The State Of The Legal Talent Market: A Data-Driven Analysis

Check out these insights and information, courtesy of Firm Prospects.

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What was 2023 like as a year for law firm hiring? And what can we expect in 2024? Is now a good time to make a lateral move? What specialties are most in-demand at the current time? We all have our own anecdotal senses of the talent market, but actual data is more useful.

One of the richest troves of information is that of Firm Prospects, a provider of law firm analytics, market intelligence, and career development tools used throughout the legal industry. They aggregate data from publicly available sources and apply different forms of artificial intelligence and human review to create a market-leading research and career development platform.

I’m connected with its CEO, Adam Oliver, on LinkedIn, where he regularly posts fascinating stats about hiring in the legal sector. If you don’t already follow him, you definitely should. Given his great updates, I decided to interview him about the state of the market for legal talent.

DL: Thanks for joining me, Adam! Let’s start by taking a look back. How would you describe 2023 as a year for legal hiring? It felt significantly slower than 2021 and 2022—but that’s just my own impression, not based on empirical information.

AO: You’re correct: 2023 was a steady year for lateral hiring, but the numbers were well below 2021 and 2022—down 16.9 percent and 19.3 percent, respectively.

What really stands out when comparing 2023 to the previous two years, however, is the number of corporate hires. Firms hired 53 percent and 42.8 percent fewer corporate attorneys in 2023, as compared to 2021 and 2022.

DL: Let’s now turn to specific firms—I find the firm rankings you post on LinkedIn quite interesting. Which firms were the biggest consumers of entry-level talent in 2023?

AO: Probably no real surprises here, but based on currently available data, Kirkland & Ellis led all other firms, with 175 entry-level hires in 2023. That’s a large entry-level class. When I started at Testa Hurwitz back in 2001, I was part of a class of 63 attorneys, and that felt huge. Simpson Thacher tops the list of hires directly from T-14 schools, with 109.

DL: Fascinating data, Adam—and it would have been quite useful to me during my detour into legal recruiting. Speaking of which, folks in the recruiting world will be most interested in the hiring of experienced attorneys, since those candidates are the ones that recruiters work with. How did 2023 compare to 2022 and 2021 in terms of the hiring of experienced attorneys?

AO: Last year we tracked over 19,000 experienced attorney hires into the FP 3000, a group of hand-selected firms that we track closely at Firm Prospects. By way of comparison, we tracked 22,926 and 23,657 total hires into the FP 3000 in 2021 and 2022, making for declines of 17.2 percent and 19.6 percent, respectively.

Of the 19,000 hires into the FP 3000 in 2023, around 10,600 were made by Am Law 200 firms (a subset of the FP 3000). This compares to 15,420 and 15,604 Am Law 200 hires in 2021 and 2022, making for declines of 31.2 percent and 32.1 percent, respectively.

DL: Based on the layoff activity in 2023, would it be correct to guess that transactional practices were hit especially hard?

AO: Yes—there was a precipitous drop in demand for capital markets, M&A, and other transactional attorneys in 2023, as compared to 2021 and 2022. You can see in the chart below the sharp decline from 2021 into 2023. Note, though, that, although slower than 2018 and 2019, corporate hires were down only 14 percent and 10 percent, respectively.

DL: And which firms were the biggest consumers of lateral talent in 2023?

AO: The firms with the most total hires in 2023 were:

1. Lewis Brisbois Bisgaard & Smith LLP

2. Kirkland & Ellis LLP

3. Gordon & Rees, LLP

4. Wilson, Elser, Moskowitz, Edelman & Dicker

5. Paul, Weiss, Rifkind, Wharton & Garrison LLP

6. Holland & Knight LLP

7. DLA Piper

8. Simpson Thacher & Bartlett LLP

9. Goodwin Procter LLP

10. Willkie Farr & Gallagher LLP

It’s worth noting that, even though these firms brought on more attorneys than any other firms in our database, not all of them actually grew in 2023. Lewis Brisbois, for example, had a net loss of 185 attorneys.

We can also get a bit more granular and look at total associate and partner hires by firm. The top three firms in terms of associate hires were:

1. Kirkland & Ellis LLP

2. Lewis Brisbois Bisgaard & Smith LLP

3. Paul, Weiss, Rifkind, Wharton & Garrison LLP

At the partner level, the top three firms were:

1. Lewis Brisbois Bisgaard & Smith LLP

2. Gordon & Rees, LLP

3. Holland & Knight LLP

DL: I was chatting with a law student recently who wanted to know which areas are “hot” right now. I’m generally not a fan of making career decisions based on hotness, since it changes over time; I tell people to make choices based on what they enjoy and are good at. But just out of curiosity, what areas of law are hot right now in terms of lateral hiring?

AO: “Hot” is of course relative, but we did see an upward trend in corporate hires in Q4 of 2023, with 529 lateral hires into corporate groups. In fact, there were more corporate hires in Q4 than we saw since 2022. With that said, Q4 hires of corporate laterals were still less than half of what there were in Q2 of 2022, where we tracked 1,139.

We also tracked an uptick in litigation in Q4, with 2,007 total hires—a quarterly total we haven’t seen for several years.

Year-over-year, labor and employment was the one area where we tracked actual growth in 2023 as compared to 2022.

DL: Finally, let’s turn to the present—and the future. How would you describe the state of the lateral market right now, and what can we expect for 2024?

AO: Based on what I’m seeing from the January hiring numbers, 2024 appears to be off to the same slow-and-steady levels of hiring that we tracked throughout 2023.

With that said, I think that there are three factors indicating that law firm hiring in 2024 could outpace what we tracked in 2023, particularly in M&A and capital markets:

(i) entry-level hiring numbers into corporate groups are up;

(ii) Q4 of 2023 saw more experienced attorney hires at the associate level than we’ve tracked since 2022; and

(iii) we’ve already tracked well over 1,100 new law firm job listings in 2024, 140 of them for corporate attorneys.

How quickly hiring picks up, however—or whether it does at all—will be determined in part by broader economic and political factors.

DL: Thanks so much for your time and insight, Adam. I look forward to your continued updates on LinkedIn and to connecting again in the future!

Would you like to learn more? Law firms, search firms, and in-house legal departments can get direct access to Firm Prospects’ Engage platform, from which all the above data was pulled. Feel free to reach out here: https://engage.firmprospects.com/demo. If you’re an attorney who would like to set up a free account to access market-leading research and career development tools, you can use this link: Firm Prospects.

Disclosure: Thanks to Firm Prospects for sponsoring this post. Firm Prospects is an all-in-one platform connecting the legal industry with data-driven law firm analytics, market intelligence and career development tools. To learn more, please visit the Firm Prospects website at www.firmprospects.com.