Much doom and gloom has been written about the legal market in recent weeks as media outlets relentlessly recycle the same materials. These articles condemn the legal market to the grasp of a recession, blast job cuts at some of the major tech-focused firms in the US, and spread fears that AI will eventually swoop in, rendering the need to use lawyers at all.
Without dismissing the legitimacy of these concerns as merely fear-mongering, I do stress the importance of keeping one eye open to some of the positives happening in the space, such as:
Increased activity in contentious practice areas
After a couple of record-breaking years, the M&A boom has definitely slowed. Whilst endless articles about the mountains of dry powder out there continue, we are seeing a dramatic shift as we observe increased activity for contentious practice areas, including Commercial Disputes, R&I, Arbitration, Employment Law, Construction Litigation, Insurance, and Patent Litigation. We will also likely see continued investment from firms in growing practices such as ESG, IP, TMT, Crypto Currency and Cyber security.
This is not to say that Corporate, Finance and Commercial sectors won't pick up again this year. But, it has been great to see the practice areas that were starved of work during the post-covid boom now get the work they have been holding out for—in turn, showcasing how the full-service law firm model can prove weatherproof to the ebbs and flows driven by economic conditions. It is also worth noting that deal activity for transactional sectors remains high for firms focusing on the mid-market.
US firm Expansion
Separately, we are seeing examples of further US expansion into London, driven by private equity with Milbank's recent acquisition of Dickson Minto's PE practice, whilst merger talks between Shearman & Sterling and Hogan Lovells to form a US Super firm continue to gain momentum.
Opportunities to Entice Top Talent
We've also been observing several firms looking to capitalise on opportunities to capture top talent from competitors. For example, US heavyweight Cleary Gottlieb's recent poaching of Travers Smith Head of Private Equity and Financial sponsors Ian Shawyer, alongside the acquisition of restructuring partner duo Solomon Noh and Alastair Goldrein from Dechert in London. This mirrors the behaviours of several firms following the GFC and, more recently, in 2020, in the early stages of Covid-19. Those firms that can be agile and strategic in approaching this period will be significantly rewarded.
''Slowdowns can present significant opportunities as well as challenges.'' - Dechert CEO Henry Nassau
If you would like to discuss the market or are just interested in what opportunities may be available to you, please feel free to get in contact for a confidential discussion at dylan.morrison@sonderconsultants.com
