The United States’ 100 largest law firms brought on 8,040 new associates in 2021, more than double the total a year earlier, according to data provided by law firm and attorney analytics company Firm Prospects.
According to data compiled by Leopard Solutions, Kirkland & Ellis was the most active last year, taking on nearly 450 lateral hires in 2021. Meanwhile, Goodwin Procter made nearly 300 lateral hires, and Cooley added almost 250 associates.
Since the start of the pandemic, law firms in general have needed throngs of associates to handle rapidly growing workloads. But those boom times appear to be coming to an end.
“The market has taken a complete 180 from last year,” said Katherine Loanzon, Managing Director at legal headhunting firm Kinney Recruiting.
Talk of a recession is throwing cold water on the surge in M&A that boosted Big Law’s profitability over the past two years. Not to mention, special purpose acquisition company (SPAC) activity—a major source of revenue for law firms during the pandemic—has slowed dramatically.
While law firm associates received record pay and bonuses in the last two years and commanded never-before-seen leverage during recruitment battles, many firms are now clearly looking for ways to cut costs and pull back.
For instance, firms are largely avoiding extra bonus payouts this year—such as signing, retention, and special bonuses—and are limiting salary increases if at all possible. In addition, while some firms have seen summer associate and first-year class numbers grow, many are holding off on making latera hires because of this influx of fresh talent. And as law firms lose existing talent to in-house roles or to other firms, some positions are no longer being back-filled.
“Law firms are looking at their current bench and seeing if our current bench is being utilized 100%, and if not, let’s make sure they are before we add on more bodies,” said Summer Eberhard, a recruiter at Major Lindsey & Africa.
All of this cost-cutting means attorneys will no longer have the leverage they enjoyed over the past two years or so, and will likely not be able to secure the salaries and benefits they previously had been demanding.
“The demand for associates no longer exceeds supply,” said Eberhard. “So it only makes sense that firms are not as eager to hire remote attorneys, and offers are not going to have to be as aggressive.”
However, the news is not all bad for lawyers looking for their first job—or perhaps a change in scenery. Many mid-size and regional firms, whose ranks were depleted by poaching from larger competitors during the boom, are still looking to hire. “Last year, a lot of these midsize regional firms were losing associates and they still have a continued need, so this year, that need has rolled over,” Loanzon said.
