I'll add onto that
- Legal recruitment, of course NQ salaries have skyrocketed in the last 10 years, but particularly those in PE are becoming extremely expensive. As an example Neel Sachdev, a PE partner, was lured from K&E to Paul Weiss for a reported 20 million a year. In terms of pay, this is a battle that US firms are winning and will win easily, UK firms can't compete, so they have to look for other ways to attract the top talent as relative to the below point, the more talented a lawyer = more efficient time spent on matters = more profit.
- At the same time as salaries going up, clients are becoming ever more demanding on reducing costs, through software such as persuit, or by demanding alternative fee arrangements rather than traditional hourly billing. This has meant that many firms, mainly MC and US are pricing themselves out of a lot of work as it is no longer worth their time/reputation to do such work, therefore limiting themselves on the size/type of work that they do and meaning a lot of firms are fighting over an ever more exclusive amount of work.