Key takeaways:
- Big Law is still chasing top transactional talent with Latham & Watkins and Kirkland & Ellis leading strategic hiring as usual.
- International attorneys still in demand but expect to move quickly in preparation for year end.
- Global deals totaled $2.1 trillion in the first half of 2022, 17% down from record 2021 levels but still healthy compared to pre-pandemic levels.
2022 has been interesting on all fronts. There have been significant changes in the macro and geopolitical environments, with inflation, rising interest rates, and the war in Ukraine causing uncertainty in the global markets. Obviously, these are concerning at a broader level, but I'm often asked what this means for associates looking to lateral amongst the doom and gloom of what is being reported.
In a bid to set the record straight on what is happening here on US soil in the legal job market (straight from the horse's mouth if you like), I've outlined my view on the market and the positives I've seen in the last few months, backed by recent reporting by Bloomberg.
To give some background context, it's important to note that law is a business. A business needs to grow and make money, and the way they make money is simple - through hiring talent to grow teams and by getting work in and out the door. Even in a slower market, lateral hiring is required for law firm growth – to fill the usual gaps, and build teams under current partners, or new partner hires. It's all part of any good firm's strategic hiring plan.
Yes, it's no secret that M&A teams have quietened down since the pandemic boom, but the reality is that US firms (particularly the heavyweights) are still hiring in this market - and that's not going to change. Moreover, the reported slowdown in hiring has largely been at the junior level as firms have moved to bolster their clerkship programs that took a backseat during the pandemic. That, mixed with the slower speed at which M&A deals are happening, particularly in the last two years, has caused some concern in the market. However, what we see on the ground isn't so concerning.
...the reality is that US firms (particularly the heavyweights) are still hiring in this market...
I currently have both international and domestic candidates interviewing and getting good offers on the table. Are they as good as they were three or even six months ago? By and large, no. However, my personal view of the market is still really positive (even though my 8oz flat white is always half empty).
Having worked in BigLaw myself, I know firsthand that when M&A slows down, the whole firm, particularly the supporting practice areas, feel the slowdown also. However, deals are still happening, just not as quickly as during the pandemic; therefore, associates are still in demand. Due diligence is moving slower, and financing and approvals are slowing down, given regulatory updates and changing valuations.
In terms of the numbers to support the business of law, the dollar signs are still strong and there is plenty more dry powder in the market waiting to be put to work. Through its league tables, Bloomberg reported that global deals totaled $2.1 trillion in the first half of 2022 (over a trillion USD from the top 5 firms alone), which is 17% down from the same period in 2021. However, despite this drop, this is still a healthy number when compared to pre-pandemic levels, particularly for the US and UK markets.
So what does this mean going forward into the second half of the year?
First and foremost, associates are and will continue to be in demand. While we see a drop in sign-on bonuses, they're still there for top talent, as is the demand for internationals in areas like funds, real estate, and PE. However, there will continue to be a focus on strong academics, 'deal sheet experience', and the ability for associates to hit the ground running. Demand for regulatory, restructuring, and debt markets attorneys is also on the rise.
Leading the current hiring trends are firms like my old shop Kirkland & Ellis, and Latham & Watkins, who recently added a funds partner and several other M&A partners in New York, on top of additions to their PE, finance, and corporate departments earlier on in 2022 across both coasts. Similarly, we're seeing other elite firms luring partners and associates out of the large juggernauts as they look to strategically build out growth practices such as secondaries and financing. I think this will very much continue to be a trend well into the coming years.
Strategic transactions aided by PE buyers are circling, waiting for the right time to strike, and I think we'll start to see those transactions increase in the second half of this year (similar to the deal flow that followed the initial pandemic pause). Ultimately, this will further boost hiring and hopefully reinforce the positives we're still seeing in the hiring market.
