Is the US private equity market rebounding? What does this mean for legal hiring in 2025?

After a tumultuous few years, private equity (PE) regained momentum in 2024, with deal activity rebounding in the US.

Total deal value surged by 19% year-over-year, reaching $839 billion, while deal count rose by 13%, reflecting renewed confidence across various sectors. However, the year wasn’t without its complexities, with a Q4 slowdown hinting at cautious optimism for the future.

Key drivers of this rebound included stabilized inflation, lower interest rates, and tighter credit spreads. The technology sector stood out, with deal value increasing by 21% year-over-year. PE-backed exits also experienced significant growth, increasing by 49% year-over-year to $413 billion, as managers focused on high-quality asset sales to navigate a challenging market. Despite these gains, fundraising lagged, with the year expected to close at approximately $300 billion, down from $395 billion in 2023.

What can we expect in 2025?

Looking ahead to 2025, favorable conditions appear to be emerging. Interest rates are expected to provide a tailwind, regulatory pressures may ease, and a „risk-on“ sentiment is emerging among investors. However, macroeconomic risks persist, with high federal interest payments and potential supply chain disruptions potentially tempering growth.

With over 11,800 PE-backed companies in the US – 35% of which have been held for five years or more—the market is poised for increased deal and exit activity. Understanding the nuances of these evolving trends will be key as this surge unfolds.

What does this mean for in-house legal hiring in the US?

The rebound in private PE activity is likely to have a significant impact on in-house legal hiring. With deal value surging and increased exit activity, PE firms will need to strengthen their legal teams to manage the complexities of high deal volumes and changing regulations.

Here are some key legal recruitment predictions:

• Increased demand for legal talent: the heightened deal flow, especially in sectors like technology, will drive demand for experienced in-house counsel. Legal teams will need to handle due diligence, contract negotiations, and regulatory compliance.
• Focus on specialist skills: with areas like regulatory compliance, data privacy, and technology gaining prominence. Legal departments may look to hire specialists to navigate these complex areas effectively.
• Interim hiring: there may be a rise in interim and fixed-term contracts. This flexible approach allows firms to manage workloads and legal spend efficiently, especially during uncertain economic conditions.
• Investment in legal tech: PE firms will likely increase their investment in legal technology to streamline processes and manage risk. Tools like contract lifecycle management and legal analytics will become more widely adopted.
• Retention and employer brand: competitive compensation and clear career development pathways will be essential to attract and retain top legal talent. Emphasizing workplace culture and opportunities for career progression will also be crucial.

How Taylor Root can help you source in-house legal talent for your PE-backed company

Overall, as PE firms navigate a dynamic market, having robust in-house legal teams that can adapt to evolving trends will be key to their success.

If you are looking to hire legal talent for your company, please don’t hesitate to submit a brief and a member of our team will be in touch. Alternatively, if you are looking for a new opportunity, look at our latest opportunities.