As I guessed, a few readers preferred to email me. I'm going to post comments on their behalf, with their permission, keeping them anonymous. From one (very thorough and thoughtful) reader:
"1. Market: As always, transactional will be mostly driven by broader economic forces. However, from a Biglaw per-lawyer perspective, I think it is more likely to stay hot than recede. Market consists of both supply and demand and part of what we see is that the existing supply is being stretched to the limit; law firms count on increasing hours per lawyer to get through the busy periods but some of the post-recession classes were too small to meet this level of work. Anecdotally, I think an increasing number of Biglaw lawyers aren't going to just go from 2000 billables to 2500 (for what benefit if they aren't sticking around to make partner?). Furthermore, it's difficult for firms to 're-tool' lawyers into transactional practices (I can't speak to litigation) five years into their careers, although I'm sure many firms are trying. Long term I'm sure the market will work itself out but I see a continuation for the next few years at least. The increasing rates reflect this market reality, which will also be reflected in record high PPP...this is evidence that the market for Biglaw work is as hot as ever.
2. Laterals: Lateraling of partners is just up and to the right, and I see no break in that trend; as more and more partners lateral, it reduces the stigma of it, and partners with a portable book of business have too great of an incentive to move if their existing firm isn't paying enough. Associate lateral movement I think continues to be high as well, due to the effects mentioned above: law firms are just going to get increasingly aggressive about signing bonuses in order to shore up their ranks. Given rates, it is economically rational for big firms to continue to up signing bonuses to $100K or so for quality mid-level associates, since those associates return much more in annualized billings, and the cost of being understaffed is losing out on work.
3. Great Resignation: Increasing number of associates will feel burned out, but Biglaw bonuses will continue to be high to keep folks. So this one will stay 'on trend.'
4. In-Office: Very few firms (let's say ~V10, plus some boutiques) will actually be able to enforce an in-office requirement when a competitor firm, doing most of the same work, will offer associates a six-figure signing bonus and ability to work remotely. This may take time to work its way through the system.
5. DEI: I think this is likely to continue to be a focus, although maybe not as great as we saw in summer of 2020. Firms know that incoming associates are looking at these, and it is relatively easy enough for them to donate additional money and resources. I'm not sure I see firms fundamentally changing their business practices or culture in order to attract and retain more diverse backgrounds, however."
Speaking as someone who lateraled this year and billed 2750+ hours in both 2020 and 2021, I’m exhausted. No amount of additional money is going to change the fact that I’m exhausted. I don’t see an end in sight to being short-staffed; as soon as we hire a lateral, it seems like someone else leaves, and mid levels and seniors don’t grow on trees. I also don’t see an end in sight to the sheer amount of deal work or our clients’ expectation of an immediate turnaround on work, 24 hours a day, everyday. Something has to give, and I don’t know what it will be.
In terms of COVID, 2022 will be the same as 2021. I expect another variant sometime soon. Still, the firms will push for office reopening. I do not expect big law to follow Quinn Emanuel’s precedent.
Lateral hiring, at least with respect to corporate mid-level associates, will continue to be busy. Firms hired a great number of lateral associates but do not provide true training or mentoring to them as partners/counsels are busy navigating high volume of deals. Unsatisfied with their experience, associates will seek to make another move.
"You didn't ask about it, but the in-house market is very hot as well. I think in-house compensation—especially at the hottest companies and most in-demand sectors—is likely trending up as well."
As I guessed, a few readers preferred to email me. I'm going to post comments on their behalf, with their permission, keeping them anonymous. From one (very thorough and thoughtful) reader:
"1. Market: As always, transactional will be mostly driven by broader economic forces. However, from a Biglaw per-lawyer perspective, I think it is more likely to stay hot than recede. Market consists of both supply and demand and part of what we see is that the existing supply is being stretched to the limit; law firms count on increasing hours per lawyer to get through the busy periods but some of the post-recession classes were too small to meet this level of work. Anecdotally, I think an increasing number of Biglaw lawyers aren't going to just go from 2000 billables to 2500 (for what benefit if they aren't sticking around to make partner?). Furthermore, it's difficult for firms to 're-tool' lawyers into transactional practices (I can't speak to litigation) five years into their careers, although I'm sure many firms are trying. Long term I'm sure the market will work itself out but I see a continuation for the next few years at least. The increasing rates reflect this market reality, which will also be reflected in record high PPP...this is evidence that the market for Biglaw work is as hot as ever.
2. Laterals: Lateraling of partners is just up and to the right, and I see no break in that trend; as more and more partners lateral, it reduces the stigma of it, and partners with a portable book of business have too great of an incentive to move if their existing firm isn't paying enough. Associate lateral movement I think continues to be high as well, due to the effects mentioned above: law firms are just going to get increasingly aggressive about signing bonuses in order to shore up their ranks. Given rates, it is economically rational for big firms to continue to up signing bonuses to $100K or so for quality mid-level associates, since those associates return much more in annualized billings, and the cost of being understaffed is losing out on work.
3. Great Resignation: Increasing number of associates will feel burned out, but Biglaw bonuses will continue to be high to keep folks. So this one will stay 'on trend.'
4. In-Office: Very few firms (let's say ~V10, plus some boutiques) will actually be able to enforce an in-office requirement when a competitor firm, doing most of the same work, will offer associates a six-figure signing bonus and ability to work remotely. This may take time to work its way through the system.
5. DEI: I think this is likely to continue to be a focus, although maybe not as great as we saw in summer of 2020. Firms know that incoming associates are looking at these, and it is relatively easy enough for them to donate additional money and resources. I'm not sure I see firms fundamentally changing their business practices or culture in order to attract and retain more diverse backgrounds, however."
When the Fed takes away the punch bowl, there’s gonna be a crash. And it will be ugly.
NY to 225!!!
Speaking as someone who lateraled this year and billed 2750+ hours in both 2020 and 2021, I’m exhausted. No amount of additional money is going to change the fact that I’m exhausted. I don’t see an end in sight to being short-staffed; as soon as we hire a lateral, it seems like someone else leaves, and mid levels and seniors don’t grow on trees. I also don’t see an end in sight to the sheer amount of deal work or our clients’ expectation of an immediate turnaround on work, 24 hours a day, everyday. Something has to give, and I don’t know what it will be.
biglaw will make a ton of new non-equity partners while equity partners remain the same
In terms of COVID, 2022 will be the same as 2021. I expect another variant sometime soon. Still, the firms will push for office reopening. I do not expect big law to follow Quinn Emanuel’s precedent.
Lateral hiring, at least with respect to corporate mid-level associates, will continue to be busy. Firms hired a great number of lateral associates but do not provide true training or mentoring to them as partners/counsels are busy navigating high volume of deals. Unsatisfied with their experience, associates will seek to make another move.
Additional reader comment:
"You didn't ask about it, but the in-house market is very hot as well. I think in-house compensation—especially at the hottest companies and most in-demand sectors—is likely trending up as well."