U.S. ‘poaching’ of Canadian associates on the upswing

The call of the south (of the border, that is) is luring more young Canadian lawyers to work for American law firms.

Although foreign firms have long been on the lookout for Canadian talent, that has increased recently, as U.S. law firms are busier than ever and can pay more than twice what Toronto firms pay.

According to a recent article on Business Insider — Young Canadian lawyers are doubling their pay by joining crazy-busy U.S. law firms — about 31 lawyers, mostly with transactional law backgrounds, have moved from Canada to the 200 top U.S. law firms since Jan. 1. This number is more than during all of 2020. By contrast, about twenty-eight lawyers made the same move in 2020, 35 in 2019, and 25 in all of 2018, according to the article that cites research from Firm Prospects, a legal data firm.

Big law firms are increasing salaries, with base salaries for entry-level lawyers at top corporate U.S. law firms reportedly rising from US$190,000 to US$200,000 or higher, and up to US$365,000 for the most senior associates.

In Toronto, by comparison, a first-year lawyer at a large firm can expect to earn about Cdn$100,000 to $110,000, according to ZSA legal recruiting firm. $110,000 is equivalent to about US$89,000. 

There is definitely more foreign recruiting taking place now, says Dal Bhathal, managing partner of the Toronto and Vancouver offices of The Counsel Network, a Canadian legal recruitment firm. The pull is powerful from the United States, she says, where law firm work has expanded during the pandemic.

“We’ve seen this before [in a] hot market or busy market,” says Bhathal. “Either the U.S. and also U.K. firms have come into Canada and gone from coast to coast and cherry-picked top talent at some of the top and larger firms.”

Foreign hiring is cyclical, she adds and varies according to the strength of the economy in the various recruiting countries. The recent hiring uptick from the U.S. law firms, which began in January, has seen more commercial litigators moving as well, she says. In contrast, Canadian hires typically come from corporate securities, capital markets and M&A practices.

Although the higher salaries are certainly a carrot, that’s not all that draws young Canadian lawyers to foreign climes for work, Bhathal stresses.

“The money is good, but at the end of the day, it’s also because they want to experience a different city, a larger centre, and that’s why London, New York, or [the] Asia market,” and even the West Coast are attractive.

“They’re up for a bit of an adventure and to do something differently, and it’s also probably at this [early] point of their career where it’s the easiest time for them to do it, professionally and personally, to get up and go without having those kinds of commitments” that can come later in life.

Young associates will often work abroad for perhaps three years and then come home.

“My experience is that the majority of Canadian lawyers who go abroad to practise will return,” adds Bhathal, who is also a lawyer licensed in England. “Most are going for that adventure, and they find they want to come back because this is where family is, and often the standard of living in those larger centres can’t really compete with Canada.” The high pay of the big foreign law firms also comes at the cost of more work and longer hours.

But young lawyers who further their career in the U.S. and overseas need to be mindful of the employment market when they try to return to Canada, she cautions. As a recruiter, she saw a problematic situation in 2008 when “the market started to crash, and there weren’t opportunities here.

“We had top talent that was looking either to move here or to come back, but firms couldn’t recruit them. The market has bottomed out, and so there just wasn’t the work available.”

Today the demand for lawyers is high in Canada. Canadian firms compete with their higher-paying U.S. counterparts, for example, and see their own “great talent” migrate elsewhere. But associates who answer Uncle Sam’s (or others’) must be mindful that timing a return correctly is critical, especially for more senior lawyers, Bhathal says.

“If you’re looking to return, the timing of that is incredibly important from a career perspective.”