In 2022, the London legal market saw around 5,500 lateral moves across the AMLaw 100 and UK Lawyer 50 firms against the backdrop of a raging salary war. Now that such a strong year has come to an end, what practice areas are predicted to be busiest in the year ahead, and what will law firms have to do to win the continuing talent war, amid changing ways of working among legal professionals?
Most notably, restructuring is an area that is seeing a flurry of interest from firms, particularly the big US firms in the London market. While it is true that demand has not matched 2020, which saw a surge of restructuring opportunities, there have been a number of firms strategically stocking their associate ranks as they eye up a strong pipeline of work.
Additionally, considering London is around six months behind the New York market in terms of hiring demands, it is likely there could be significant increase in roles in corporate practices such as M&A, private equity and capital markets as already seen in the United States. However, while this will obviously be impacted by European clients and deals that dominate the London market, there is a strong indication that global businesses still want to complete transactions in the year ahead.
It is also anticipated that there will be continued interest in technology and venture capital practices that are more specialised and focused. This suggests that lawyers with tech expertise and skillsets such as patent experience will continue to be in high demand. Similarly, general commercial litigation and arbitration practices are seeing an uptick in demand for mid-level talent in the London market, with live roles in this space increasing by 10% in the past six months, according to recent job market data.
So, how can firms ensure they respond to sector hotspots and source the right talent to plug into demand? Wellbeing strategies are likely to continue to dominate hiring conversations next year. The concept of ‘millennial burnout’ has become a term which is sweeping social media as individuals find themselves feeling ‘tired and uninspired’, something which has been exacerbated by the impact of the pandemic on physical and mental health, as well as looming events such as the global financial crisis increasing anxiety and worry around overall career direction.
Arguably, there is a feeling among millennials that older generations think resting due to burnout equates to laziness and that worth to a firm is only tied to productivity. Law firms are working hard to counter this narrative—for example, through positive conversation around workforce mental health and wellbeing. However, questions remain about whether enough is being done as the millennial generation continue to reassess their drivers and values in the long-term. Wellbeing concerns are increasingly prompting talent to move in a new direction or change careers completely, as many ask themselves whether burnout is what they want for the next 30 years.
For this reason, going into 2023, law firms need to think hard on how they sell wellness initiatives to prospective hires and re-evaluate the career paths of their associates. Not all want partnership or even a career in the legal industry forever.
How to address hybrid working demands from talent will also remain on firms’ agendas in the year ahead. Gen-Z are now part of the workforce and in the early years of their careers. This is a generation that craves mentorship and development, along with flexibility, which arguably makes them the hardest to please, particularly in a law firm environment.
For this reason, a key challenge facing law firm leadership in 2023 will be finding a good balance between senior staff who have found their work-from-home set-up as productive as being in the office, along with a new generation who have experienced remote learning and are having their first real-work experiences. This is likely to be heightened by continuing client pressure in the new year, with partners justifying high fee rates to clients who are paying for a largely remote-trained junior workforce and in a market seeing frequent salary increases.
A much more emphatic focus on strategic hiring is likely for the foreseeable future as the pendulum shifts back to firms who want to return to normal interviewing processes, where they can take their time with hires and explore the full pipeline of candidates on offer. Furthermore, upskilling or retooling existing talent will be a focus for law firms in 2023, helping them to aid retention and retain brand image during any headwinds.
Firms that heavily let go of their associates during the global financial crisis in 2008 found recovery difficult when trying to hire again during a boom time, a lesson they do not want to learn again as we face another period of economic hardship. Ultimately, by creating a more agile and flexible workforce, law firms will be able to help associates who want to switch practice areas or get more varied work, while retaining their talent in the long run.
Overall, there has been a big shift since the pandemic in the way that law firms operate and any shift back to pre-pandemic behaviours will either likely not happen or be a slow, gradual change. Instead, as we head into 2023, increasing opportunities in restructuring, corporate and technological practices are set to shape who law firms are looking to hire. As for how law firms hire, post-pandemic changes to the ways of working among millennial and Gen-Z generations will have an impact.