As a lot of the world’s top law firms are deal-driven, it makes sense that many have seen a significant slowdown (particularly in capital markets and private equity M&A practice areas) as a result of the 57% year-over-year global decline in IPOs in the third quarter. Thus, it’s also no wonder there’s been a corresponding slowdown in the movement of associates within these areas.
Law firms were in desperate need of corporate associates to work on deals in 2021, which led to stiff competition in the market for talent. At one point, firms were reportedly signing new associates without interviews and handing out $100,000 signing bonuses to second-year associates.
However, the current deal slowdown is not affecting all practice areas or geographic regions equally. For instance, high-demand practices that don’t rely so heavily on the health of the economy — such as data security, employee benefits, intellectual property, litigation, privacy, and tax — are still seeing steady hiring.
In fact, some highly specialized or countercyclical practice areas — such as antitrust, employee benefits, and labor and employment — are actually finding it hard to hire enough qualified associates. There were 25 open associate roles in antitrust practices within Am Law 100 firms in Washington, D.C. alone in early November, and more than 100 jobs open in California for lateral litigation associates.
For practice areas like employee benefits/ERISA, which are highly specialized and always in-demand, there were more than 125 jobs nationwide open at the associate level.
Some geographic regions are experiencing a far less severe downturn than others, as well. There is still a high demand for qualified talent at all levels for firms in California. And legal markets like Washington, D.C., Colorado, Florida, and Texas, which are less beholden to capital markets or private equity, are also experiencing more modest effects from this recent economic downturn.
In early November, Texas had more than 400 posted open jobs in the Am Law 200 — and that’s not including a significant number of job openings at boutique firms that aren’t posted through traditional avenues.
There’s also been little or no reduction in demand for partners with portable books. Those who can take business with them are still highly prized, and firms continue to pay top dollar for them.
It may actually turn out to be beneficial for partners to make lateral moves during an economic downturn. Many law firm hiring managers remember the 2008 recession, which forced a lot of firms to lay off significant numbers of lawyers at all levels, and have learned their lesson; if they’re hiring now, it’s more than likely in order to fill existing needs, rather than potential future needs.