New annual BigLaw report says that growth is up a bit (4%), client demand is down a tiny bit (1%) and costs are up. If this recession doesn’t end soon, I feel like the insane amount of laterals firms hired over the last 2 years means we’re bound to see more layoffs - right?
Last year growth was apparently 14% and firms were hiring as if that would last forever. Honestly seems wrong and that firm leadership should take responsibility for that.
Here’s a summary of the report: https://lookzy.beehiiv.com/p/2022-12-08
Mentor
You know, one really good way to reduce costs is to get rid of all that office space and let everyone work remotely 😏
Amen
Law firm leadership seems perplexingly illogical for a group of people otherwise so highly educated. I spoke with a lead partner during an interview last month when we discussed the state of the market and the future of the firm. I asked about hiring and implied that there seems to be a return to the norm after a couple of hot years. He just said that the last two years have set the new norm. Short term thinking seems to be the business of the equity partners milking us.
Mentor
If by hiring they meant churn, then yes. Real talk, this "growth" is just raising rates. It's not higher demand just higher revenue.
Mentor
So, good associates were leaving in droves last year due to burnout. Firms had to hire.
We're all just replaceable cogs in the biglaw machine.
And...law firm management never takes responsibility for anything bc they're usually not good managers.
Mentor
It’s going to be firm specific.
Basically, if you’re at a firm who has a headcount in 2022 substantially above where it was in 2019 (Cooley being an extreme example here), layoffs are probably more likely.
Some firms that “hired a lot of laterals” in absolute terms in 2021 actually shrunk in headcount because so many of their associates lateraled to another firm.
Also at Cooley and can confirm this. Low attrition, people generally like it in our office. Only a few departures for exceptionally good in house gigs.
Mentor
Exactly. 100% of firms hired aggressively, but only like 5% actually grew headcount. There was certainly lots of churn amongst firms, but also a massive exodus to in-house that will likely need to reverse
Mentor
With the amount of associates that leave firms, there is always a need.