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What 3 Legal Industry Trends From 2022 Mean For Next Year

As a recruiter, December is time for looking back at the year that was and trying to read the tea leaves left behind to guess what the next 12 months will bring the market.

Recruiting can be a series of whirlwinds; I get so caught up in daily work that I don't spend enough time connecting dots to see the patterns of all the movement in the market. A few themes often come to the surface in retrospect — particularly around which practice areas saw the most movement, which regions seemed most ripe for new office openings and who was promoted to partner.

Attorney Moves

It was the year of litigation moves.

Anecdotally, more than 45% of the lawyers I helped this year were litigators — not counting specialist litigation practices, i.e., patent, and labor and employment).

Across the U.S., of all the associate moves into Am Law 200 firms — a total of 9,084 — a full 27% were litigators. For contrast, the second-biggest practice area that moved into Am Law 200 firms was in corporate, with 1,400 fewer associates than in litigation. Partner moves mirrored the trend — 609 corporate partners moved into, or between, Am Law 200 firms, whereas 1,009 litigation partners made the same move. This year was about litigation and it's not close.

Litigation is not always the market-leading practice in lateral moves — not by a long shot.  In 2021, the year of so much lateral movement, 878 litigation partners moved and 2603 corporate partners moved.  At the associate level corporate was also king: The 3032 litigation associates who moved was modest in scale to the 10,383 corporate associates who found new homes in the Am Law 200. The pendulum certainly swung this year.

It's not a surprise that BigLaw litigation, which is much more recession-proof than many deal-led practices, would lead the pack in a year that has seen more than its share of unsettling macroeconomic news. As deal volume — especially in capital markets, mergers and acquisitions, and emerging companies — slowed in the second quarter of the year, litigation personnel movement picked up — and hasn't slowed down yet.

Why is litigation at this scale a practice that can weather financial storms?  Most of the Am Law 200 do mostly or exclusively defense-side work for major corporations. While those companies may be taking a hit here and there, the majority are well-positioned to withstand a slight downturn, and thus will continue to pay to defend themselves and their top executives against legal claims. The cost — both in terms of reputation and damages — of not making a robust defense could be far greater than the legal fees.

Office Openings

Many firms decided to expand westward — into the Bay Area specifically. San Francisco welcomed Debevoise & Plimpton LLPCleary Gottlieb Steen & Hamilton LLP and Eversheds Sutherland. Those firms followed hot on the heels of other big names that also launched in the tech hub since the beginning of the pandemic, including Allen & OveryFreshfields Bruckhaus Deringer LLP and Paul Weiss Rifkind Wharton & Garrison LLP.

Other geographies that saw significant new office openings include Miami, Salt Lake City and Austin, Texas. Those markets will be fun to watch as they continue to develop into 2023.

Partner Promotions

December is not just industry-reflection season, it's also the core of partner promotion announcement season. This year in the Am Law 200, men continued to be promoted to partner at a much faster rate than women — 3,942 men to 2,805 women.[1] Litigation continued its general streak here as well, with 3,015 litigation partners named.

For comparison, there were 1,662 corporate partners promoted, with the next highest number the 723 promoted up in real estate. In previous downturns, sometimes partner promotions have dropped; not so in 2022, which held about steady with 2021's promotion numbers. Perhaps this suggests that firms predict the current downturn will be a blip and not a sustained recession.

Given the general trajectory of the U.S. economy, it should not surprise anyone that the quarter that saw the fewest number of lateral law firm moves at any level was a somewhat mercurial fourth quarter. The quarter with the most moves was the second quarter, which is after most associates received their bonus for 2021 in their bank account.

As far as regions go, the three with the most moves were, unsurprisingly, the Bay Area, New York and Washington, D.C.

Looking Ahead to 2023

Considering the state of the legal market at the end of 2022, my core predictions for 2023 are as follows.

The year will start slow, primarily with moves to backfill those who resign after receiving their annual bonuses. Those moves will, as they always do, create a secondary wave of job openings. On and on it will go. However, there won't be a flood of new roles in early January, as there often are. 

Hiring will continue to be thoughtful, cost-focused and the bar for credentials will remain where it is now: high. It has been turbulent adjusting to what firms want to see in candidates this year, as it has been so different from the free-for-all of 2021.

I had hoped that some firms would have recognized that some of the incredible talent they brought in last year — lawyers who are absolutely performing — didn't fit the traditional Top 14-clerkship-Ivy League undergrad mold, but anecdotally this doesn't seem to have happened. The rubber band has snapped back, and firms want what they wanted before 2021. I expect the 2022 trend to continue.

I think we may see fewer firms seeking to land-grab in new regions as everyone hangs on to see what will happen to the greater economy, but the firms interested in expanding their reach will continue planning. It doesn't feel like 2023 is destined to be the year of splashy office openings, save for rapidly expanding territories like Miami, Utah and Austin, Texas. If you keep an eye on one market that's ripe for growth, it's the Denver-Boulder region.

I expect litigation, labor and employment, and all the practices under the umbrella of intellectual property will hang steady. They are close to evergreen.

There should be some pent-up demand to do emerging companies and venture capital deals — investments in particular — in the first and second quarters. And, many with their fingers on the pulse are suggesting that M&A will roar back.[2] It may take capital markets work a while longer to find its footing.

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