Market update – Legal Recruitment Trends for February 2024
In a market marked by twists and turns, the Canadian economy has proven its resilience. As we navigate what appears to be a period of relative stability, it’s crucial to remember that stability is not static. Now more than ever, lawyers and legal employers must proactively navigate market conditions, assessing their needs to foster resilient careers and teams for the long run.
Below is a rundown of legal recruitment trends for February 2024.
Insights for private practice
Typically, different practice areas are busy at different times. Last year, high interest rates dampened M&A and securities activities. Counter-cyclical practices, including litigation, labor & employment, and insolvency, saw a slight uptick in the fall, which is usually associated with economic challenges.
Nonetheless, the outlook for 2024 is positive as forecasts anticipate the stabilization of interest rates and inflation, which may result in a slight rebound in corporate work. Lateral hiring remains steady as firms continue to make selective, strategic hires, focusing on high quality legal talent and partners with strong practices.
Notably, the closure of Minden Gross has cast a shadow over the Toronto legal market. As a significant regional firm, its closure makes causes most to step back and evaluate what it means for the entire legal community. While it might not affect everyone directly, it reminds us that the legal landscape is always changing, and being strategic and adaptable is crucial.
Succession planning: critical now more than ever
Recruiting partner-level talent is ongoing, but we find succession planning still falls short of what’s required. Recruitment activity often prioritizes short-term needs, but with senior partners and counsel retiring, its crucial for legal employers to consider succession planning. Firms that overlook their future growth needs or talent management strategy are putting themselves in an even more vulnerable position in today’s competitive market.
When hiring, focus should be on hiring lawyers with the potential to become future leaders. Even if a law firm has a succession plan in place, its crucial to reassess the plan on an annual basis. Making regular adjustments to a succession plan ensures that critical knowledge is transferred before key team members leave and that the talent management plan is always in line with business strategy.
Insights for in-house
In-house recruitment stays steady, with legal departments being cautious and reassessing their needs continuously. Through our conversations with clients, there is a proactive effort to manage risks and make strategic investments in legal departments. Looking to cut down on costs, many companies are keeping more work in-house, establishing a strong talent pipeline by hiring lawyers at all levels and providing necessary training.
The reliance of executives on talented and savvy counsel for legal and strategic advice underscores the changing legal landscape, emphasizing the significance of adaptability and strategic planning.
Considerations for Canadian lawyers abroad
Against the backdrop of robust private equity and a thriving technology sector in 2021, the resulting war for legal talent led US firms to reach into the Canadian market and selectively recruit top talent. Our conversations with Canadian lawyers abroad showed interest in returning home for mainly in-house opportunities. However, the decision to return is complex due to the economy and salaries offered by US firms.
Nevertheless, most Canadian lawyers who work abroad eventually return. As always, we stress the importance of adopting a long-term perspective, carefully considering timing, and factoring in considerations for re-entering the Canadian market.
Key considerations: compensation and flexible work
In 2021 and 2022, compensation reached new heights due to the war for legal talent. In 2023, we saw these values return to earth and remain stable. Through our discussions, it’s evident most employers now offer hybrid work options. Without flexibility, companies may need to provide higher compensation, as many lawyers express a preference for a premium if required to work in the office full-time.
Given the complex dynamics of the legal sector and evolving market pressures, making a case for competitive compensation continues. We are proud to announce our renewed partnership with the Canadian Corporate Counsel Association (CCCA) and Bramm Research to conduct this year’s In-House Counsel Compensation & Career Survey.
Click here to participate and be the first to receive a free copy of the report in May 2024. Your participation will contribute to the growth and knowledge of our in-house legal community.
As we navigate what appears to be a slower market, it’s crucial for lawyers and legal employers to be proactive and thoughtful about their trajectories. Successful legal recruitment ultimately demands adaptability and a proactive approach to changing market trends, as well as anticipating future threats and opportunities.
The Counsel Network (a Caldwell Company) is a leading Canadian lawyer recruitment firm and has successfully placed candidates in associate, partner, and in-house counsel positions for over 30 years. If you’re thinking about exploring your options or making your next great hire, contact us for a confidential discussion today.