As the third-largest legal market in the United States, Chicago is the economic and cultural hub of the Midwest region. Home to 16 Fortune 500 companies, the “Windy City” features a robust economy fueled by sectors that include technology, transportation, financial services, and manufacturing.
As one of the biggest legal markets in the nation, Chicago-based law firms and in-house corporate legal departments have historically had the inside track on rising talent. But within the past decade, many East and West Coast-based firms have established satellite offices here.
In addition to heightened competition, this trend has driven billable hour requirements and practice expectations to previously unseen levels outside cities like New York City, Washington, DC, and Los Angeles.
Where the Legal Market Currently Stands
According to a report from the Center on Ethics and the Legal Profession at Georgetown University Law Center and The Thomson Reuters Institute, the COVID-19 Pandemic of 2020-21 significantly impacted the legal industry, leading to various changes in how legal employers, including those in Chicago, manage their operations, deliver legal services, and treat their employees.
During the pandemic, many law firms recognized the importance of work-life balance, employee health and wellness, and staff training. The shift to remote work proved to be less disruptive than initially anticipated, as technology budgets expanded to accommodate the increased reliance on virtual communication and collaboration tools.
Over the past two years, several mid-to-large-sized firms in the Chicagoland area experienced reductions in partner draws, fee earner salaries, and support staff compensation. However, as the legal market continues to recover and adapt, there are indications that the industry is rebounding, with a renewed focus on talent retention and long-term growth strategies. Chicago’s legal market remains robust and competitive, with firms adjusting their practices to thrive in the evolving landscape.
What We’re Expecting in 2023
What about the Chicago legal market in 2023? Whether it’s navigating an economic recession or global pandemic, lawyers tend to be a very resilient bunch. Change is the only constant in the legal field.
During the upcoming year, expect these trends to reshape Chicago’s legal landscape:
Increasing demand for specialized legal services
The pandemic has led to a growing demand for specialized legal services in areas such as healthcare, labor and employment, bankruptcy, and cybersecurity. Law firms in Chicago have been expanding their expertise in these sectors to cater to the changing needs of clients.
Emphasis on diversity and inclusion
Law firms in the Chicagoland area are increasingly focusing on promoting diversity and inclusion within their organizations. This has led to the implementation of various initiatives and policies aimed at recruiting and retaining diverse talent, as well as fostering a more inclusive work environment.
Adoption of alternative fee arrangements
The economic uncertainty created by the pandemic has prompted clients to seek more cost-effective and predictable legal services. In response, Chicago law firms have been exploring alternative fee arrangements, such as fixed fees, contingency fees, and blended rates, to offer clients more flexibility and transparency in billing.
Growing importance of legal technology
The shift to remote work has accelerated the adoption of legal technology in the Chicago legal market. Firms are investing in advanced software solutions for document management, e-discovery, contract analysis, and case management to enhance efficiency and client service.
Baby Boomer Impact
Baby boomers remain one of the largest of all generations. As they continue to retire in large numbers, this growing client base will impact the legal field by creating new practice opportunities in specialty areas focused on retirement.
The retirement of Baby Boomers within the legal market is also leading to leadership transitions, talent gaps, and a shift in client demands. As experienced attorneys retire, law firms must reassess their succession planning strategies, identify the next generation of leaders, and compete to attract top talent. Furthermore, law firms are adapting to changing client needs as wealth passes on to younger generations, which may require offering services tailored to their specific concerns.
Legal Process Outsourcing
In 2023, the Chicago legal market is experiencing a growing trend towards legal process outsourcing (LPO) as law firms continue to search for ways to improve efficiency and reduce operational costs. LPO has emerged as a significant cost-saving measure, offering a viable alternative to allocating dedicated internal resources for specific legal services. By transferring discrete legal tasks to local lawyers, external companies, or paraprofessionals, Chicago law firms can better manage their workloads, reduce overheads, and maintain a competitive edge in an increasingly demanding industry. The LPO trend also provides opportunities for legal professionals in Chicago to specialize in niche areas, while clients benefit from access to a diverse range of legal expertise and cost-effective solutions.
Limits on Billable Hours
In 2023, the Chicago legal market is witnessing a shift in the traditional approach to billable hours, as concerns around work/life balance come to the forefront. Historically, lawyers have been expected to bill at least 1950 hours per year to secure top salaries, which often led to burnout and negatively impacted their personal lives. As a response, there is a growing movement to legally limit the number of billable hours an associate must log in a year.
This potential change could significantly impact the lives of associates at some of Chicago’s leading law firms, as well as the overall legal industry. By placing limits on billable hours, law firms would need to reevaluate their compensation structures, performance expectations, and resource allocations to maintain profitability while supporting a healthier work environment for their employees.
As the Chicago legal market adapts to these changes, we can expect to see increased emphasis on efficiency, innovation, and alternative billing models that prioritize value over sheer volume of hours. This shift could lead to a more sustainable and balanced legal profession in Chicago, attracting and retaining top talent in the long run.
Mergers & Acquisitions (M&A)
The competitive nature of the legal market has led to an increase in mergers and acquisitions, with Chicago law firms looking to expand their practice areas and geographical reach. These strategic moves can help firms strengthen their position in the market and access new clients and resources.
