It’s been a wild ride since the Coronavirus made history on earth five years ago. Since then, we’ve experienced a wave of ups and downs, twists and turns, mixed signals and awkward contortions as the legal profession has chugged along. Cementing one’s finger on its pulse has proven elusive for many, which has resulted in an anxious frequency that currently permeates the profession. Which leads to the $64,000 question…

What is the state of the legal market today?

To answer this question, I’d like to start with a recap of Christmas Past. Why? Because the context helps provide a big picture understanding of today’s market drivers and trends.

So, let’s begin.

A Walk Down Short-Term Memory Lane

The global pandemic of 2020 shocked and rocked our world. While the economy did not come to a screeching halt, it came pretty darn close. Society was in a state of disbelief, and survival took priority over career…for the time being. As we entered 2021, we experienced one of the greatest economic recoveries in history. Fueled by a scorching hot IPO and SPAC market, the economy went on an 18-month tear. The emerging company market mirrored that of the famous dotcom boom of the late 90s. Companies filling needs during the pandemic emerged as corporate darlings. Public companies gained momentum, and the investment community was buzzing with new bets.

Legal hiring was on fire and companies could not hire lawyers fast enough. The need for help “yesterday” resulted in lower candidate scrutiny – with some employers experiencing major Buyer’s Remorse. Compensation during this period went through the roof, catapulting base salaries, bonuses and stock grants. Titles ballooned as well creating a pool of professionals who boxed well below their weight.

Things were good. Very good. Exceptionally good. But the Chicken Little prophecies espoused by the Wet Blankets would soon come true.

As we approached the end of Q2 2022, converging factors including the war in Ukraine, fast growing inflation, a corpse-like supply chain, ballooned company valuations and missed earnings collectively chopped the thriving economy off at its knees, sending stocks plummeting and freezing the IPO and SPAC queue. The free flow of investor money also significantly tightened, leaving many emerging companies gasping for air.

Legal layoffs began in Q4 of that year and continued at a steady pace deep into 2023. During that time, legal hiring was anemic, existing job openings were downgraded and compensation flattened before starting its slow decline. The rapid demise of Silicon Valley Bank and First Republic Bank sent the financial markets in a tailspin, which added fuel to the fire of an already besieged economy. But as history would demonstrate, the global markets, corporate ecosystem, Wall Street, Main Street and its people are resilient. And the light at the end of the tunnel re-emerged…with a flicker.

Throughout 2024, the legal market has been in recovery mode with slow, but steady improvement. It doesn’t necessarily feel like a recovery though (cue the nodding heads), because the timeline has been littered with micro peaks…and micro troughs. In addition, the return to the office trend has limited the opportunity pool for all candidates – adding to that sluggish sentiment.

So, what is the state of the market and how will it evolve in 2025? Below is a snapshot of where we are today and where we are headed.

Legal Hiring

Emerging Growth Companies

The economic downturn took a serious toll on emerging growth companies of all shapes and sizes. Executives lost their line of sight on liquidity events and boarded up the windows to prepare for a long, harsh winter. Pink slips ensued and legal departments shrunk. The open reqs that remained were down leveled. This included General Counsel roles that were either pulled altogether or downgraded to VP of Legal/Head of Legal/Senior Counsel, and whose responsibilities didn’t necessarily change per se, but title, reporting structure and compensation did.

Today, that liquidity line of sight is back thanks to an improved economy, better bottom lines and the impact of AI. This has translated into increased legal hiring. The primary areas of demand include privacy, commercial/SaaS, corporate, compliance, regulatory and the newly emerging “AI Counsel”. Upleveled General Counsel roles have re-emerged, but the “GC Light” roles continue to pepper the marketplace.

The hiring pace is a saunter, and the quality of opportunities is uneven. Geographically, the coasts are the most active, but there are an increasing number of opportunities nationwide. Industry wise, tech is leading the charge and their non-tech counterparts are picking up steam slowly.

