Market update – Canadian Legal Recruitment Trends for 2022

May 9, 2022


2021 was the year of the IPO and frenzied M&A activity fueled a hypercompetitive market for legal talent, characterized by diminishing talent pools and high turnover rates. The Great Resignation left law firms and legal departments scrambling to offer raises and incentives to retain lawyers.


As legal recruiters, we continue to see high demand for legal talent, both in private practice and in-house, across Canada. The pandemic ushered in a dispersed workforce, loosening the ties binding lawyers to their employers, and associate turnover is high.


As we head into the third quarter, below are some key legal recruitment trends for 2022:


The war for legal talent continues


The war for legal talent remains strong, especially as US law firms continue cherry-picking top Canadian legal talent. High levels of dealmaking have law firms aggressively growing their corporate M&A and financial services groups. As such, law firms have become more openminded in their hiring efforts.


Firms in major centres, especially Toronto, are becoming more creative in their recruitment tactics. They also opened the doors to foreign legal talent, unusual given the conservative approach of the Canadian market. On the in-house side, companies spanning a wide variety of sectors, such as technology, financial services and real estate, continue to seek in-house lawyers.


Hybrid working is here to stay


Workplace expectations have changed. Through our conversations, we find candidates prefer remote working entirely or a hybrid model going forward. Legal employers must acknowledge changing expectations or risk losing talent to organizations offering more flexibility.


Law firms and legal departments that redefined work arrangements (flexibility, meaningful onboarding, ongoing professional development) are proving to be most successful in their recruitment efforts. Salary is important but employers must also give lawyers compelling reasons to join and stay.


Technological innovation is transforming the legal market


The pandemic accelerated the rise of technology, changing the way lawyers and legal employers work.

Last year saw significant expansion of tech infrastructure (e.g., cybersecurity, data storage) at large companies and as such, demand for lawyers with technology law experience increased across most industries, such as financial services, logistics/transportation, retail, amongst many others.


For law firms, remote working highlights the need for streamlined and up-to-date knowledge processes.

Innovation is key, and we’re seeing a rise in demand for knowledge management lawyers to improve data management and workflow, such as developing practice group and client-facing resources, as well as mentoring junior lawyers.


Law firm compensation increasingly ahead of in-house roles


Due to increasing workloads, law firms are scrambling to recruit associates and partners to fill its needs. Across Canada, we see law firms leaning into increased bonuses and salaries, as well as offers of partnership at an earlier stage. The ongoing ‘pay wars’ has resulted in law firm compensation outstripping in-house compensation by a significant margin.


While in-house to private practice salaries cannot be compared – like comparing apples to oranges – it impacts a company’s ability to attract and retain top talent, as well as forms the backdrop to compensation negotiations. The growing discrepancy dissuades associates from considering in-house options, or being highly selective of roles. Even in-house lawyers are being lured back to private practice.


How can in-house departments overcome this gap? We see some companies dipping into a more junior candidate pool; however, legal departments must be prepared to train up. We expect to see increases in in-house compensation across all seniority levels and sectors this year.


Current in-house compensation will be covered in our 2022 In-House Counsel Compensation & Career Survey, to be released next month. The report will measure and benchmark compensation trends, as well as report on career-related topics and trends during an unprecedented time of growth.


Takeaways for legal recruitment in 2022


Based on current market activity, we anticipate legal recruitment activity will continue ramping up across Canada for the next few quarters. Recruitment time frames have increased, and talent retention is key. We suggest legal employers bolster both their retention and recruitment efforts as the legal talent shortage continues.


Law firms can set themselves apart by offering creative solutions such as lower targets, a more salaried approach, increased flexibility, and fully remote working. Senior lawyers have also approached us about non-equity partnership or counsel type roles, which may alleviate workloads.


In-house teams may no longer have the edge on work-life balance; however, opportunities for professional development, increased benefits and compensation, and stronger organizational values (such as equity, diversity, and inclusion) will help attract candidates whose goals align with their own.


Ultimately, successful legal recruitment will require employers to be adaptive and proactive towards changing market trends. It is crucial for legal employers to evaluate their needs and re-envision their work structures to grow more resilient teams over the long run.


Miriam Leung, Director


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Meaghan Loughry, Recruitment Associate


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