Amid the immediate onset of the COVID-19 pandemic in spring 2020, pundits predicted an economic downturn almost as impactful as the financial crisis of 2008-09. And while 2020 saw a great deal of caution and playing it safe, 2021 skyrocketed into economic overdrive, creating more work for law firms than they knew they could service.
As a result, law firm partners saw new business coming in at rates they could not handle without the support of experienced associates, setting off an associate talent war.
Now, after a year of extraordinary signing bonuses, nearly instantaneous offers and flexible work arrangements, associates are wondering what's next and how long this heated market will continue.
The outlook for the new year is bright: Demand for talented associates is at an all-time high, and there is no indication that it will be slowing down any time soon.
Proof of this comes in the form of offers being extended to associates to start in the new year, and the number of law firm clients reaching out to set up meetings to gear up for the new year.
Traditionally, lateral moves only made waves at the partner level, as those moves are essential to help firms grow business quickly. While partner hires are still significant, firms understand that now more than ever, talented, experienced associates are critical to bringing in more work and increasing profitability.
Partners prefer to have associates to whom they can delegate significant responsibility on complicated matters, i.e., midlevel and senior associates.
Many homegrown associates at that level are already at capacity, so if new partners join, they must look laterally. Those attorneys with established skill sets, who can hit the ground running without additional training, will be in the highest demand.
However, there's a finite supply of highly trained associates in the market.
As a result, firms have adapted and become creative in attracting and retaining coveted experienced talent. Law firms have been flexible in bringing in talent they wouldn't have considered otherwise, whether focusing on the junior ranks of associates or evaluating associates with nontraditional backgrounds.
West Versus East
While associates are in demand across the country, the market differs depending on the region.
Corporate transactional practices dominate on both the East and West Coast, but as always, the devil is in the details.
Corporate practices on the West Coast are booming, with most of the work coming from mergers and acquisitions, emerging companies and venture capital, and capital markets practices. On the West Coast, these roles tend to be more general in nature.
One of the unique characteristics of the West Coast is that firms are not only competing with each other for associate talent, but they are also competing with in-house positions that are open to bringing in junior and midlevel law firm associates.
Given the number of companies in the area with robust legal departments, particularly in the technology industry, associates have unique opportunities to go in-house from various practices, including corporate, privacy and litigation, among others.
In addition, as rates continue to increase, building up the ranks in-house can help these companies reduce legal costs overall.
By contrast, the financial services industry dominates the East Coast market, and we often see dedicated hires into very striated practice groups, e.g., leveraged finance, project finance, aircraft finance, etc. This specialization allows firms to bill associates out at higher rates, and associates can build a practice by honing a very narrow skill set.
Other related industries, like real estate, insurance and life sciences, are also driving factors to the increase in demand. These industries are a bit more established and have larger legal departments.
While companies in those industries hire often, roles at those companies don't have the same thrill as being a part of the next big thing, which is why many younger associates have highly coveted roles at firms that focus on technology. Those roles indeed exist in New York, but associates can maximize their options if they move to the West Coast.
In the second half of 2021, we generally saw an uptick in litigation needs due to courts being back in session. As a result, the most abundant opportunities are for associates with general commercial, securities or other civil ligation experience.
In New York, even firms traditionally focused on white collar matters have expanded their civil litigation departments, creating unique opportunities for senior associates who want to increase their responsibility and build business.
Litigation is also fairly steady on the West Coast. There has been a solid need for commercial litigation and securities litigation specialists specifically, and we anticipate demand for those roles to remain strong.
Motivating Factors for Associates Contemplating a Move
Lateral associate movement is also rising due to the lack of connection many associates hold toward their current employers as a result of working from home.
This lack of connection is especially apparent in junior classes: An entire class of associates started at their firms remotely and never had the opportunity to fully integrate with their colleagues and their firm culture.
These same associates are billing hours at a rate even their senior associates can't believe. The temptations of a fresh start, a hefty sign-on bonus and potential career advancement are too hard to resist for these associates.
Senior associates are affected differently by working from home. Typically, senior associates are much more entrenched in their firms and have had the opportunity to work in person before the pandemic. They have experienced law firm culture, training and mentorship in a way that their junior counterparts have not.
These associates are fully equipped to work from home and see no adverse effect on their work product. In our experience, when senior associates are considering a lateral move, while the sign-on bonus is tempting, the potential for career advancement and continued ability to work from home is driving their decisions to go to market.
When it comes to seeking out remote working positions, it's fair to say mid- to senior-level associates will likely continue to seek out at least partially remote work opportunities.
Junior associates are also seeking remote opportunities, but whether or not that may affect their success and development is yet to be seen.
While a lack of face time may be tempting, it may not be in these associates' best interest to take on those positions until firms figure out how to better train and mentor their associates when they aren't in the office as often as they once were.
These shifting expectations and priorities among associates will continue to cause firms to change how they hire, as associates aren't looking for their life to be defined by their job anymore. As a result, firms have adapted to be flexible in unexpected ways.
The pandemic has presented unique challenges for attorneys who are parents, attorneys who have medical concerns and attorneys who are managing other exceptional circumstances.
Office by office, firms must adapt their culture to match what their talent is asking for — even if they have to deviate from overall firm policy.
We have heard from law firm partners that, despite their firms asking their associates to be in the office two to three days a week, they are limiting face time to an as-needed basis. We have even heard of firms giving associates who are parents or who have medical conditions exemptions from firm policy altogether.
As the talent wars continue into the new year, firms' offices are deviating from firm policy because their peer firms offer greater flexibility.
Heading into the new year, the No. 1 question associates should be asking is: Am I getting the training and experience I want for my long-term career goal?
If that goal is to get into the in-house department of Google LLC, then go to a firm that has ties to the tech industry. If you want to make partner, you should evaluate whether that's at your current firm or elsewhere.
At this time, associates have a unique opportunity to find their perfect fit. We strongly encourage them to consider carefully — don't make a move because others are doing it.
Instead, figure out your motivations and the appropriate action to cure whatever you are trying to solve. Now is the time for associates to position themselves for long-term success.
