Partners: Partner activity in the lateral market picked up this year after being dead since March 15, 2020. Pre-COVID, the top reasons partners would consider a move to another firm were: 1) lack of confidence in firm management; 2) disagreement with the direction of their firm; and/or 3) their practice outgrew their firm. These reasons are still top of mind for most partners who are thinking of making a move. But post-COVID, by far the #1 reason partners are considering a move is a lack of associate or junior partner support at their current firm. Partners are working too hard on tasks and work appropriate for more junior attorneys. Partners are seeking relief from these burdens.
Associates: 2021 was the busiest year in the recent past for associate movement in Minneapolis. Most of the activity was in the corporate/M&A space, with the majority of associates moving to bigger firms or firms with broader geographic footprints. The associate market is much quieter this year. We see this slowdown in associate movement—here and nationally—as a return to normal (i.e., 2019 levels of associate movement) rather than a troubling downturn. In certain practice areas—namely corporate and real estate—the demand for associate talent exceeds supply. We are hearing that some associates fell behind in their professional development during COVID. This was a concern flagged by partners early in the pandemic’s work-from-home stage. Now associates are more frequently expressing this worry. Will they catch up? Will they have to move to do so?
Junior Partners: I have watched this law firm cohort closely this year. How would firms handle compensation for this group after associates’ salaries jumped significantly in 2021? Firms seem to have addressed these concerns through a combination of increasing compensation and convincing junior partners to embrace being “owners” and play the long game.
Minneapolis Market Economic Indicators: The number of national law firms interested in entering this market around a group of partners or via merger has decreased from the feeding frenzy that took place between 2016 and 2019 when 11 firms entered this market. But interest remains; we are currently working with one firm that is interested in entering this market and several other firms have expressed an interest. On the associate level, at least two firms are raising first year salaries to $190K on January 1, 2023, a clear sign that competition in Minneapolis for associate talent remains fierce. Finally, reports of reduced “deal flow” nationally (mainly on the coasts) has not hit corporate practices in Minneapolis yet, suggesting that any recession that may hit the legal industry might miss the middle market.
