Canadian Legal Market Update: The War for Legal Talent Continues
Earlier this year, private equity resilience and a flourishing technology sector drove strong M&A activity and the biggest ever Q1 crop of IPOs by Canadian companies in the past 15 years. Carrying forward the momentum into Q2, we saw private practice and in-house recruitment levels continue to rise, increased importance for recruitment strategy and purpose, law firms leaning into large signing bonuses, and a significant number of lawyers preferring hybrid (remote and in office) work models as restrictions are lifted.
In-house positions continued to increase.
Demand for in-house counsel continued to rise, challenging employers to take a holistic view of compensation, work-life balance, and challenging work. Intangible items, such as flexible work arrangements and learning and advancement, were also key factors in attracting, retaining, and engaging legal counsel.
We saw legal department hiring for all levels of in-house counsel, from junior legal counsel to General Counsel. Well-rounded corporate lawyers – particularly those with financing, compliance, data privacy, and/or IT experience – have been in especially high demand.
Strong demand for corporate associates across North America.
Demand for corporate associates with M&A, corporate governance, securities, and financing experience was exceptionally high across Canada. The technology and start-up/emerging companies’ sector have also undergone significant growth, and many law firms focused on hiring associates in these areas.
Unprecedented levels of deal making also led to increased demand for corporate associates in the US, especially in New York City and San Francisco. We’re seeing Canadian legal talent at top-tier law firms being headhunted by US law firms, which further compounds the talent shortage in our market. We spoke with an associate at a top law firm who said over five corporate lawyers were poached by US firms in the past few months alone!
Increased importance of strategy and purpose.
The pandemic forced lawyers to evaluate their purpose, and firms and legal departments to focus on strategic and value-added growth. A highly competitive lateral market has since shifted organizations towards ‘get the job done’-type of hiring; however, no matter the market, we advise employers to always have a clear grasp on their recruitment strategy to ensure long-term success.
We also found candidates were especially drawn to organizations with a demonstrated commitment to equity, diversity, and inclusion (EDI). There is a heightened need for more diverse talent, and we strongly encourage employers to further EDI initiatives through their recruitment policies and processes.
Law firms leaned into large signing bonuses.
Generally, active market conditions correspond to highly profitable years, so law firms found themselves offering significant signing bonuses in addition to matching Covid bonuses given to associates at most large firms. Balance is key – compensation structures should allow room for adequate and proportional incentives as the candidate progresses. A clear understanding of the current market is key to determining compensation that is both competitive and sustainable over the long term.
Workplace models will be redefined.
As vaccine rollouts continue, many lawyers said they would prefer a mix of in-office and remote working going forward. The timeline and structure of return to office plans depends on the organization. Some clients have mentioned returning in early fall, with several implementing a rotating schedule to limit the number of people in the office at any given time.
Some lawyers will have hybrid work models on a permanent basis; however, since some offices are locked into multiyear leases, we anticipate some firms will strongly encourage lawyers to return to the office as restrictions are lifted.
The war for legal talent will carry into Q3.
Pre-Covid, recruitment was typically slower over the summer months; however, the market continues to surge, and it appears the hiring boom will carry into Q3. As we step into the next ‘new normal’, it’s crucial for lawyers, law firms, and legal departments to evaluate their needs to build more resilient careers and teams that will thrive in a post-Covid world.
Dal Bhathal is a Managing Partner at The Counsel Network, a Canadian legal recruitment firm specializing in legal talent management strategies covering all levels of lawyers and practices for both corporate legal departments and law firms. To discuss your retention strategies, contact Dal at dal@thecounselnetwork.com or 416.364.6654/604.643.1708.
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