American Lawyer: Macrae Data Reveals 20% Increase in Partner Hiring in 2024

“It shows optimism about what’s to come. I don’t believe that the hiring is reflective of deal activity. I think it’s law firms being more opportunistic that their corporate departments will become busier."

- Macrae Partner Jon Truster

We track and analyze partner hiring across our markets in real-time, or as close to it as possible - and what the January and February data revealed was certainly newsworthy.

As The American Lawyer reported, “In the first two months of 2024, lateral partner hiring in the Am Law 50 has already surpassed the same periods in 2022 and 2023, especially in corporate practices, where firms are seeking to get ahead of a return in transactional activity. That’s according to a report by international legal search firm Macrae, which compiled data on lateral partner hires by Am Law 50 firms in January and February in New York, the Bay Area, Washington, D.C., and London based.”

Here, some key excerpts from the article, which included insight from Macrae partner Jon Truster in New York and Managing Director Sarah Morris in the San Francisco Bay Area:

Corporate partner hires led the increase with 29 of the 128 hires recorded, more than the 10 of 107 in the first two months of last year…New York led the resurgence of corporate partner hires, as 14 such hires in the market outpaced the five and four that took place during the first two months of 2023 and 2022, respectively.

“It shows optimism about what’s to come,” New York recruiter Jon Truster, a partner at Macrae, said. “I don’t believe that the hiring is reflective of deal activity. I think it’s law firms being more opportunistic that their corporate departments will become busier, even if right now they are relatively slow.”

The rise in partner moves may also reflect firms’ “hard decisions” in unequal partner compensation, Truster said. There is a new high point for equity partner compensation at top firms, which Truster said has been subsidized by other members of the partnerships.

“Some people who are homegrown or have been at a firm for a long time can be feeling frustrated at their own firm,” he said.

“It’s been a slower lateral market in the last two years and now that there’s an uptick, people are looking for an opportunity to upgrade their practices at a firm they perceive as having a stronger practice or has more resources available to them,” he continued. “If somebody is an M&A lawyer and their firm doesn’t have much tax or antitrust, they’ll look for a firm that has better ancillary practices for them and their practice.”

The increase in lateral partner hiring extended to litigation departments, where nine partners were hired by New York’s Am Law 50, two more than the seven this time last year.

Truster said signs of this uptick were evident last year, when Macrae began receiving the highest number of requests for litigation partners in years in anticipation of disputes over distressed deals and assets.

“About a year ago was when we started to see more inquiries from firms to expand their litigation departments because they were getting matters from corporate departments and they wanted to hold on to those litigation matters,” he said.

Washington, D.C., firms have also seen a pickup in the pace of partner hiring so far this year, with 34 partner hires marking an increase over 2023’s 27.

…

Bay Area firms have also seen a pickup in early year partner hiring, from five to 12, according to the data. The greatest share of the hires were in corporate practices, albeit fewer than in other regions.

Palo Alto-based recruiter Sarah Morris, a managing director with Macrae, noted the contrast between the low levels of hiring in the Bay Area today versus two and three years ago as a result of the slowdown in early stage financing and startups.

“We’ve seen less of that work and it being harder to close those deals, so as a result we’re seeing less movement there,” Morris said.

Morris noted a “mismatch” between lateral candidates expecting a premium to move despite bringing a weaker book than in 2022. Yet, Morris said several companies are on the verge of going public, leading to a “great need to hire capital markets partners.”

“A lot of private equity partners say they’re going to have a strong 2024 even if their practice was down at least 30% in 2023,” Morris said.

We encourage you to read the article in full here: Anticipating Transactional Rebound, Am Law 50 Steps Up Partner Hiring in Early 2024.