Public Companies

The insatiable hiring frenzy of the post Covid boom resulted in overly stuffed public company legal departments. So come economic downturn and sinking stock values, these companies were the layoff leaders – with some operating on a continuous layoff drip. For a select few, discreet layoffs continue, but the bulk of the bleeding has stopped. Today, companies are leaner and meaner. Stock prices are up from their basement lows and business is resurging. AI has also changed the corporate game.  Public companies are hiring, albeit judiciously. Desired practice areas for hire include privacy, regulatory/compliance, commercial, corporate and AI (with a smattering of litigation roles).

Public company General Counsel hiring has historically been challenging to predict because public company GCs tend to stay in their roles for a good long time unless (generally speaking) one of the following dynamics are in play: (1) They get fired; (2) They retire; (3) The move to a bigger company with a larger legal department; (4) They go to a super-hot startup (in a hot market); and/or (5) The company relocates. So, the activity can change from year to year. There is a constituency of public companies that went public through a SPAC, who have had more activity in GC hiring to upgrade the function or fill vacated roles.

Non-Profits

The nonprofit world is not known for sporting large legal departments. But there has been a noticeable uptick in nonprofit legal hiring. While such roles still constitute a modest fraction of the broader hiring landscape, the trend line is moving up. Family offices and life sciences/biotech are a couple of the segments experiencing increased legal hiring. These positions often carry a strong sense of purpose and mission, making them compelling opportunities—provided a legal professional can make the significantly lower compensation work.

In addition to an improved economy, there are other key factors that have played a significant role in increased legal hiring that require enhanced lip-service:

Artificial Intelligent (AI)

If ever there was a humanity gamechanger, this is it. AI is not a new technology, by the way. It’s been around for almost 75 years with major acceleration in the last 10. It hit the mainstage roughly 12-18 months ago and its mind-blowing capabilities have taken everything in its path by storm. AI will be the catalyst for our next technological revolution. Today, companies are integrating AI into current product offerings, creating new AI products and incubating others. At this moment, scores of new AI companies are being born and will make their public debut in 2025. The emergence of AI has also been a catalyst for increased legal hiring. Companies are retooling and hiring attorneys to deal with the complex legal issues that AI generates. This new type of legal specialist is being dubbed the “AI lawyer”. The profile is still being defined (much like “product counsel” when it first came on to the scene), but its remit will become clearer as hiring for these lawyers increases.

Replacement Hiring

Mass layoffs shifted unattended workloads to the lawyers who were spared. It was a heavy lift, that was…and is not sustainable, with some lawyers assuming the responsibilities of up to three professionals.  This load resulted in increased pressure, resentment, anxiety and mental and physical health issues over time. Those who hit their breaking point cashed in their chits and hit the beach. Others demanded more support from their employers and managers. These events have played a material role in the legal hiring uptick in 2024. The replacement hires have not been at the same function level as those who were laid off. Instead, employers have down leveled these new roles in title, compensation and reporting structure as well as responsibilities, leaving the more sophisticated work with the existing team.

Intense Regulatory Environment

The regulatory environment in recent years has been intense, indeed. And companies have felt the heat. This heightened scrutiny has spurred a surge in domestic and international regulatory and compliance hiring. However, with a more business-friendly U.S. presidential administration poised to take the helm in the new year, the urgency to fortify regulatory and compliance teams will likely ease and hiring in these areas may relax.

Legal Market Trends

Trends come…and they go. Below are a few notables and how they impact the legal market:

Return to Office

Most organizations have migrated to some form of in office requirement. Two to three days a week is the norm with four to five days being exceptions. In practice, employers have demonstrated some informal flexibility with employees, but not a lot. Candidate/Employee resistance to this requirement continues, but the realities of a tighter job market are moving the needle on the willingness to “come in”. When hiring, employers are focusing on local candidates with a mild trend of hiring “regionally” if the talent pool is thin.  The Return to Office is one trend I don’t see going away.  Building a cohesive culture, enhanced creative engagement, stronger connections and reduced attrition are all powerful (and legitimate) reasons the policy will stick.

