As 2025 begins, optimism is sweeping through the legal market, with a notable resurgence in M&A activity on the horizon. Global law firms are gearing up to meet the growing demand for cross-border expertise, driven by renewed confidence from private capital and corporate clients alike.
At Sonder Consultants, we’ve witnessed firsthand the resilience and adaptability of the legal profession. This year, that adaptability is translating into tangible opportunities for growth and innovation.
M&A Activity on the Rise
Recent industry reports indicate that dealmaking is set for a strong rebound, with law firm leaders expressing confidence in the transactional outlook. A CMS survey revealed that 65% of dealmakers expect an increase in European M&A activity, with private equity and strategic acquisitions leading the charge. Globally, industries like tech, healthcare, and energy are driving this momentum, with law firms well-placed to advise on increasingly complex, high-value transactions.
Private equity partner Jonathan Wood of Weil Gotshal & Manges predicts a surge in major transactions, fuelled in part by political developments. “We see a growing client focus on portfolio liquidity using innovative alternative exit strategies as well as an increase in appetite for dealmaking following the UK and US elections. In 2025, big ticket M&A activity will pick up and restructuring reveals a mixed picture of economic recovery across Europe,” he said.
Mike Flockhart, executive partner and global co-head of the corporate practice group at Herbert Smith Freehills, highlighted the resilience of private capital. “Private capital has demonstrated resilience and provided opportunities during tougher market conditions and tighter lending arrangements, filling funding gaps to allow for business expansion and premium infrastructure projects. We anticipate it will continue to play a pivotal role in business strategies in 2025,” he said.
Resilience Amid Economic Uncertainty
Despite challenges in the broader economy, law firms have demonstrated remarkable resilience, maintaining strong profitability and robust profits per equity partner. This success has been driven by strategic adaptations, including recalibrating compensation structures, refining performance expectations, and evolving partnership models to reflect market demands.
These adjustments not only bolster financial stability but also enable firms to remain competitive in attracting and retaining top talent. As the legal industry enters 2025, this strategic agility underscores the sector’s ability to adapt and thrive, even in uncertain times.
AI in the Legal World
Generative AI is transforming the way law firms operate, delivering efficiency and competitive edge. A LexisNexis survey shows that 41% of lawyers in the UK now use AI for legal work—a fourfold increase in just one year. Firms like Linklaters are leading the way, heavily investing in AI tools to enhance client service and streamline operations.
“AI is accelerating digital change and will bring a competitive advantage to those who harness it,” said Paul Lewis, Linklaters’ managing partner. AI’s potential is enormous, from predictive analytics to personalised legal strategies, positioning law firms at the forefront of innovation.
However, alongside the benefits of AI comes the persistent challenge of cybersecurity. Clifford Chance managing partner Charles Adams stressed the importance of robust defences: “Investment in robust cyber resilience strategies will be critical, and we are seeing growth in client demand for our full-spectrum cyber advice solutions targeting governance, engagement, and response.”
Strategic Mergers and Growth
In an increasingly interconnected world, strategic mergers are helping law firms expand their capabilities. Herbert Smith Freehills’ recent merger with Kramer Levin reinforces their position as a global powerhouse, enhancing their expertise in private capital and cross-border deals.
These partnerships are about more than just scale—they’re about creating opportunities for lawyers. More mergers will happen this year it’s simply a case of when and which firms.
New Partners and Growing Teams
As M&A activity surges, after a very active partner hiring market, the demand for associates is set to intensify. While this poses challenges for law firms, it marks a positive shift from the previous two years, which were characterised by work shortages and layoffs. Recruitment strategies have evolved, incorporating lessons learned from the last demand boom in 2021.
Stefano Barbagallo, a legal recruiter in New York, predicts a fiercely competitive hiring landscape. “In New York, this may mean leading corporate teams will begin to re-consider slightly more junior associates or talented lawyers from top-tier Canadian firms, but the focus will remain on lateral hiring at the mid-level—class of 2019-2022.
Jonathan Taylor, a legal recruiter in London, highlights notable hiring trends. “In 2024, we saw shifts towards more experienced lateral hires, growth in two-tier partner structures, and a reduction in junior associate hiring. I don't expect this to change dramatically this year, but competition for exceptional associates will continue to intensify. Firms will need to adopt forward-thinking hiring and retention strategies to remain competitive.”
With strong deal flow, strategic investments in technology, and client-focused innovation, law firms are poised to thrive this year.
At Sonder Consultants, we’re proud to support the lawyers and firms leading this charge. As trusted advisors, we connect top talent with opportunities that align with their ambitions.
If you’re ready to explore what 2025 has in store, get in touch—we’re here to help you navigate your next career move.
