true had you moved at the peak of the market.