Throughout 2022, with both specific in-depth analysis of practice areas such as Data Protection, Venture Capital and Investment Funds, and weekly updates on partner moves, we charted a year full of developments in the legal market. This data collection allowed us to inspect certain individual or clusters of moves and reveal particular trends. On a broader level, this analysis will provide insight on the direction the market is moving; and on a micro level, it reveals the opportunities for strategic hiring. In a turbulent time of change – whether that be the swelling of in-demand NQ salaries, or the difficulties presented by the war in Ukraine – it is even more important that we understand the legal market that we work in.
In this article, we have used our weekly updates from 2022, where we reported on a range of moves internationally, therefore it is a snapshot of the market and not the whole.
As we discussed in our last article documenting the war for talent, who will emerge in the best possible position at the end of the year very much determined by “how leadership teams respond, devise, and implement a smart and timely response” to various new issues that arise.
In a change from 2021, we captured fewer moves from the in-house market; only 45 out of our 806 documented partner moves involved in house placements. Following the post-Covid boom in the sector, with in-house working conditions, job security, and swollen salaries increasingly attracting high quality legal talent, it is only natural that hiring would slow sooner or later. It should be recognised that the in-house market makes up for a much smaller percentage of the market than private practice and they are, overall, reported less frequently in the sources we use for our updates.
Moving into 2023, it will be interesting to see how the whole market adapts to sky-high salaries combined with a greater desire for work/life balance. Curiously, a survey conducted in Canada released on the 24th of January, has shown that in-house lawyers are struggling to cope with their increased workloads; 46% of in-house counsels have seen an increase in their work-related stress and anxiety levels in the last year, compared to only 13% who have seen a decrease.
When analysing the private practice moves, we found that often a team of fee-earners will accompany a partner move, particularly if a team of partners move. At times, even a whole practice may be uprooted. In 2022, there were 131 team moves in total, with the highest concentration of those team moves happening in July with 17 moves, despite there being a lower concentration of total moves. Some of the more notable team moves in July were BCLP taking a 4-partner real estate team from DLA Piper in Frankfurt; Dentons taking a 3-partner corporate team from EY in Singapore; Paul Hastings taking a 4-partner finance team from Latham & Watkins in London; and Linklaters with a 3-partner raid on Vinson & Elkins leveraged finance practice. The other most notable moves of the year include a power play from Reed Smith who brought in highly touted New York real estate finance 12 lawyer, 5 partner team from Akerman in February. Ropes & Gray similarly made a statement in April, taking a high level 3-partner private equity team from Fried Frank in London.
There were the highest concentration of partner moves in March (126) and April (104), compared to a much slower November (48) and December (34). It can be extrapolated that this is related to the law-firm bonus structures which are decided at the end of the calendar year and paid out in the first couple of months of the new year.
October was uncharacteristically busy with over 20% more moves than any other month in the second half of the year. October was also busy with promotions, with notable names such as Kirkland & Ellis, White & Case, Covington & Burling all announcing a new cohort of partners. Alongside the cluster of partner promotions, which usually fall closer to the end of the year, 6 firms including Goodwin Procter, White & Case and Freshfields all opened up offices abroad. 58 promotions accompanied Goodwin’s new Singapore office opening.
Some of the biggest headlines come in the area of high-profile team moves. 2022 was no anomaly; lots of prominent moves made headlines throughout the year. Reed Smith was particularly active when it came to high profile moves. In February they brought in the top real estate finance team to their New York office from Akerman. Not long after, however, they lost a senior corporate duo from their German base Frankfurt to rivals McDermott Will & Emery. The two-partner team of Rolf Hunermann and Philip Schmidt have around three decades of combined experience covering a range of issues from domestic and cross-border M&A to ESG considerations and will be a huge loss. McDermott followed up that acquisition with a 4-partner raid on Orrick, Morrison & Foerster and Kirkland & Ellis to construct an extremely competitive real estate platform in New York and Chicago in May. Despite the bold acquisitions, however, McDermott Will & Emery suffered their own setback in the same month, losing 4 corporate partners across their New York and Tel Aviv offices to the fast-growing Greenberg Traurig.
