New York Legal Market Update

Written By:
Stefano Barbagallo
New York Associate Director
With Labor Day behind us, Summer has officially ended. It's not all bad news however, in terms of the hiring market there is plenty to look forward to. Summer is over - but the hiring bubble isn't.

In my latest LinkedIn newsletter, BigLaw Access, I discussed the welcome uptick in hiring we were experiencing in the legal space. Thankfully, this continued throughout August and signs of life are continuing well into September. Across many industries, the end of Labor Day signals the start of the busiest hiring period of the calendar year in the US.

It serves as a reminder to Associates (or anybody job-hunting for that matter) to have their ducks in a row and commit to a move if they're looking for a change. However, unlike the past few years, we are now in an employer's market and Associates need to be prepared for how to navigate this.

So, what does this mean?

Partners can really have their pick of the market, so you need to put your best foot forward -- but equally it's a competitive market so you need to show that you're well researched on the team and committed to the role / move. We've seen some of the most talented Associates overlooked for roles. In short, this means you not only need to be prepared, but you might need to be available during a holiday or when you're tired and not feeling 100% to fit in with the hiring Partner's schedule for an interview -- no-one is waiting around in this market.

By no means am I advocating for burnout and showing up for the sake of it, but this is a different market than we've seen in the past and you need to impress if you really want the job. In my experience (be it my first job stacking shelves at a grocer, my career as a lawyer and now as a recruiter), showing up is one of the most underrated traits you can have in the workplace. This reliability is often rewarded by firms and employers with trust, flexibility and the best work coming your way.

The rise of the $20 million per year Partner

Without pontificating on the reasons why lawyers should be paid well, it's news to no-one that they are. Over the past 10 years, an increase in private equity work has seen a dramatic rise in Partner compensation for top performing Partners at firms such as Wachtell, Lipton, Rosen & Katz, Kirkland & Ellis and Paul, Weiss, Rifkind, Wharton & Garrison LLP earning up to $10-$15 million per year. This figure is well above the median Partner salary at the leading US firms (around $3 million) and triple what it was 20 years ago. For those that say bankers earn more, it looks as though lawyers really do come out on top given the median earnings of a Managing Director at the top investment banks sits at $1.9 million, which notably hasn't increased since the GFC (according to the Wall Street Journal).

Year-on-year since 2021, we've seen Partner moves skyrocket and it appears it's probably paying off for them. The well-publicized fallout of a private equity team in London has resulted in Paul Weiss reportedly writing a check for $60 million over 3 years for one of the leading private equity lawyers in the world (that's $94 million AUD or $82 million CAD).

Here on US soil, I think deals like this are going to become more common as mergers continue to take place across the market causing fall outs and conflicts between teams and Partners. There has been a lot of movement due to the A&O Shearman merger, including a recent team move in Europe, and in the US we're continuing to see some turbulence due to strategic Partner moves.

It's obvious that we're going to see a lot more firms look to strategic partnerships and mergers to leverage experience and geography for competitive growth, particularly as many US firms rest on their laurels of years gone by. This was further enforced by the re-elected Miguel Zaldivar, CEO of Hogan Lovells, who just this week said a merger wasn't off the table for them.

Something we'll be keeping a very close eye on over the coming months.

What a time to be a lawyer!