“In 2021 we witness a ferocious snapback to the bloodletting of 2020. Hiring was strong in every month and many candidates had multiple competing offers from which to choose. We enter 2022 with a healthy backlog and job opportunities across the board in corporate and litigation with firms ranging from large to small. With are hopeful with the current blinking green economic indicators and lack of immediate exogenous concerns, that these trends will continue throughout the year. While the holidays and year-end are typically times of self-assessment and goal setting, 2022 presents a unique opportunity to act, and with proper guidance find an ideal long-term platform.”
– Rob McAndrew, Atticus Recruiting
Bankruptcy and L&E Booming from Recession and Inflation
The Chicago legal market in 2023 has been shaped significantly by economic conditions, with two practice areas, in particular, seeing a marked increase in demand: Bankruptcy and Labor & Employment (L&E).
The economic downturn and inflation have led to a surge in bankruptcies among businesses. Many companies, particularly those in volatile sectors, have struggled to recover from the financial strain of the past few years, leading to a rise in bankruptcy filings. As a result, bankruptcy law has become a booming field in Chicago’s legal market. Legal professionals specializing in this area are being sought after to provide advice and guidance to businesses navigating the complex bankruptcy process.
Simultaneously, the recession and inflation have also led to a boom in L&E law. Businesses are grappling with the challenges of complying with evolving employment regulations, addressing wage disputes, and ensuring workplace safety in an increasingly uncertain economic landscape. The rising inflation rates have further complicated wage negotiations, as employees seek wage increases to keep up with the cost of living. This has led to an uptick in labor and employment cases, making L&E law a dynamic and burgeoning sector in Chicago’s legal market in 2023. Law firms are actively expanding their L&E practices to cater to this growing demand, reshaping the legal landscape in the city.
Healthcare, IP, and Cyber/Data Security Continue to Grow
The Chicago legal market in 2023 is witnessing strong growth in Healthcare, Intellectual Property (IP), and Cyber/Data Security sectors.
Healthcare law is in high demand, driven by the pandemic’s lasting effects and the complexities of the healthcare regulatory environment. Legal professionals in this field are increasingly sought after by healthcare providers, insurers, and pharmaceutical companies to navigate intricate legal landscapes.
Intellectual Property law is also growing, fueled by Chicago’s thriving tech sector. The rise of remote work and digital platforms has amplified the importance of securing intellectual property rights, making IP law a burgeoning area in the city’s legal market.
Lastly, the Cyber/Data Security sector is expanding significantly. With remote work and increased reliance on digital platforms, there is a corresponding rise in cyber threats and data breaches. This has led to increased demand for legal experts in cyber and data security, as companies seek to ensure compliance with data protection regulations and safeguard their digital assets. This focus on privacy and data security has made this law area one of the fastest-growing sectors in the Chicago legal market.
Volatile Economy Brings Steady Employment, but not Growth
The volatile economy in 2023 has maintained steady employment in the Chicago legal market but has not spurred significant growth. Uncertainty has kept the demand for legal professionals consistent, especially in areas like bankruptcy, mergers and acquisitions, and labor law. However, this unpredictability has also made law firms and legal departments cautious about extensive hiring or large-scale expansions. Consequently, while there’s a steady need for legal services, the focus has been more on stability and resilience rather than aggressive growth in the face of economic volatility.
Expect to See More Satellite Offices and Mid-Sized Firms Hiring
The trend towards establishing more satellite offices is becoming prominent. As law firms look to expand their reach without the substantial costs associated with opening full-scale offices, these smaller, more flexible spaces offer a strategic advantage. They provide the firm with a physical presence in key areas, facilitating stronger relationships with local clients and tapping into new talent pools.
Alongside this, mid-sized firms in Chicago are also seeing an uptick in hiring. These firms offer a unique blend of challenging work, more manageable billable hours requirements, and often a stronger sense of work-life balance compared to larger firms. With their less hierarchical structures and closer-knit teams, mid-sized firms are increasingly becoming attractive employers within the Chicago legal market. This trend is expected to continue as these firms navigate the changing legal landscape while maintaining a strong commitment to their teams and clients.
Recruiting Outlook and Emerging Hiring Trends
In the face of the dynamic legal landscape, the Chicago legal market’s historical resilience is projected to maintain its momentum into 2023. The hiring trends for the coming year are set to further embrace digital recruitment strategies, as law firms and recruitment agencies capitalize on the power of technology to attract and engage top talent.
Deep Footprint, the driving force behind the Legal Recruiter Directory, is at the forefront of these trends. Specializing in digital marketing solutions tailored to the unique needs of legal recruiters, law firms, and legal placement firms, Deep Footprint is dedicated to delivering results that drive client engagement and conversion rates.
Our expertise lies in connecting talented legal professionals – whether they are actively seeking new opportunities or passively considering their options – with prestigious law firms and corporations. The Legal Recruiter Directory’s online platform streamlines this process, fostering successful placements that benefit all parties involved.
As we move into 2023, our commitment to leveraging emerging digital recruiting technologies will continue to set us apart. With the legal market in Chicago and beyond expected to continue growing, The Legal Recruiter Directory is prepared to meet the changing demands and help our clients navigate the evolving recruitment landscape.