For the past decade, and particularly since the Brexit referendum in 2017, the battle for a spot in the fertile Dublin market has been ongoing. Pinsent Masons opened up first in the wake of Brexit with a Financial Services and Technology-focussed practice – their 4th international office opening in 18 months at the time and were eagerly followed between 2017 and 2019 by Covington & Burling, DLA Piper, Freshfields, Clyde & Co. and Simmons & Simmons – who poached Mason Hayes & Curran’s head of investment funds and financial regulation Fionan Breathnach to lead them out.
In July, Browne Jacobsen opened up their first international office in Dublin with an end-to-end TMT practice. Not only ambitious in their growth, Browne Jacobson became the first law firm in history to top the Social Mobility Employer Index in 2021 – and impressively retained that spot in 2022. The index is the leading authority on social mobility in the workplace and demonstrates Browne Jacobson’s targeted efforts to open up the legal profession to young people of all backgrounds. Addleshaw Goddard launched in Dublin as well through a merger with local firm Eugene F. Collins, and Squire Patton Boggs – poaching Dennis Agnew, the head of transactions at Pinsent Masons – have set a date in 2023 to follow suit. Ropes & Gray have started the new year with purpose as they too opened in Dublin with Competition. There have been repeated whispers in the market that Bird & Bird and Linklaters are contemplating expansion into Dublin as well, so it will be interesting to see how the market continues to develop in 2023.
Potentially one of the most notable moves of the year was a rare Goodwin Proctor raid on Latham’s Santa Monica office, which saw three corporate partners joining the US firm. Goodwin have historically relied on the inward promotion of their own exceptional talent pool, so a 3-partner hire from a globally leading law firm is a clear statement of intent. Latham also lost a 4-partner finance team to Paul Hastings in London – a similarly impactful statement from Paul Hastings as they look to compete with the very top firms.
Cleary Gottlieb is a firm quite similar to Goodwin with regards to their hiring strategy – they also prefer to nurture their homegrown talent rather than rely on lateral hires. Cleary raided Kirkland & Ellis – a firm who has been on their own frenzied hiring spree in 2022 – for 3 employment, litigation and funds partners across their New York Washington and London offices. The Magic Circle firms seem have changed their hiring strategy approach, and are looking to build upon their strength in Europe and look toward the US market. A prime example of these efforts came from the 3-partner finance team that Linklaters took from Alston & Bird in New York. Along with the acquisition of a 3-partner finance team taken from Vinson Elkins for their London office, the moves are a symbol of the recent magic circle firm’s efforts to expand their lateral hire operations.
In Frankfurt specifically, Willkie Farr & Gallagher have been making waves over the past few years, with more than ten partner and counsel hires. In May, Willkie brought in leading capital markets lawyers Simon Weiss and Joseph Marx from McDermott Will & Emery, which has not only boosted their global capital markets platform, but is also a demonstration of the firms continuing investment into the German market.
BCLP – despite having quite a turbulent and unsteady year – brought over a 4-partner real estate team from DLA Piper in July, making a marked investment in the Frankfurt market as well. BCLP has had a difficult start to 2023 as being named “the golden turd”. As they start 2023 with more uncertainty surrounding the environment and their culture, we might expect to see some significant departures from the firm and a shakeup in senior management.
2022 was certainly one of the most interesting years we have kept track of. It is unlikely we will ever see a year with such aggressive salary inflation for NQs again, and in the face of a recession, US firms have demonstrated their impregnable attitude when it comes to hiring. 2023 will be a crucial year to see whether the more ambitious hiring strategy from magic circle firms both internationally and in the UK will see their profits keep pace with top US firms. They can certainly expect the hiring frenzy to roll on. There is a counter-cyclical relationship between transactional and disputes hires, so as we are seeing the transactional market slow, we would expect the disputes market to become more active over the course of 2023.