Quarter 3 Overview
As predicted during Q1 and Q2, the market became more active this quarter. For example, the interview hire ratio has continued to tighten. From a recruitment perspective, this usually signals improvements in market conditions, as firms and clients are hiring a larger percentage of candidates from early consideration. It also suggests that in some cases firms are being a little less ‘picky’, as workflow is increasing and they are starting to execute more ambitious growth plans.
Hiring Activity
Hiring levels started to increase a little during Q3 and we expect them to rise much more over the remainder of the quarter. With summer associate and first-year class onboarding absorbing the majority of HR and recruiting bandwidth, there is likely to be some pent-up demand for lateral hiring towards the end of Q3 and as we move into Q4.
In August, lateral job openings surpassed job closings for the first time since December 2022, indicating positive consumer sentiment and market movements. The total number of lateral job openings remained largely consistent across the market during Q2 and in Q3 so far, and we expect this to jump a little during September.
Market Trends
We’ve experienced some unusual trends in Q3, particularly in the lateral partner market. It is hard to recall a three-to-four-month period where we have seen so many ‘elite’ or high-profile lateral partner moves.
Although the lateral partner market has remained busy, activity is usually concentrated across tier 1 and tier 2 partners (junior to mid-level), not the top 10-20% of partners at their respective firms – in other words, the highest earners. With regard to associates, signs have pointed towards an increase in transactional hiring and a spike in AmLaw50 recruitment, although this was not totally unexpected.
In terms of industries, interestingly, we are now seeing a genuine return to job openings in M&A, Finance and Funds. This is a result of an increase in consumer confidence amidst a slight uptick in the predictability of economic conditions.
IP Litigation, Antitrust, Litigation and, more recently, general transactional have proved to be the busiest practice areas. IP Litigation continues to be the hottest hiring trend of 2023 and is showing no signs of slowing down. Antitrust continues to be active, owing to several regulatory changes and large-scale mergers or ‘mega’ transactions coming under scrutiny.
Salary Levels
As expected, after the dramatic increases throughout 2022 and 2023, salaries and the top ‘market’ pay-scale adopted by the majority of the AmLaw100 have stayed the same. Although they are not at the levels of 2021/2022 (due to the transactional ‘boom’), we are noticing a few premiums for top litigators and, of course, IP Litigators with the ‘right’ technical background.
In-Demand Skill Sets
Turning to skill sets, mid-level to senior associates and lateral partners with strong books of transferable business remain the most in demand. This is particularly the case across more ‘contentious’ practice areas. It is also notable that we have seen a return to junior associate lateral hiring, which is promising in terms of the general growth sentiment of firms.
Skill sets in the shortest supply are still mostly found across IP Litigation but, in addition, more recently those relating to Restructuring/ Bankruptcy have been less readily available than we may have estimated.
Looking Ahead to Q4
As we approach what many in the industry consider to be ‘lateral season’, it is anticipated that we will see an increase in hiring activity. Lateral season is so called because several key factors combine to create favorable hiring conditions.
For example, HR/internal recruitment team bandwidth has usually improved after the close of summer associate and first-year associate onboarding, plus hiring partners have returned from summer vacations. From the end of September/start of October onwards, once the lateral hire is made, firms are often open to new additions starting after collecting their bonuses in the new year, creating an element of financial convenience for all parties. The effect of this is likely to be an increase in lateral movement and the talent pool over Q4.
In terms of skill sets, IP Litigation will almost certainly remain in high demand for the remainder of this year and lateral partner hiring will continue to be busy. However, in Q4 we also anticipate a meaningful return to transactional practice group hiring (M&A etc). AmLaw50 and ‘elite’ firms are predicted to see the biggest spike in lateral hiring activity – having been pending all year, we are now seeing strong signs of this happening. For the same reasons as in Q3, salaries will almost certainly stay the same in the next quarter.
The biggest challenge facing candidates in Q4 is the competition for the most desirable positions, as a result of increasing appetite to make a lateral move. Candidates should take into consideration that it is ‘lateral season’ and that the best firms in the industry are starting to return to market.
As activity starts to ramp up towards the end of the year, employers are likely to find staying competitive in the hiring market challenging. As elite firms return to market and job openings start to exceed job closings, firms will need to start making more attractive offers again, as candidates will often have interest from multiple competitors. The best advice for firms is to prepare for an increasingly dynamic market at a time when they should begin to seen an upsurge in workflow.
[/fusion_text][fusion_text columns=”1″ animation_direction=”left” animation_speed=”0.3″ animation_delay=”0″ hide_on_mobile=”small-visibility,medium-visibility” sticky_display=”normal,sticky” column_spacing=”150″]Quarter 3 Overview
As predicted during Q1 and Q2, the market became more active this quarter. For example, the interview hire ratio has continued to tighten. From a recruitment perspective, this usually signals improvements in market conditions, as firms and clients are hiring a larger percentage of candidates from early consideration. It also suggests that in some cases firms are being a little less ‘picky’, as workflow is increasing and they are starting to execute more ambitious growth plans.
Hiring Activity
Hiring levels started to increase a little during Q3 and we expect them to rise much more over the remainder of the quarter. With summer associate and first-year class onboarding absorbing the majority of HR and recruiting bandwidth, there is likely to be some pent-up demand for lateral hiring towards the end of Q3 and as we move into Q4.
