Observations on the Legal Talent Market: Q1 2024

May 6, 2024

Observations on the Legal Talent Market: Q1 2024

By Logan Ide, Partner at Latitude. Logan founded and leads the company’s Atlanta office.

The legal talent market is a multifaceted, evolving landscape. Latitude is an active player in the market, serving large and small legal departments as well as law firms by providing them with contract attorneys (flexible talent) and attorneys for permanent hire.

With Q1 in the books, we examined our data from Q1 2024 and compared it with the first quarter of 2023 to identify shifts, nuances, and emerging patterns. At a high level, Q1 of 2023 and 2024 appear more similar than different, but a closer examination reveals slight changes in demand for certain practice areas. We also witnessed a significant surge in demand from small to mid-sized law firms.

As we delve deeper into our findings, we see that corporate legal departments and law firms have distinct priorities and requirements driving their talent acquisition strategies, and these demands reflect the multifaced nature of the legal industry. In addition to immediate hiring need trends, we also examine compensation trends and the evolving landscape of remote work opportunities.

Corporate Legal Departments

The largest demand from our legal department clients, constituting roughly 40% of Latitude’s contract attorney orders in Q1 ‘24, continued to be for contract in-house counsel to support commercial contracts. These roles typically require a generalist skillset, though we did frequently see requests for expertise in technology-focused areas such as SaaS, along with general corporate procurement and sales support.

The balance of remaining requests in Q1 was distributed amongst other corporate legal functions, including corporate securities and governance, financial services, healthcare, regulatory, labor & employment, litigation, regulatory, compliance, real estate, environmental and generalist needs.

We observed a reduction in demand for data security and privacy engagements, which has been on a slight downward trend in recent years following the initial surge in activity surrounding the roll-out of GDPR and CCPA and the subsequent partial incorporation of those skills and experience into broader roles.

Additionally, Latitude received niche requests for specialized areas such as ERISA, marketing & advertising law, and construction law. While the majority of our legal department requests were for individual contributor attorneys, there was also a notable demand for interim and fractional general counsel roles, as well as interim deputy general counsel/associate general counsel positions.

Law Firms

Among law firms, we saw a notable uptick in demand for contract litigators – including those at a counsel or partner level. Specifically, the percentage of overall law firm requests that required a contract litigation attorney increased from 25% in Q1 2023 to 35% in Q1 of this year.

As an aside, our law firm clients may request associate-, counsel- or partner-level contract attorneys due to increased work, generally, and/or combined with a need to quickly support practice groups that are understrength due to unexpected departures or attorney leaves. They also request Latitude Attorneys to directly fill secondment requests from clients – or to backfill for a seconded attorney.

Corporate (financing, M&A, securities, etc.), commercial contracts, regulatory, labor & employment, real estate, and IP were also common requests. In fact, Latitude successfully addressed over 15 different practice area needs in Q1 – some of which were very narrow.

Echoing the trend observed in corporate in-house demand, we saw a slight drop in requests for data security and privacy attorneys as independent roles. We had less frequent but still relevant order volume in construction, energy, product counseling, tax, and insurance.

Permanent Placements

Looking at permanent hires across both in-house and law firm clients, we saw general stability in the wake of the “musical chairs” hiring period from 2020 to 2021 that was driven by the Great Resignation paired with aggressive Big Law hiring, including raises and stay bonuses. This trend reached its peak in 2022 and early 2023 before correcting.

The stability we observed in Q1 has one exception, which was a marked increase in requests for litigation attorney hires at many of our law firm clients. Also, while our engagement orders for litigators were distributed among AmLaw firms and boutiques, the bulk of permanent orders was more weighted towards boutique and midsize firms.

These dynamics are consistent with the findings of Thomson Reuters’ 2024 “Report on the State of the U.S. Legal Market,” that shows that litigation experienced the largest year-over-year growth among major practice areas (3.2%), with the majority of this demand growth occurring at midsize firms.

Compensation and Remote Work

From our anecdotal perspective, compensation for both in-house and law firm hires remained relatively stable, aligning with nationally reported trends indicating traditional annual increases.

While fully remote permanent opportunities remained available, a majority of our permanent orders in Q1 (roughly 60%) featured hybrid schedules, with employees spending three days in the office and two working remotely. The remaining roles were split between fully remote and fully in-office. Overall, about 90% of our clients remained open to remote engagements for their interim, supplemental, and fractional engagements, which is consistent with global workforce trends reported by Deloitte.

Engagements continued to average above six months in duration, although some projects were shorter undertakings while others have continued for multiple years. Demand for flexible legal talent continued to be driven by a variety of dynamics, including covering leaves, addressing turnover, navigating full-time hiring restrictions, and addressing work overflow via experienced contract attorneys, whether on a full- or part-time basis.

Looking Ahead

Looking forward, we anticipate that the current trends will persist in the near term. Legal departments are increasingly expected to accomplish more with the same or even fewer resources. As a result, we expect a continued reliance on both full-time and fractional engagements as an important means of addressing sustained needs, particularly when permanent hires are not possible.

On the law firm side, several factors suggest that certain trends will endure. These include ongoing litigation driven by a continuing catch-up from the pandemic, clients shifting legal work to different firms, persistent regulatory challenges, and counter-cyclical drivers. While we see early signs of potential upticks in M&A work and that real estate activity driven by a stabilization in interest rates and/or distressed acquisitions might be emerging later this year, these developments are still taking shape.

The widespread integration of AI tools into legal workflows by both legal departments and law firms seems to still be a ways off and uncertain in its nature.

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