Global legal recruiter Marsden has launched offices in New York and Los Angeles to help U.S. law firms meet an ongoing demand for talent despite a significant shift in economic conditions and a cooling of the market compared to 2021.
In addition to talent in the U.S., Marsden said it will help law firms fulfill their needs by recruiting experienced lawyers from overseas—especially from Australia.
David Nicol, who is head of the recruiter’s new Los Angeles office, said some U.S. firms have been successfully recruiting lawyers from Australia and Canada for several years. Now, others want to bring in foreign recruits, too.
“There have been a number of clients who for the last 10 years have been strategically looking at bringing in Australians and Canadians because they know they’re well trained, they have some fantastic law skills and are fantastic lawyers,” Nicol said. “What’s shifted last year and why the demand went through the roof is more and more firms cottoned on to that fact, and saw the good experiences that some firms had with those lawyers.”
Jonathan Walmsley, a Sydney-based principal at Marsden, said that a year ago, top firms were offering huge salaries to lure Australian associates because they needed bodies to help meet the extraordinary workload. But there has been a shift: Now, firms are meeting that demand with new law school graduates and instead are seeking Australian lawyers who have been practicing for five-to-eight years.
These lawyers have to take a “haircut” when they start working in U.S. firms, joining at the three-to-five-year experience level in an acknowledgment that they have come from a different jurisdiction.
And because U.S. lawyers are typically considered for partnership at between eight and 10 years, it gives the existing partners more of a chance to see what the lawyers can do before promoting them or moving them on in the “up or out” partnership model common at U.S. firms, Walmsley said.
“It’s about giving people a fair crack at a real career in the U.S.,” he said.
Even with the haircut, Australian lawyers are still well paid by Australian standards. With bonuses and the favorable exchange rate, they would earn about A$500,000 for joining a U.S. firm, compared with the A$350,000 to A$500,000 they could expect as a first-year partner in Australia.
The ongoing demand for Australian lawyers is having spillover effects in the Australian market.
“Over the last 12 to 18 months, we’ve had a really high volume of Australian top-tier lawyers moved overseas to the U.S. and to London,” said Alex Gotch, founder of Sydney-based recruitment firm Beacon Legal. “And it’s now left the huge gap between supply and demand, because law firms in Australia are still hiring at pretty much record volumes. So it’s really difficult for them to hire enough staff.”
The problem is exacerbated because many lawyers who would have come home from the U.S. or London are staying longer because their overseas experiences were affected by COVID.
At the start of September, the big six Australian law firms were between them looking for 76 new lawyers in Sydney alone, Gotch said.
“It’s a really, really difficult climate to hire in. I think it’s going to be this time next year before we start to ease off a bit.”
Marsden’s Wamsley said Big Law in the U.S. is focused on recruiting out of the best law schools and there is strong demand for lawyers with degrees from the University of Melbourne, which is ranked in the top 10 law schools globally.
Overall, firms are hiring based on specific geographic and practice area needs.
Technology and fintech lawyers are in strong demand, as are those with infrastructure experience.
In its discussions with U.S. clients, Marsden found that nearly all U.S. law firms remain interested in growth at the partner level, although not quite at the same level seen in the past few years. On the associate front, hiring has reverted to specific needs according to individual geographic, practice group and class years.
In addition, many firms want to ensure their teams are correctly leveraged: The majority of firms have ample junior associates but are looking to hire more midlevels, the recruiting firm said.
Marsden also found that demand for lawyers in leveraged finance, syndicated lending and capital markets has cooled significantly. And while M&A and private equity activity have softened for some firms, there remain pockets of strategic hiring. The firm said there has also been a measured uptick in the need for restructuring expertise, and firms are starting to hire again in anticipation of greater activity in Q1 of 2023.
Nicol has relocated from Sydney to head up Marsden’s Los Angeles office. Nick Welsh will move from London to lead the New York office, Marsden said.