De-emphasis on DEI

The volume on Diversity, Equity, and Inclusion (DEI) has gotten quieter. Some organizations are scaling back or discontinuing their formal DEI programs altogether. Others maintain it within their broader narrative but no longer prioritize it as a central driver in hiring decisions. There remains a healthy constituency that remain committed to supporting DEI’s mission and objectives. However, in today’s market, the conversation around DEI has shifted, reflecting an evolving tone and approach. The impact on the hiring market will likely mean fewer diverse candidate slates…and hires.

Artificial Intelligence (AI)

As mentioned above, AI is not just a trend…it’s a gamechanger. It has been a major contributor to the current market recovery and the technology will touch virtually everything in our society. Products and services will be enhanced, new companies formed, new areas of law created, and the legal profession disrupted. The technology is advancing at an unfathomable pace and will impact hiring (and our lives) for years to come. Good…and bad.

Regulatory and Compliance

In recent years, the regulatory and compliance frequency in the corporate ecosystem has reached fever pitches. As a result, organizations have actively bulked up on attorneys to ensure strict adherence to rules and regulations. Historically, the compliance function often operated as an independent vertical within organizations, frequently led by non-attorneys. While this structure remains in some organizations, there has been a clear shift toward bringing compliance under Legal’s oversight – and staffing these roles with lawyers for greater alignment and expertise.

Titles

One of the aftereffects of the post-COVID economic surge has been a rise in title inflation. With a firm grip on leverage, many candidates aggressively negotiated for higher titles…and got them. However, with limited time to accumulate substantial experience in these roles before the layoffs and economic challenges, the market is now saturated with lawyers whose titles often outpace their depth of expertise.

As the market has cooled and employers are coming to market with lower level/titled opportunities, some candidates have grappled with the career decision of going back to a title of yesteryear. An increasing number are now assessing the virtues of an opportunity beyond title and accepting roles that are more properly aligned with their experience.

Compensation

Over the last four+ years, compensation for lawyers has yo-yoed. During the post Covid boom, compensation rose at a dizzying pace much to the chagrin of employers.  When the economy hit a brick wall, compensation flattened and stayed that way for roughly eight months. After that time, it declined…and continued decline for 10-12 months. The good news is that the decline was not terribly steep (5%-10% drop on average). As the market improved, so did compensation – and it is back on the rise. We have still not reached 2021 money highs, but we’re close.

Today, employers are posting jobs with slightly lower compensation ranges, but an increasing number are willing to exceed those ranges for a candidate they want badly enough. In addition, candidate counteroffer “asks” are more reasonable and humbly presented, which has been effective in increasing final offer numbers.

Compensation – The Numbers for Top Legal Execs

Below is current market compensation for the following top legal executive levels. As always, there are outliers. For cities outside of the San Francisco Bay Area and New York, lower the figures by 8% -12%. In my upcoming compensation series, I will tackle the other in-house levels. But for now, I will cover the Legal Eagles below.

• • General Counsel/CLO (startups and public companies)
  • VP Legal/” GC Light” (for startups)
  • Director of Legal/Head of Legal (for startups)

Startups

General Counsel/Chief Legal Officer:

• • Series A: $325k – $350k base salary, 0%-20%, .75% – 1% stock
  • Series B: $375k-$425k base salary; 20%- 30% bonus, stock .5 – .6%
  • Series C: $425k – $450k base salary, 30% bonus, stock .5%
  • Series D, E, F+: $450k – $465k base salary, 30%-40% bonus, .45%-.5%
  • Startups close to IPO: $450k – $475k base salary, 30%-50% bonus; Stock: value $7m – $10m

VP Legal (“GC light”): $300k – $350k base salary; 20%-25% bonus, Stock: .07 – .2% or value of $1.2m – $1.8m

Director of Legal or Head of Legal: $250k – $285k base salary, 20% bonus, stock value: $450k – $750k value

Signing bonuses range from $20k – $125k.

