Excessive New Associate Starting Salary Competition
Partner Salaries Reduced for Payment
Emphasis on Hiring Verified Experienced Professionals
The number of newly hired lawyers selected by the top 10 domestic law firms has decreased by 13.9% (41 people) over the past three years. Due to the burden of labor costs caused by excessive competition over starting salaries for new lawyers and the frequent turnover of lawyers, there is a trend of shifting focus from hiring new lawyers to hiring experienced ones. The average age of new lawyers is 28.4 years, the same as last year, and the proportion of 'SKY' law school graduates has slightly decreased.
According to a Legal Times investigation, the total number of new lawyers who started their legal careers at the top 10 law firms this year was 255, down 23 (8.3%) from 278 last year. This decrease is larger than the 18 (6.1%) drop from 2022 to 2023. The number of new lawyers at the top 10 law firms has been declining since 296 in 2022.
This year, by law firm, the hires were △Kim & Chang 54 △Bae, Kim & Lee 42 △Kwangjang 39 △Sejong 38 △Yulchon 31 △HwaWoo 23 △Barun 12 △Jipyong 10 △Daeryook Aju 6, in that order. Law firm Dongin did not hire any new lawyers this year, continuing from last year.
The large law firms' adjustment of new lawyer hiring is largely due to financial burdens. In 2022, as junior lawyers increasingly left for industries such as venture capital (VC), firms like Bae, Kim & Lee, Kwangjang, Yulchon, Sejong, and HwaWoo competitively raised starting salaries to secure talent and avoid the perception of falling behind competitors. Starting salaries, which were in the low 100 million KRW range, quickly rose to 170 million KRW.
Raising starting salaries requires a chain increase in pay by years of experience, but as law firm growth slows, labor costs have become a significant burden. Some firms have resorted to temporarily reducing partner lawyers' salaries just to meet the starting salaries of new lawyers.
An attorney at a large law firm, who requested anonymity, said, “Although the revenue of large law firms is increasing, the overall legal market and economic conditions are not favorable, so we plan to reduce hiring scale for the time being.” He added, “Usually, employment briefings were held by visiting law schools, but this year, since the number of new lawyers being recruited is not large, some firms are replacing these with Zoom sessions to save time and costs for lawyers attending and answering questions.”
Meanwhile, the revenue growth of law firms has slowed. The combined revenue of the top 10 large law firms last year (based on National Tax Service reports) was 3.4639 trillion KRW, a record high, but the growth rate sharply declined. Since 2021, the law firm industry's revenue growth rate had exceeded 10%, but due to the economic downturn, it recorded single-digit growth.
Kwangjang posted the highest revenue (372.38 billion KRW) excluding Kim & Chang but experienced a 1% decline compared to 2022. It is analyzed that the firm's focus on advisory services such as mergers and acquisitions was adversely affected by the downturn in the investment banking (IB) industry. HwaWoo also recorded a low growth rate of 1%. Bae, Kim & Lee grew by 2.5%, and Jipyong by 5.2%.
In this situation, as new lawyers who have been trained with significant time and money continue to leave, law firms' hiring strategies are changing. In particular, many vacancies created by lawyers moving to competing large firms are being filled by junior lawyers from small and medium-sized firms. The emphasis on work-life balance (WLB) in young lawyers' career priorities has increased the popularity of corporate legal teams over large law firms, which are burdened with heavy workloads, further accelerating talent outflow. Kim Guk-yeol (53, Judicial Research and Training Institute class 35), a lawyer at Dongin Law Firm, stated, “Due to the high turnover rate compared to the human and material costs of training new lawyers, Dongin decided last year to hire experienced lawyers on an ongoing basis.”
As lawyer turnover increases, law firms' recruiting is shifting from a strategy of preemptively hiring excellent new lawyers to focusing on recruiting experienced lawyers with expertise in specific practice areas such as construction real estate and capital markets.
Jang Pum (44, class 39), a lawyer at Jipyong Law Firm, explained, “There seems to be a limit to the traditional method of hiring new lawyers and nurturing them into loyal members. Law firms usually hired two years in advance based on team demand, but nowadays, market trends change quickly, and when incidents like major industrial accidents occur, firms hire the necessary personnel as needed.”
The average age of new lawyers this year was 28.4 years, the same as last year. Among them, 191 were in their 20s, accounting for 74.9% of the total, up 2.2 percentage points from 72.7% last year. The overall age range was between 25 and 37 years. The largest group was 28 years old with 57 people (22.4%), followed by 27 and 29 years old with 42 (16.5%) each, 26 years old with 33 (12.9%), and 30 years old with 25 (9.8%).
Among them, 108 (42.4%) were women, down 4 percentage points from last year. The number of women joining large law firms increased annually as follows: △2020: 82 (32.8%) △2021: 85 (36.6%) △2022: 106 (35.8%) △2023: 129 (46.4%). The firm with the most female new hires was Bae, Kim & Lee with 24 (57.1%), followed by Sejong with 19 (50%), Jipyong with 5 (50%), and Daeryook Aju with 3 (50%), all of which had more than half of their new lawyers as women.
The number of new lawyers who joined the top 10 law firms after completing military legal officer or public interest legal officer service was 29 in total. By firm, △Kim & Chang 17 △Sejong and Bae, Kim & Lee 4 each △Yulchon and HwaWoo 2 each hired former legal officers.
Meanwhile, among the new lawyers at the top 10 law firms this year, only three (1.2%) were from regional law schools?one each from Kangwon National University, Kyungpook National University, and Pusan National University. The proportion of SKY law school graduates was 74.9% (191), slightly down from 76.9% (213) last year. Most were from Seoul-area law schools: △Seoul National University 100 (39.2%) △Korea University 48 (18.8%) △Yonsei University 43 (16.9%) △Sungkyunkwan University 21 (8.2%) △Ewha Womans University 10 (3.9%) △Kyung Hee University and Hanyang University 7 (2.7%) △Sogang University and Chung-Ang University 5 (2%).
Regarding undergraduate majors, the largest group of new lawyers majored in business-related fields at 36.1%. Detailed majors were △Business Administration 44 (17.3%) △Economics 48 (18.8%) △Law 14 (5.5%) △Political Science and International Relations 13 (5.1%) △Public Administration 11 (4.3%). Their undergraduate universities were △Seoul National University 115 (60.7%) △Korea University 52 (20.4%) △Yonsei University 36 (14.1%) △Korean National Police University 19 (7.5%) △Foreign universities 7 (2.7%) △Sogang University 6 (2.4%) △Sungkyunkwan University 5 (2%) △Hanyang University 3 (1.2%) △Konkuk University, Kyung Hee University, KAIST, Pohang University of Science and Technology 2 each (0.8%) △Kyungpook National University, Dankook University, Dongguk University, Ewha Womans University 1 each (0.4%).
A professor at a regional law school said, “The school promotes that many students passed the bar exam and prosecutor exam this year, but in reality, students have shifted their employment direction from large law firms to courts and prosecution offices. The reason regional law schools operate bar exam and prosecutor preparation classes is proof that entering large law firms is difficult.”
Reported by Legal Times reporters Lee Soon-gyu, Jo Han-ju, Yoo Ji-in, and trainee reporter Ahn Hyun
※This article is based on content supplied by Law Times.
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