How Hiring in Legal Markets Around The World Has Fared in 2023

As we approach the end of the year and look ahead to 2024, law firms and legal talent alike will be considering what the New Year holds for them. The starting point for all will be the same – what is the lay of the land after the ups and downs of 2023? The answer, however, will not be the same for any two single lawyers or law firms, and neither will it be for any two legal markets they may be operating in.

The U.S.

The lateral hiring market in the U.S. has perhaps been a tale of two halves. Demand for lawyers was significantly down for the first half of 2023 compared to 2022, and especially in the first quarter.

There were frequent reports of quietly-announced associate redundancies or ‘stealth lay-offs’ particularly among tech-reliant law firms in the Bay Area and others who may have hired excessively or imprudently in 2021.  But it was not uncommon for those same firms to simultaneously be making discreet hires into other practice areas and geographies. The quiet first half of the year also saw the demand for lawyers subtly shift as smaller boutiques and mid-sized firms started hiring talented top-tier associates from Big Law, and demand centred on specialist practice areas such as labour & employment, litigation, real estate, and even tax, whilst corporate moves dropped.

By the end of spring the broader lateral market started to show signs of life and by summer, demand in the major East and West coast legal markets picked up at a pace.  As a hangover from the pandemic (and less than favourable tax regimes) in New York and California, we are seeing the trend of lawyers migrating to remote hubs like Miami and Texas, and in particular, to Austin, continue.

The U.K.

U.K. law firm lateral movement and wider recruitment has remained relatively cautious over the past year, with the perception that many over-hired in 2021 prevailing. The result is a high regard to utilisation rates to justify any team growth at associate level.

The general messaging from firms still seems to be that 3-year growth plans remain intact; and as such it is anticipated that there will be more of an emphasis on growth in the following years.  In terms of specific practice areas, we have seen a marked year-on-year decline across corporate, banking and capital markets, with a pivot to contentious and advisory practice areas such as tax and employment seeing increased movement and demand.

Demand for senior lawyers has, by contrast, remained reasonably robust over the last twelve months as top US firms compete to make key strategic hires within private equity, M&A and international arbitration.

The Middle East

In the last twelve months, we have seen many firms focus their international investment efforts in the Middle East – particularly in Saudi Arabia and Abu Dhabi. The former has liberalised its legal market and the opportunities for law firms are now considerable.

We were recently told by one senior associate seconded to Saudi Arabia, ‘the government is working hard to attract highly-skilled professionals to service its infrastructural growth by normalising day-to-day life as much as possible’.

Abu Dhabi is becoming increasingly insistent on having its trusted advisers in the same city rather than based in a different country within the region. The major Sovereign Wealth funds and government-linked entities are keen to use the best global advisers they can, and whilst it may still be hard to navigate some of the ‘Saudization’ rules, as both a market and a region it has changed and is booming.

Consequently, there has been a steady increase in demand from law firms for lawyers with specialist skills, such as infrastructure, project finance and real estate, to either relocate or be seconded to countries across the Middle East. Dubai still remains an attractive market for English-speaking lawyers and is proving to be particularly so to the more junior associates perhaps frustrated by the lack of activity in the UK.

Asia-Pacific

As the Hong Kong economy (and by extension the legal market) emerges from the disruption of political upheaval and the pandemic, talk of the island’s demise feels somewhat premature.  The business district is starting to buzz again and though some firms have downsized or strategically shifted to consolidate their China offering in Beijing, lateral lawyer movement is slowly starting again with firms talking up market activity in 2024.

The Chinese market is still a big and important target for many international clients, so having a Hong Kong office for international law firms is still necessary for those wishing to truly support their MNCs globally.

The Indian law firm rule change was big news in March but lacked sufficient detail and remains confusing for most international firms who have adopted a ‘wait and see’ approach. It has, however, turned a fresh light onto India, and there is renewed global enthusiasm for that market. Interested firms have resurrected their ‘India strategy’ by doing so from Singapore, London and Dubai. The staple in that market is capital markets work, but growth areas are infrastructure and private equity.

The ‘pivot’ from Hong Kong to Singapore by law firms continues to materialise gently, with firms seeing it as a ‘re-balancing in Asia’ rather than moving away from Hong Kong or China. Troubled US-China relations and the pandemic forced many to think about other Asian markets, to the benefit of Singapore.

Key areas of growth here have been in energy & infrastructure, particularly in renewables and energy transition, but also in LNG and offshore; corporate finance and commercial/finance private equity; investment funds; family offices and private wealth; technology/fintech and international arbitration.

Indonesia, Thailand and Vietnam are all important markets for growth that are serviced from Singapore.

Tokyo’s law firms have been reasonably busy in most practice areas this year with significant activity in capital markets, private equity, inbound M&A, and real estate.  Outbound work remains slow due to the weak Yen and tight credit markets, but it is expected that this will improve next year.

Further south, the Australian legal market has managed to keep its head above water in terms of law firm workflow and demand for legal talent. This is particularly true at the partner level as law firms (especially mid-market players) have remained busy, continuing to seek growth through strategic partner hires.

The associate market has been relatively subdued over the past twelve months, although we are beginning to see an increasing number of roles open up across firms for well-pedigreed lawyers in litigation and corporate and finance lawyers with renewable energy and major projects experience.