The tides are changing in some of the hottest areas of practice. Is it time to make changes of your own?
As a legal recruitment company, we often receive inquiries from eager young lawyers who want to know which jobs pay the most, are currently the hot area of practice and where they should begin their search.
There are obviously many variables affecting salaries, even in similarly positioned jobs (e.g. location, private practice versus in-house, firm size, client base, billable rates etc.). Additionally, there are always practice areas that are burgeoning, while others are struggling. In fact, in our opinion, the changing tides of legal practice have become even more dramatic over the last five years or so, particularly in the wake of a discordant world economy. Accordingly, those enquiries made by bright-eyed young lawyers are not always easily answered.
We typically advise against making money or following trends a top priority. Rather than focusing on purely financial or “cool” practice parameters, we recommend that lawyers should find legal careers compatible with their own interests and long-term life goals. Historically, we have found practitioners focusing primarily on current market trends or on presently lucrative practices are often the first ones to transition out of legal practice altogether, when the tides change.
associate salaries, for the most part, have remained relatively stable
Since the recession hit, many of the traditionally hot transactional practices of the full service law firms have experienced a slowdown. As major transactions and matters receded, partners held on tightly to what work there was, associates were delegated less work, billable targets became unattainable and future partnership prospects were pushed back or eliminated. Accordingly, the usually solid practice areas of corporate, M&A, securities, banking and so-on either saw little growth or a reduction in numbers. Given the inter-connected nature of such practices, other areas similarly saw a slowing down of workload and collateral collusion. For instance, smaller, but integral practice groups, such as tax, restructuring, etc. felt the pinch of the larger business groups cinching in. Recently, there appears to be a measure of rebound in some of these practices areas, but they are still not at pre-recession levels.
The change in workflow is undoubtedly a result of a change in the economic landscape. What the past five years have also witnessed, however, and which lends itself to the file slowdown, is an increasing level of sophistication and due diligence in the way companies conduct business and enlist legal services.
One of the more noticeable changes has been an increase in matters being dealt with in-house. Beyond that, however, there is also a heightened sense of caution about engaging in activities with any considerable degree of risk. More risk aversion generally seems to have translated into less work for lawyers.
We have, however, witnessed global calls for better risk management, regulatory reforms and internal management. What this has translated to is the creation of new in-house opportunities, especially in corporate compliance.
On an additional positive note, despite the slowdown and changes to the marketplace, many legal professionals continue to do quite well. There may have been reductions in bonuses and a slimming of the ranks, but associate salaries, for the most part, have remained relatively stable.
Other positives have also flowed from the change in the economic landscape. With an increasingly open global economy, there has been significant interest in Canada’s natural resources. Accordingly, practices that impact on that generalized field have also experienced recent growth: energy, oil and gas, mining, environmental, construction, etc. Those natural resources and relatively stable economy have also garnered the attention of international law firms, eager to facilitate and assist that global market. The last year saw several major mergers and rumours abound about which Canadian firm will merge next. The impact of such mergers on the Canadian legal scene remains to be seen, but we can expect teething issues for a number of the firms, as well as new opportunities for practitioners in smaller practices and boutiques.
Practitioners should be reluctant to try to mould themselves into a currently hot practice area. Instead, a more stable long-term path would be to focus on the practice that most speaks to who you are. With an ever-changing economy and the subsequent impact on the way our clients do business, a practitioner may have to think of new ways to maintain a client base and workload throughout their career. This does not mean, however, that you need to change who you are, you just need to find a way to adapt to those changes.
About the Authors
Trevor Branion and Chris Williams are the principals of Branion Williams Recruiting in Toronto.