A Note on Vesting: The typical vesting schedule is one year cliff, four-year vest with stock vesting quarterly. Some companies have moved to a three-year vesting schedule.

Annual Refresher Grants are offered but not guaranteed. For GCs and CLOs, the amount ranges between 25%-50% of the value of the original grant.

Public Companies

Compensation will be influenced by the size of the company and industry. But here are the general numbers.

• • Small public company – $450k- $475k base salary, 50% target bonus, stock value: $1.8mil – $2.5m (typically RSUs)
  • Mid-sized – $500k – $550k base salary, 60%-70% target bonus, stock value: $4.5m – $7mil (typically RSUs)
  • Large – $650k – $850k base salary, 80%-100% target bonus, stock value: $7m – $15m+ (typically RSUs)

Signing bonuses range from $50k – $200k.

The type of industry will influence these numbers as well.

Private Equity

PE owned companies are somewhat unique in that they have a compensation structure that is heavier on the cash and lower on the stock. Base compensation ranges are tracking with the smaller public companies with a bonus range between 40%-50% (for GCs and CLOs).  Stock has been historically light and continues to be. Candidates will not receive a % of ownership, and the stock value will often mirror the small public company ranges. PE tends to benchmark market compensation with other PE-backed companies, which supports their world view of “overall” market compensation. So, if you are negotiating comp with a PE owned/backed company, the public and emerging growth company benchmarks won’t hold as much weight for the PE executives.

MAANG (Meta, Apple, Amazon, Netflix, Google)

These companies continue to be the market outliers on compensation and do not represent the market norm. So, be mindful: a non-MAANG offer will not command the MAANG numbers. MAANG companies pay between 10%-25% higher on base compensation (depending on level) and are generally at market on target bonus. But it’s their stock that moves their compensation in the stratosphere, throwing off up to several hundred thousand dollars a year (sometimes millions for the senior legal execs) in cash earned from vested RSUs and ongoing refresher grants. So, for those of you seeking to benchmark market compensation with your friends and colleagues at MAANG, keep this in mind and manage your expectations accordingly.

Compensia and Radford Compensation Numbers Are (Still) Too Low for Lawyers.

Yep, still the case. Compensia and Radford do not produce compensation surveys that accurately reflect current market compensation for lawyers. Compensation for lawyers constantly shifts and sometimes those shifts are incredibly nuanced. The type and quality of data also influences accuracy.  To stay current and to know which data is relevant to consider, one must be deeply embedded in the ecosystem continuously. Compensia and Radford are not so their benchmarks are consistently off.

These market compensation misfires create challenges in the corporate world because HR departments rely heavily on these types of compensation consultants/surveys to create and maintain their internal metrics for lawyers. When they don’t align with true market compensation (and they rarely, if ever do), it often sets the stage for a colossal clash between Legal and HR for attracting, landing and retaining the best legal talent.

Crystal Ball

As we say sayonara to 2024 and enter the clean slate of 2025, the market recovery will continue and build momentum throughout the year. The acceleration of that momentum is uncertain at the moment, but we’ll have greater clarity by the close of Q1.

The incoming U.S. political administration is decidedly pro-business so we can expect a less restrictive corporate environment with tax relief and far less regulation, enforcement and scrutiny. This will result in more robust transaction activity including IPOs, M&A and capital markets investment. Consequently, in-house legal departments will expand and there will be a greater number of emerging growth GC/CLO opportunities. AI will continue its market proliferation and will serve as a force for innovation, investment and continued legal hiring. Finally, compensation will remain strong throughout all geographic regions – and will experience a slight increase by Q2…assuming there are no material events to knock it off course.

The legal market has weathered a whirlwind of challenges and transformations since the days of Covid…and we all have weathered them too. As we look ahead to 2025, the stage is set for continued recovery…and brighter days.

And that will make for a very Happy New Year, indeed.