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Predictions for the 2021 Legal Market: Insights from BCG Attorney Search
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The Covid-19 pandemic forced companies around the world to adapt to new methods of working. Businesses across industries reimagined new ways of working and migrated to options that they never envisioned. The legal industry was no exception. Seen as one of the most traditional and conservative industries, it learned some critical lessons from this country-wide work-from-home experiment. Remote working, hiring freelancers or part-time employees, and flexible methods of billing were some of the major effects.

As the legal industry has adapted itself to new normal, it is as clear as day that new hiring trends are going to emerge in the market. Recently, BCG Attorney Search, America’s premier legal placement firm, published a comprehensive report covering the 2021 legal market predictions. In this article we look at some of the general trends analyzed in the report.

Legal Market 2020: General Trends

The report rightly suggests that 2020 was the most unique year in the history of the legal market. While analyzing the BCG report, this article first sums up the year 2020 and then looks at the predictions for the year 2021 in Part-2 of this series.

  
What
Where


Hiring Trends Till 2020: What did law firms want?

Considering the past hiring patterns of law firms, here is what legal recruiters believed law firms wanted while recruiting:

  • Attorneys should exactly match the actual exact job opening.
  • Attorneys should come from the best law firms. The size of the law firms also mattered and attorneys from smaller law firms were not preferred.
  • Only graduates from the top-ranked law schools were worth their time or placement.
  • An experience of 2 to 6 years was considered as the sweet spot for making an attorney profitable. Experience of less than one year requires training and more than six years’ experience brings closer to a partnership.
  • Attorneys who come from economically suitable practice areas were preferred. For example, bankruptcy gains importance during a slow economy, real estate gains importance during low-interest-rate environments.
  • Attorneys with only a stable recruitment history and as few as possible job changes were preferred.
  • Only Attorneys who are currently employed were seen as worth the vacancy. Unemployed or attorneys with a career break were not considered as worthwhile.
  • Qualifications of the attorneys gained prominence over their personality.

However, the year 2020 challenged and changed all these preconceived notions and assumptions. As a business practice, legal recruiters follow a ranking system to determine a candidate’s eligibility. They rank candidates on a scale from 1 to 5, with 1 being considered as the least employable and 5 considered as the most employable. The ranking is based on a number of factors including the law school attended, the law firm worked at, practice area, number of career moves, grades, summer associate program at a major law firm, personal skills, and personal background.

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Prior to 2020, over 85% of law firm interviews and placements were only provided to candidates who ranked 4 or 5. However, in 2020, these figures changed dramatically, and large law firms became flexible with their hiring patterns. In 2020, about 40% of interviews went to rank 3 candidates, 18% went to Rank 5 candidates while Rank 2 candidates accounted for 9% of the interviews. Rank 4 candidates only accounted for 4.6% of the interviews. Clearly, there has been a fundamental shift in the hiring patterns, and candidates who were not “marketable” before have become so now.

Legal Market Trends Till 2020 and Key Takeaways

The year 2020 witnessed some unprecedented trends in the legal market. These trends will have a long-lasting impact on the legal market. Some of the key patterns observed are:

Layoffs and hiring

2020 Trends: Recessions lead to lower revenues for large law firms their clients try to limit their expenses including legal costs. Typically, large law firms lay off many employees during a recession and those in an unprofitable practice area are more prone to it. In 2020, large law firms laid off many people. Layoffs at smaller law firms were comparatively lesser. Rather, small and mid-sized law firms accounted for most of the job orders. Hiring was negatively impacted in large law firms.

Takeaway: Hiring at smaller law firms is expected to increase more than ever. The report also suggests that candidates should consider applying to smaller law firms in 2021 as the number of vacancies in smaller law firms will be more than ever in 2021.

Companies moved to smaller law firms

2020 Trends: Even during a recession, companies need to ensure that comply with the law and thus, the demand for legal services does not vanish. Companies move to smaller law firms with lesser rates located in smaller markets to cut down expenses. The same was true for the year 2020. The stunning trend of 2020 was the demand for attorneys in smaller law firms located in smaller markets including Reno, Arkansas, Alabama, West Texas, and rural Wisconsin.

Takeaway: This trend shows that opportunities in smaller markets are going to increase. Candidates may consider applying to smaller markets if they are looking to relocate. Law firms should go after the talent in smaller markets now before local firms lock in candidates they otherwise might not be able to.

Law students, recent graduates, and junior attorneys were the most impacted

2020 Trends: Law firms laid off first-years associates and 2019 and 2020 graduates. Summer programs were also canceled by many law firms. This impacted the training of attorneys who were about to start or at junior levels of their careers.

Takeaway: The report suggests that in 2021, attorneys should carefully join law firms where they believe their careers will be safe. For law firms, the report suggests that cancellation of summer programs should be done after careful thought as they provide future value to law firms when these trained candidates join. Hiring from a lateral pool of candidates in 2021 will be more difficult than hiring trained associates from summer programs.

Impact on different practice areas

2020 Trends: The practice area trends in 2020 were quite different from the general trends observed during previous recessions.

  • Corporate Practice: Corporate did slow down but not as much as expected. During previous recessions, corporate practice had come to a standstill, but not this time. Markets in New York, the Bay Area, Texas stayed vibrant.
  • Real Estate: Real estate activity increased but not necessarily in a positive direction as there were unusual fluctuations due to lots of sudden vacancies, reduced values, and lack of financing options.
  • Litigation: Litigation got significantly busy at smaller law firms and their litigation hiring increased. By contrast, litigation slowed down at bigger law firms and so did their litigation hiring.
  • Bankruptcy: The demand for bankruptcy attorneys was lesser than expected as the practice area did not grow as much as was expected. The demand was bankruptcy clerks was more than bankruptcy attorneys.
  • Labor and Employment: The hiring in this practice area was quite slow pointing to the fact that the practice lacked activity or rather declined.

Takeaway: Candidates have to be careful about the practice area they choose and the amount of work their law firm has in that area. Law firms should let go of attorneys in unprofitable practice areas.

Laid-off employees

2020 Trends: Traditionally, law firms have been averse to hiring currently unemployed attorneys. However, in 2020, law firms were surprisingly open to such candidates and even large law firms took a chance at hiring them. It seems that the negativity attached to being unemployed had reduced.

Takeaway: Law firms should be open to hiring unemployed attorneys, particularly in 2021 because many of these lay-offs might be pandemic-induced. Unemployed candidates should not give up applying to jobs, and should aggressively apply at both small and large law firms.

These were some of the general trends observed in 2020 and the takeaways for the 2021 market. In Part-2 of this series, we cover some specific market predictions for the year 2021.



 

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