During the Covid-19 pandemic law firms suffered a severe talent shortage, with the top firms struggling to fill job vacancies because of soaring demand for legal services and rising numbers of lawyers quitting their jobs.
Fierce dealmaking had driven up profits at law firms, which have been among the biggest winners from a burst of mergers and acquisitions in the pandemic, delivering a windfall for firms providing legal advice on the deals.
At the same time, law firms have also experienced higher attrition in the past couple of years, as more lawyers have moved out of their posts for reasons that include a culture of long hours and the risk of burnout.
As firms compete for talent, the salaries of even the most junior lawyers have soared to more than £160,000 at the most profitable firms. However, surging inflation, tougher regulation and war in Ukraine are now weighing on demand for lawyers in the job market.
The uncertain economic environment has led to a slowdown in hiring and pay growth at some firms. Allen & Overy, for example, said it was not raising pay above £107,500 in part because of the more challenging business environment. Linklaters, too, said it won’t be rushing to match the large pay increases of rivals because of the wider economic context.
Even if pay is reaching a limit, there are other forms of compensation that LL.M. graduates can negotiate. The M&A boom has led to lawyers at the world’s top firms reporting rising rates of stress because of soaring workloads, coming on top of pandemic-related anxiety and isolation.
Some Big Law firms are rethinking compensation plans
It is common for associates at elite firms to work exhausting hours for high pay, but with the numbers leaving the profession rising, firms are rethinking compensation plans to reflect changing employee expectations.
Claire Lee, associate director of professional development at Boston University School of Law, says: “There is certainly a greater appreciation for work/life balance issues and flexible work options than there has been in the past. Law school graduates can assess and learn more about a firm’s workplace culture through the interview process as well as from alumni working at the firm.”
Furthermore, LL.M. graduates also value opportunities to further their career — another form of compensation that’s increasingly on offer. “Professional development and mentorship opportunities are also important considerations for law school graduates,” says Lee.
Even as the economy edges closer towards a recession, there is likely to be high demand in other practice areas should a downturn occur, such as insolvency, restructuring and litigation. Bankruptcy, restructuring, employment law and compliance all tend to thrive during times of economic uncertainty.
The job prospects for freshly minted LL.M. graduates are still very bright compared with the earlier stages of the pandemic, when law firms cut costs in an attempt to withstand the impact of coronavirus and reined in recruitment for all but the most essential roles.
“The job market is looking much stronger than it was before, and we are optimistic that this will result in greater opportunities for LL.M. students who are graduating in 2022,” says Lee.
“Highly-qualified LL.M.s with background and experience in the practice areas that are heating up should remain marketable, especially to employers in larger cities, who have substantial practices with overseas investments or clients.”
Job opportunities in healthcare law, tech law, and other areas
Caroline Springer, assistant dean for Georgetown Law’s Office of Graduate Careers, also points to high demand for legal talent in some practice areas that continue to boom.
“We are seeing strong hiring in almost every area our LL.M. students are interested in. Practice areas such as healthcare (both transactional and regulatory) and technology law (including cybersecurity, data privacy, fintech and emerging technologies) are hot areas, in addition to corporate transactional work,” she says.
When it comes to finding a job in a more competitive labor market, networking is always critical, regardless of one’s specific goals.
Students who want to find work need to be proactive and strategic about their job search. “They need to exercise common sense, get deeply engaged, differentiate themselves, and try to identify and develop opportunities where there is a need they can fill. If you can demonstrate that you can add genuine value, you will be an attractive and sought-after candidate.”