In August, lateral job openings surpassed job closings for the first time since December 2022, indicating positive consumer sentiment and market movements. The total number of lateral job openings remained largely consistent across the market during Q2 and in Q3 so far, and we expect this to jump a little during September.
Market Trends
We’ve experienced some unusual trends in Q3, particularly in the lateral partner market. It is hard to recall a three-to-four-month period where we have seen so many ‘elite’ or high-profile lateral partner moves.
Although the lateral partner market has remained busy, activity is usually concentrated across tier 1 and tier 2 partners (junior to mid-level), not the top 10-20% of partners at their respective firms – in other words, the highest earners. With regard to associates, signs have pointed towards an increase in transactional hiring and a spike in AmLaw50 recruitment, although this was not totally unexpected.
In terms of industries, interestingly, we are now seeing a genuine return to job openings in M&A, Finance and Funds. This is a result of an increase in consumer confidence amidst a slight uptick in the predictability of economic conditions.
IP Litigation, Antitrust, Litigation and, more recently, general transactional have proved to be the busiest practice areas. IP Litigation continues to be the hottest hiring trend of 2023 and is showing no signs of slowing down. Antitrust continues to be active, owing to several regulatory changes and large-scale mergers or ‘mega’ transactions coming under scrutiny.
Salary Levels
As expected, after the dramatic increases throughout 2022 and 2023, salaries and the top ‘market’ pay-scale adopted by the majority of the AmLaw100 have stayed the same. Although they are not at the levels of 2021/2022 (due to the transactional ‘boom’), we are noticing a few premiums for top litigators and, of course, IP Litigators with the ‘right’ technical background.
In-Demand Skill Sets
Turning to skill sets, mid-level to senior associates and lateral partners with strong books of transferable business remain the most in demand. This is particularly the case across more ‘contentious’ practice areas. It is also notable that we have seen a return to junior associate lateral hiring, which is promising in terms of the general growth sentiment of firms.
Skill sets in the shortest supply are still mostly found across IP Litigation but, in addition, more recently those relating to Restructuring/ Bankruptcy have been less readily available than we may have estimated.
Looking Ahead to Q4
As we approach what many in the industry consider to be ‘lateral season’, it is anticipated that we will see an increase in hiring activity. Lateral season is so called because several key factors combine to create favorable hiring conditions.
For example, HR/internal recruitment team bandwidth has usually improved after the close of summer associate and first-year associate onboarding, plus hiring partners have returned from summer vacations. From the end of September/start of October onwards, once the lateral hire is made, firms are often open to new additions starting after collecting their bonuses in the new year, creating an element of financial convenience for all parties. The effect of this is likely to be an increase in lateral movement and the talent pool over Q4.
In terms of skill sets, IP Litigation will almost certainly remain in high demand for the remainder of this year and lateral partner hiring will continue to be busy. However, in Q4 we also anticipate a meaningful return to transactional practice group hiring (M&A etc). AmLaw50 and ‘elite’ firms are predicted to see the biggest spike in lateral hiring activity – having been pending all year, we are now seeing strong signs of this happening. For the same reasons as in Q3, salaries will almost certainly stay the same in the next quarter.
The biggest challenge facing candidates in Q4 is the competition for the most desirable positions, as a result of increasing appetite to make a lateral move. Candidates should take into consideration that it is ‘lateral season’ and that the best firms in the industry are starting to return to market.
As activity starts to ramp up towards the end of the year, employers are likely to find staying competitive in the hiring market challenging. As elite firms return to market and job openings start to exceed job closings, firms will need to start making more attractive offers again, as candidates will often have interest from multiple competitors. The best advice for firms is to prepare for an increasingly dynamic market at a time when they should begin to seen an upsurge in workflow.
[/fusion_text][fusion_text animation_direction=”left” animation_speed=”0.3″ animation_delay=”0″ hide_on_mobile=”large-visibility” sticky_display=”normal,sticky”]Salaries
| Role New York, DC, San Fran: The Elite (AmLaw 100) |
Private Practice – US Firm Permanent Salary Per Annum US$ Range (Base Salary) |
|---|---|
| Partner (Equity) | 1.4m (average total comp) |
| Counsel / Salaried Partner | 400 – 550k |
| 8th year | 365 – 415k |
| 7th year | 350 – 400k |
| 6th year | 330 – 370k |
| 5th year | 305 – 345k |
| 4th year | 275 – 295k |
| 3rd year | 240 – 250k |
| 2nd year | 215 – 225k |
| 1st year | 205 – 215k |
| New York: Mid Market (AmLaw 100 -200) |
Private Practice – US Firm Permanent Salary Per Annum US$ Range (Base Salary) |
|---|---|
| Partner (Equity) | 800k (average total comp) |
| Counsel / Salaried Partner | 315 – 450k |
| 8th year | 300 – 415k |
| 7th year | 275 – 400k |
| 6th year | 255 – 370k |
| 5th year | 240 – 345k |
| 4th year | 225 – 295k |
| 3rd year | 200 – 250k |
| 2nd year | 180 – 225k |
| 1st year | 150 – 215k |
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