New York: High Stakes, Lower Predictability
New York remains the centre of the US legal market, with high-value work in private equity and finance continuing to drive demand. It is still where firms compete most aggressively for lateral partners and where compensation is highest. But the market is tightening, and that is creating a structural hiring problem.
A slowdown in deal activity has made firms more selective, particularly below partner level. At the same time, the traditional model, high pay in exchange for intensity, is becoming less effective. Associates are more willing to move, and compensation alone is no longer enough to retain talent.
What firms are struggling with:
• Paying top-of-market salaries without guaranteed utilisation
• Increased lateral movement despite compensation premiums
• Difficulty predicting hiring needs in a volatile deal environment
What this means in practice:
Firms can no longer rely on compensation as the primary retention tool. Hiring strategies need to become more targeted, with a clearer link between practice demand and headcount. Retention is shifting towards career progression, culture, and flexibility, not just pay. New York remains the most lucrative market, but it is also where the pressure on the traditional hiring model is most visible.
California: The Skills Gap Is the Real Bottleneck
In California, hiring is being shaped by the technology sector. In San Francisco and Silicon Valley, demand is strongest in areas such as data privacy, AI, and technology transactions. Firms are increasingly looking for lawyers who not only advise on legal issues, but who understand the underlying technologies. This is changing the profile of talent and creating a mismatch.
What firms are struggling with:
• A limited pool of lawyers with both legal and technical expertise
• Increased competition with in-house teams and tech companies
• Rapid shifts in demand tied to the tech cycle
What this means in practice:
The constraint is no longer just hiring volume, it is capability. Firms need to rethink how they assess talent, invest in upskilling, and compete with non-traditional employers. Relying purely on lateral hiring is not enough when the talent pool itself is narrow.
The market is also more cyclical, closely tied to the performance of the tech sector, while expectations around flexibility tend to be more progressive than in New York.
California is pushing firms to rethink both what skills they hire for and how they build them internally.
Texas: Growth Is Easier Than Getting It Right
Cities such as Houston and Dallas are seeing sustained growth, driven by energy, infrastructure, and a broader shift of corporate activity into the state. For firms, this creates a compelling expansion story, with lower costs than coastal markets and strong demand.
But expansion brings its own challenges.
What firms are struggling with:
• Scaling teams quickly without diluting quality
• Transferring culture and standards from other offices
• Balancing lower cost structures with competitive compensation
What this means in practice:
Success in Texas is less about winning individual lateral hires and more about building sustainable teams. Firms that treat Texas as a simple extension of New York often misjudge the market. Hiring strategies need to reflect local expectations around lifestyle, progression, and long-term stability.
The market is competitive, but more balanced, with a different relationship between pay, workload, and lifestyle, one that is increasingly attractive to relocating lawyers.
A More Segmented Market And More Complex Decisions
Taken together, these markets reflect a broader shift in the US legal sector. Rather than a single hiring model, firms are now operating across fundamentally different markets:
• New York: high revenue, high pressure, declining effectiveness of pay-led retention
• California: skills shortage, tech-driven demand, competition beyond law firms
• Texas: growth market, operational scaling challenges, cost advantage
The real issue for firms:
Many are still applying a single hiring strategy across all three.
What needs to change:
Location strategy is no longer just about presence, it is about alignment. Where firms invest, what talent they prioritise, and how they structure teams must reflect the realities of each market.
Beyond a Single Narrative
It is still possible to talk about a US legal market, but that view is becoming less useful. The most meaningful changes are happening at a regional level, where differences in industry, economics, and culture are shaping how firms hire and how lawyers make career decisions.
The shift is this:
• Firms need market-specific hiring strategies
• Lawyers are making market-based career choices, not just firm-based ones
What is emerging is not one system, but several each requiring a different definition of success.
Contact us:
To discuss the US market in more detail, please contact Connor Spicer email connor.spicer@wearebuchanan.com