BigLaw Access | May Issue 2024

All I can say is buckle up, folks!

There's many things I love about biglaw and the way that it challenges you and sets you up for success. The other thing I love is how confident it is -- like it's its own entity.

Read any labor and employment report right now and you'll read of a slowdown in the market and unemployment not improving, yet across the globe biglaw stands there, with a positive outlook (and the numbers to back it up). Job boards are full, placement statistics are high and profits and salaries continue to increase.

Since Memorial Day, we've seen the market shift gears again as firms lean into hiring for the fall (yes, interviews are still taking months).

Boom or Bust? M&A Lawyers...

For almost 2 years, we've seen global M&A and private equity activity slow down (falling to the lowest levels in 10 years in 2023) due to high interest rates and economic headwinds. What has kept most associates busy is a steady flow of carveout, spinoff and JV work.

While the economy isn't necessarily improving from a stats perspective, confidence in transactional areas of biglaw is.

We're seeing a repetition of what funds partners' were doing 6 months ago -- better positioning themselves for the uptick in work to come.

?? Tobias Knapp joins Baker McKenzie after his almost 10 year stint at O'Melveny where he lead the M&A and PE practice. Allegedly, the move have been based partly on the fall out between O'Melveny and A&O over their failed merger talks

?? Chelsea Darnell joins Paul, Weiss, Rifkind, Wharton & Garrison LLP from Kirkland & Ellis, continuing the battle for talent between the two firms both here and in London.

?? Daniel Fayock rejoins K&L Gates after spending time as counsel for a fortune 500 company.

?? Mike Ringler and Peter Jones have joined Sullivan & Cromwell LLP in California adding considerable expertise to their tech transactions and M&A practices.

?? Trent Bridges joins Akin Gump Strauss Hauer & Feld LLP in Texas bringing strong projects experience from Sidley Austin LLP and Magellan Midstream Partners.

This movement is only positive for associates who can take advantage of a growing market and increasing competition between firms as they strengthen (or have gaps) due to talent movement.

Changing Comp Structures?

As transactional (i.e. the money making) practices pick up, the market will start to see better sign-on bonuses or comp structures come into play. Davis Polk & Wardwell LLP recently announced an increase to total comp for leading attorneys, which I assume will either be through special bonuses or potentially through a non-equity partnership tier for seniors. I wrote about this change recently and I think we'll continue to see more changes to partnership models over time.

Firms have increasing developed new titles to delay associates from reaching equity partnership (i.e. managing associate, counsel, non-share partners) but the pull of the Kirkland 2-tier partnership model (while not a favorite for everyone) is starting to draw attention of firms who are looking to compete head on with the likes of Kirkland. If it's not Davis Polk, my money is on firms like Paul Hastings and Paul Weiss adopting this model.

Why Funds Lawyers Will Continue To Demand The Most Competitive Packages

Unlike many other practices (read: M&A and PE) which are cyclical and might face supply and demand issues, funds continues in growth mode.

Since 2018, head count growth rates for funds are up across all major centers.

?? NYC: 53%

?? D.C.: 48%

?? Boston: 46%

?? Chicago: 45%

In New York, funds has overtaken the growth rate of general banking & finance, and in D.C., Boston and Chicago it was the highest growth practice area.

Partner headcount growth is also on the up, with a 29% increase across Corporate (made up of Investment Funds [39%] and M&A [28%]).

But what's driving this growth? Well, plenty.

Not least of all, investor interest and participation in the private markets sector, particularly with growth of secondaries. Across private markets, AUM totaled $13.1 trillion in 2023 (growing almost 20% per annum since 2018) and dry powder is sitting in at ~ $3.7 trillion.

Plenty of action ahead folks! Over the next month during Pride Month, I'll be focusing a lot of my informative posts around DEI and pride in biglaw, so I'm looking forward to that.

I hope everyone has some exciting Summer plans ahead. If you haven't already been down to RegularCoffee in Fidi, you're missing out -- go say g'day!

-Stef

Stefano grew up in Australia where he practiced as a top-tier corporate and funds attorney since 2015 before moving to the US to work in Biglaw. He is now a legal recruiter and Associate Director with Sonder Consultants in New York working across all major markets. Connect with him on LinkedIn.