The year 2023 was a dynamic and competitive one for the big law market, as firms sought to expand their capabilities, attract top talent and increase their profitability. Here are some of the key trends and developments that shaped the legal landscape in 2023.
Lateral hires: The demand for experienced lawyers remained high, especially in practice areas such as corporate, litigation, intellectual property, antitrust and regulatory. Many firms made strategic lateral hires to strengthen their existing teams, enter new markets or diversify their services. Some of the notable lateral moves in 2023 were:
– Chris Thel and team of 6 others joined K&L Gates as partners in the corporate and private equity practice, after leaving Dentons. Thel and team are all leading Corporate lawyers who are recognised as leaders in the private equity, tax, M&A/transactions, and benefits and exclusive compensation areas.
– Michael Urschel and a team 9, 2 partners and 7 associates left King & Spalding to join Milbank in the Structured Finance Practice. Urschel’s group is renowned for focuses on whole business and digital securitisations.
– Neel Sachdev was unarguably one of the biggest London lateral moves this year, hailed as one of London’s last rainmakers he left Kirkland to Paul Weiss this was one of the biggest power grabs with Neel and team resigning on an August Sunday, this saga of moves between the two firms has had us gripped since August and the dust is still yet to settle, the current count is 35 lawyers following Neel with the latest two moving last week.
Financials: The big law market continued to grow in 2023, as firms reported higher revenues, profits and profits per partner (PPP). According to the American Lawyer’s annual ranking of the top 100 U.S. law firms by revenue, the total revenue of the Am Law 100 increased by 7.5% to $115 billion, while the average PPP rose by 8.2% to $2.7 million.
PwC UK summarised that the legal sector as a whole has had a very strong year with firms achieving an average of 8-10% fee income growth and firms remaining largely optimistic about future growth. However, the last year has continued to be turbulent with ongoing macroeconomic volatility, increasing cost pressures, and high inflation. Next year, pricing will remain a key focus area as cost pressures could lead to a fall in profits.
Mergers: The big law market witnessed several mergers and combinations in 2023, as firms sought to enhance their global presence, broaden their practice areas, and leverage their synergies. Some of the major mergers and combinations in 2023 were:
– Allen & Overy and Shearman & Sterling was the biggest merger of 2023, the deal is worth $3.4 billion and created one of the largest legal practices in the world with approximately 3950 lawyers and 800 partners across 48 offices. This huge transatlantic deal is expected to close in May 2024.
– Holland & Knight were the first big 2023 merger when in January it was announced that they would be merging with Nashville based Waller Lansden Dortch & Davis. The deal created a firm of nearly 2000 lawyers operating under the Holland & Knight name, as a firm that has consistently grown through mergers it will be very interesting to see where Holland & Knight grows next.
– Fieldfisher announced December of this year that they would be ending their seven-year arrangement with Italy’s SASPI, due to ‘’strategic objectives no longer being closely aligned”, does this mean that we should expect to see a new merger or alliance from Fieldfisher next year in the region?