Private Equity Partners Face Slowdown in Biglaw Lateral Moves Amid Economic Uncertainty

What's Happening?

The legal industry is experiencing a notable trend in lateral moves among Biglaw partners, with private equity partners in New York seeing a significant decline. According to data from recruiting firm Macrae, only nine private equity partner moves occurred in the first half of 2025, marking a decrease of over 50% compared to the previous year. This cautious approach to hiring is attributed to various economic factors, including geopolitical uncertainty, tariffs, and persistent interest rates. Despite an increase in the total value of private equity deals by 28.7% and a modest rise in the number of deals by 8.7%, firms remain circumspect about expanding their ranks. Ryan Belville, a partner at Macrae, highlights the challenges faced by private equity practices, noting that skyrocketing rates and compensation packages necessitate careful consideration of new hires.

Why It's Important?

The slowdown in lateral moves for private equity partners reflects broader economic uncertainties impacting the legal industry. As firms navigate geopolitical tensions and fluctuating interest rates, they are compelled to adopt a cautious hiring strategy. This trend could influence the dynamics of private equity practices, affecting their ability to attract and retain top talent. The emphasis on a strong book of business remains crucial, as firms seek partners who can bring immediate revenue and stability. The cautious approach may also impact the overall competitiveness of the legal market, as firms balance the need for growth with the risks associated with economic volatility.

What's Next?

For private equity partners considering lateral moves, the current environment suggests a need for strategic planning and patience. While the hiring frenzy may have subsided, the demand for partners with robust business portfolios persists. Firms are likely to continue evaluating potential hires with a focus on long-term revenue generation and relationship building. As economic conditions evolve, firms may adjust their hiring strategies to align with market opportunities and challenges. The legal industry will closely monitor geopolitical developments and interest rate trends, which could further influence hiring decisions and partner mobility.