U.S. Labor Market Leads the Way with Strong Job Creation Despite Recession Fears For lawyers, however, this eagerness of fast-moving companies only underscores the opportunity of today`s market — and as more companies work hard to improve their ESG and diversity practices, it`s never been a better time to seize the huge opportunities at nearly every firm under the sun. Tracking the number of law firm graduates since the beginning of our research shows how stable the legal recruitment market has been. Only the small group that hired for more than 120 years in the early years has seen dramatic growth, and this growth is mainly driven by five companies: Jones Day, Kirkland & Ellis, Latham & Watkins, Skadden and White & Case. Before Covid-19, salaries in the legal sector were relatively stable and we are now catching up very well. Many HR managers are nervous when they embark on the review of salaries and promotions to manage the impact of this. Market pressure on wages is increasing, which is a challenge for companies that want to reduce costs. Small businesses can be much more agile than their larger competitors and can get a quote quickly. When they see a candidate, I advise my clients not to wait for someone to compare them. You must decide quickly on the candidate`s suitability. In one case in the past few weeks, a talented associate-level real estate lawyer entered the market. We were able to work with our client to go from interview to offer in one week.
It should be noted that the gap between partner and partner lines remains relatively constant over the years. Of all the challenges facing DE&I departments, recruitment is the easiest problem to solve than retention. And what we`re learning here is that retention rates aren`t improving – the gap remains the same – and that the problem of improving the number of women and minority partners is solved by hiring better numbers at the entry level, not by improving engagement rates themselves. Working conditions, which contribute to the turnover of women and ethnic minorities, do not seem to show significant signs of improvement. Here we look at the average number of ethnic minority lawyers and how they have changed over six recruitment cycles. You may care, you can`t, but let`s face it, recruiting is part of our diet these days. We are not allowed to drink sugar and fruit juices are bad for us, a little recruitment, as far as I know, has no health risk associated with it, so let`s go while we can! With the legal hiring frenzy reaching such a high level in 2021, the market may well recalibrate. However, businesses would be well advised to take steps now to „weather the recession“ and ensure that their workforce levels meet customer needs now and for the foreseeable future. Over the past couple of years, we`ve learned not to hit the panic button when it comes to getting your workforce right now, or you might need talent at every level. Of course, we will continue to monitor the recruitment of lawyers. According to a study by ALM Intelligence, companies are increasingly offering their clients more holistic consulting services in order to remain competitive with alternative legal service providers. Now that two years of research have passed since the pandemic began, we are seeing mergers and acquisitions fall even further.
Growth areas continue to reflect an economy that has been in crisis for two years – jobs and bankruptcy are still in vogue – and all these unused city centres are creating legal work in real estate. Energy remains buoyant because financing is long enough to be reasonably sheltered from recession. The only core transaction areas that thrive are private equity and venture capital. This climate favours creditworthy investors who can benefit from lower corporate valuations, and disruption creates opportunities. The U.S. legal services sector now has more jobs than when the 2007 census peaked just before the Great Recession, according to data released Friday by the U.S. Department of Labor. Richard Harris, general counsel at the Robert Walters Group, identified „truly incredible pay inflation, greater specialization that makes certain types of lawyers rare, [and] the growing size of in-house teams“ as three challenges companies face in the battle for talent. But here we look at the impact of the practice area on an employee`s willingness to stay with the firm. A trend is emerging where large host groups – commercial litigation, corporate law, finance – struggle to retain employees in the long term, while more specialized groups perform better in terms of retention. The fact that large host groups perform worse is not a bad thing – after all, they are exceptional training grounds in the early years, essentially fueling talent in the wider market. We will discuss this topic in detail here.
During the pandemic, many people have taken a moment to reassess their professional lives and careers. They were faced with tough questions about how to spend and prioritize their time. In some cases, this has led some lawyers to leave the industry or make a tree or ocean change. When federal and state governments eased their hiring freeze late last year, it led some lawyers to leave private practice to explore government roles. However, demand for legal services has increased more sharply than expected. Companies tell me that they are starting to refuse work because they are unable to meet the demand. 41% of respondents said they experience a slightly slower market, 26% of respondents think it`s about the same as in 2021, and 19% are slightly busier than before. Only 7% reported experiencing polar extremes, with only 7% saying the market is much slower and 5% seeing a clear uptrend. While Leopard Solutions` research tells us a lot about real-time hiring trends, we tried to hear valuable insights from legal industry professionals on the hiring market.
With this in mind, we surveyed 56 legal professionals in August 2022 to determine what the lawyers` job market might look like over the next six to twelve months. While these views represent only a small fraction of the legal industry, time will tell how the legal market will evolve through the end of 2022 and beyond.