Market Update – Legal Recruitment Trends for August 2023
During the first half of 2023, interest rates and inflationary pressures prompted recessionary fears. High levels of dealmaking, which drove demand from 2021 to mid-2022, decreased. The war for legal talent slowed, with law firms and legal departments taking a cautious approach to recruitment.
Despite pressure from high inflation and steep interest rate hikes, the Canadian economy is proving to be resilient, leading to general uncertainty in the legal profession. Uncertainty presents both challenges and opportunities. More than ever, lawyers and legal employers need to be proactive in navigating market conditions, taking stock of their needs to build more resilient careers and teams over the long run.
Below is a rundown of legal recruitment trends for August 2023.
Typically, different practice areas are busy at different times. High interest rates dampened M&A, securities, and real estate activity. However, we haven’t seen an increase in litigation, bankruptcy, and restructuring, which we would usually see in a recession. The tech industry suffered some setbacks, but overall employment remains stable.
As the volume of deals slows and clients look to cut down on costs, some law firms are more cautious about hiring. Compared to the frenetic hiring pace in 2021, associate hiring slowed as law firms reevaluate needs. Similarly, law firms and legal departments are identifying inefficiencies that were overlooked during very busy times, prompting them to implement improvements. Still, lateral hiring remains steady as firms continue to make selective, strategic hires, focusing on high quality legal talent and partners with strong practices.
Despite economic uncertainty, a focus on cross-border remains. Some large law firms continue to explore new markets, whether international firms seeking to enter Canada or Canadian firms aiming to expand their practices through global referrals, with a focus on growing their bench strength and practice breadth.
The pandemic ushered in unprecedented risks, forcing companies to be more proactive in risk mitigation/reduction and make better investments in their legal department. Many companies are continuing to keep more work in-house and building a robust talent pipeline, hiring lawyers at all levels and training up as needed.
In-house recruitment remains steady, but legal departments are exercising caution and carefully reassessing their needs on a regular basis.
Remote vs. In-Office
Early in the pandemic, we believed remote work would become standard. As time passed, legal employers have pushed for more in-person interactions and implemented hybrid work arrangements. We find the typical structure is two to three days in the office, although some organizations are pushing for four to even five days.
Workplace expectations have clearly changed, and lawyers and legal employers are looking to find a compromise. Lawyers want organizations to support their preferred way of working, whether hybrid or fully remote. Legal employers, who are concerned with proper hands-on training for junior layers, must also acknowledge changing expectations or risk losing talent to organizations offering more flexibility.
Through our conversations, we find candidates take longer to evaluate what’s right for them, and whether an opportunity and a company/firm’s values, mission and vision align with their personal goals and purpose. Sometimes, the bigger question is: ‘Does this organization have a vision and mission?’
Expectations around compensation and signing bonuses don’t appear to have changed with the changing market.
Uncertainty can lead to positive change, creating opportunities to connect with personal and professional values. Most lawyers, particularly partners, are stepping back, taking stock of their careers, and spending more time reflecting on their overall goals and exploring what they truly desire.
Ultimately, successful legal recruitment requires employers to be adaptive, proactive towards changing market trends and future threats and opportunities.
The Counsel Network (a Caldwell Company) is a leading Canadian lawyer recruitment firm and has successfully placed candidates in associate, partner, and in-house counsel positions for over 30 years. If you’re thinking about exploring your options or making your next great hire, contact us for a confidential discussion today.