The first quarter of 2022 is closing and we’re starting to see long awaited changes in the job market. The talent market in 2021 was an uncontrollable, free-for-all, and recruiters and firms alike are looking toward regaining equilibrium.
Firms ramped up recruitment in response to heightened demand, but as that demand levels off they’re finding themselves in hot water. Since the talent market was so tight, many firms overspent on acquiring new associates and partners to keep up with the workload. Firms are stuck paying those higher rates even as the influx of legal work has slowed.
The hope is always that partners will bring in cases of their own to keep themselves busy and profitable, but with associates, that’s not the expectation. New associates that were brought on during this recent boom in the legal industry are being paid a competitive salary just to get started and learn how to be an attorney. This could put further pressure on new hires that need mentorship and support before they are valuable assets.
Some incoming associates are being paid the same or close to that of junior partners as a result of 2021’s spending spree. This kind of salary compression can create problems maintaining the hierarchy within a firm. Recruiters are preparing for another potential wave of the hiring frenzy stemming from lateral moves and changing firm culture.
For now, firms will likely dial back on the aggressive hiring tactics they’ve been using for the past two years. “We’ve already seen a dip in sign-on bonuses for new attorneys” says Sean Macari of Valiant Search, “and with firms starting to conserve their financial resources, layoffs could be looming.” The projections have turned from talent acquisition to retention for 2022.