The legal recruitment market is set for another active 12 months in 2019, as mergers, Brexit, diversity demands and the ever-present threat from US firms continue to shake up the established order. In this article, City headhunters discuss some of the key trends set to drive lateral movement during the coming year.

Vassos Georgiadis, managing director, Melton Legal Search

"We expect many US firms to continue making impactful hires in 2019 and further eroding the market share of the magic circle and other top UK-headquartered firms – in London, Germany and throughout Europe, the lateral traffic will continue to be largely one way. Magic circle firms can tinker with their compensation systems even more, but it will still make it difficult to retain star laterals – although it may well delay certain departures.

"Private equity and corporate, leveraged finance, regulatory – both contentious and non-contentious – and white collar will continue to be in very high demand. Any Brexit shocks will likely lead to market dislocation, thereby presenting lateral or team opportunities to nimble acquiring firms."

Aija Maddocks, senior consultant, Fox Rodney Search

"The increased public narrative around issues of gender diversity has encouraged female associates to speak up and advocate for change within their firms, to a much greater extent than we have seen before. The response has been a tale of two halves, and many firms have been receptive, investing more heavily in their women's networks and launching initiatives.

"However, there is still a distinct sense of apathy among far too many firms. This is already having, and will continue to have an effect, on their abilities to attract and retain top talent. Indifference is no longer an option and those who are indifferent to change will see themselves struggle in 2019."

Tom Moore, senior consultant, Melton Legal Search

"London is arguably the most competitive legal market for talent and where the contest between the global elite increasingly looks as though it will be won or lost. This is forcing US firms with smaller London offices to make further investments so as not to be left behind by more global US rivals – and forcing the magic circle to alter their entire business model in an attempt to win and keep the best talent.

"The magic circle have still not succeeded in this and structural changes have been too small to keep pace with the rapid change in the market. US firms that have already conquered London are now a risk-free move for star partners and their clients – as many US firms already provide better global platforms and, in some instances, London offices."

Dan Wilkins, managing director, Deacon Search

"There is much more of a squeeze in the mid-market – there are too many firms and lawyers offering the same services and this is why we're seeing consolidation. There is competition coming from the alternative service providers, including from the Big Four. Particularly in London, mid-market firms are being squeezed by regional firms.  You don't need to go to a London firm which charges £500 per hour when you can do it out of Birmingham or Manchester.

"To combat this, we might see firms becoming more specialised, or throwing their lot in and merging with another firm to go for size. Alternatively, they may go public – the current IPO trend is likely to continue into 2019."

Tim Skipper, director, Totum Partners

"There will be a continued focus on things like diversity and creating a more agile working environment. I've always been of the view that a lot of that innovation goes on in the smaller firms, because it's easier to do it in a smaller environment.

"I imagine there'll be more firms getting private equity backing, more firms listing, and more consolidation in the Gordon Dadds mould – the coming together of distressed law firms."

Ewan Jowers, co-founder, Jowers Vargas

The sense I get from global management of US law firms is more of a willingness to invest in Asia now than in several years, especially in Southeast Asia debt capital markets, private equity, M&A and arbitration. We have been retained for more partner searches than usual, particularly in Hong Kong and Singapore.

There will be a slowdown in associate lateral hiring in Asia during the first quarter of 2019.

A US-China trade deal happens in 2019, resulting in a boom in both countries' markets. Further, improved US-China relations will bring back the China-US outbound acquisitions we have been missing for a few years, especially in the tech space.

Interestingly, If the Hong Kong Law Society follows through on its ill-advised plan to increase the required ratio of Hong Kong-qualified attorneys in foreign law firm offices, some US and UK firms may make preliminary inquiries into Shenzhen office space.