Propelled by record revenue and profits, commercial law firms made 26 per cent more partner hires in 2021 compared to the previous year, according to a new report.
Following vaccine rollouts the economy began to recover from the pandemic outbreak in 2020, leading to a boom in dealmaking which has driven demand for law firms since.
And as business travel remained stationary for most firms, due to unpredictable global travel restrictions, and there were fewer entertainment expenses, law firms found themselves with even more money to spend on new partner hires.
A total of 473 partner moves were announced in 2021, compared with 374 in 2020, according to a report on law firm partner moves by legal recruitment consultancy Edwards Gibson.
The number of partner hires recorded in 2021 is almost 10 per cent above the ten-year-average of 433 partner moves, discounting 2016-2017 when the collapse of KWM European verein, one of the biggest law firms in London, caused a surge of moves. According to the report, the fall resulted in an artificial inflation of the data.
US law firm Kirkland & Ellis hired the most partners in 2021, taking on 15 new partners over the course of the year.
The firm, which is the highest-grossing law firm in the world, also announced in July that it would be giving its qualified solicitors a $25,000 (£18,000) pay increase. The cash comes with strings though, as trainee solicitors at Kirkland & Ellis were found to work the longest hours out of 2,500 lawyers surveyed by Legal Cheek, finishing their day at 11:30pm on average.
Gruelling hours combined with more associates working in isolation from home has taken its own toll on the mental health of lawyers. More than seven out of ten legal workers said their job had a negative impact on their mental health and wellbeing, according to a report published last week by the Legal Sector Workers United (LSWU) which found that their job was cited by almost 60 per cent of those in the legal sector, as the biggest threat to their mental health.
Many firms have responded not by reducing workloads, but by generously hiking up salaries. The competition for junior lawyers led to a bidding war with a whole host of London law firms announcing new increased salaries over recent months.
From next year, newly qualified lawyers at Ropes & Gray will take home £147,000, up 13 per cent from £130,000 while their peers at Reed Smith will receive £107,500 – a boost of 19 per cent.
But law firm salary wars haven’t tended to end well for associates, according to the report by Edwards Gibson. Instead, they have previously “been a portent of a market correction”.
As London braces for tighter restrictions in response to the spread of Omicron variant, the economic impact on businesses, and law firms, in 2022 is yet to be seen.