Ardent Director Jane Gaunt reflects on the recent ups and downs of the legal recruitment market and makes predictions on recruitment volume, hybrid working and salaries in 2023.
What has the recruitment market been doing in the last 2 years?
Unprecedented times at a global level caused an unprecedented shift in the legal recruitment market. The initial shock waves of the pandemic caused the market to cool through much of 2020 as law firms adapted to new ways of working.
January 2021 saw the market bounce back with legal recruitment levels remaining consistently high for much of the next two years. Law firms simply weren’t adequately resourced to cope with the increase in the volume of instructions, including work delayed from 2020. Movement in the legal recruitment market was further aided by the introduction of hybrid working and “the great resignation effect”.
In 2021-2022 the US firms set the pace for a ripple effect across the top 200 firms. Many lawyers who had not been considering a move, were now reconsidering their options to take advantage of the salaries on offer. During this period, we saw the return on sign-on bonuses mainly led by US and Global firms who were competing for the best talent in the City. This not only incentivised moves but also, in some instances, allowed the buyout of large bonuses to secure talent as soon as possible
A return to private practice
The legal private practice market had one of the biggest shake ups in over a decade, as there were new factors for lawyers to consider when thinking about making a move. For the first time on record there were more lawyers returning from their once sought after in-house positions. The new hybrid working environment, combined with increased salaries, made private practice a much more attractive option than it had been only two years before.
Overall, we saw an incredible amount of recruitment, and a real reshuffle in the legal profession. The legal bubble felt quite different to the outside world, and it was a real candidate led market across the majority of practice areas.
The market in 2023: strategic growth and consolidation
Fast forward to the first two months of 2023 and the legal recruitment market remains steady. Whilst there are signs that the market has softened, and that some firms may make strategic decisions to reduce costs in the months that follow, we are still seeing a significant number of firms in growth mode, both at a national and international level.
For many, 2023 seems to be a year of consolidation and considered, strategic growth, following the success of the last two years. In most practice areas, firms are still competing for the best talent, but we aren’t seeing the use of sign-on bonuses and other financial incentives being used to entice candidates into moving. Overall, the market is operating at a more normal pace. It is our expectation that it will remain the same for much of the year to come, although it will of course depend to some extent on the state of the wider economy.
We’ve seen some record-breaking salaries in the last two years, but it’s our view that this year salary rises across private practice are likely to be more standard increases. We don’t expect to see the same headline grabbing salaries that we have seen in recent years. That said, we still expect law firms to perform well and be able to reward their staff with strong bonuses.
Hybrid working to remain
Hybrid working seems to be the new norm for law firms, but some firms are shifting the balance to more face time, which we expect to see continue throughout the year. Undoubtedly how firms approach hybrid working will continue to be an important factor for most candidates when looking to make a move. For some, working in an environment that encourages more face time will be important and for others the benefits of home working will be seen as a more critical factor. Whilst we expect all firms to continue to standardise their approach to hybrid working, the application of these policies will often be driven by the expectations of those leading individual practice areas and the work volumes in those areas.
Overall assessments for 2023
Our overall assessment of the year to date, and expectation for the year to come, is that it will remain a steady recruitment market for most of this year. For the time being we are confident that there will be a range of opportunities for candidates at all levels and across most practice areas. That said, if the last couple of years have taught us anything it really is that it’s impossible to forecast market conditions in the first couple of months of the year!
If you would like an overview of the market at your level and practice area, please contact a member of the Ardent team who will be able to assist.