The State of the Legal Market: June 2014
For many the memories of the last boom seem like a distant memory with the recession eclipsing a once prosperous market. Many associates who are coming up to 4 years' PQE this year have everlasting memories of the Lehman Brothers crash which, almost to the day, marks the anniversary that they entered the legal profession as a trainee.
Today many ask under hushed tones whether those green shoots so often mentioned in the years following 2008 have finally arrived. Will they create a stable platform for growth and offer opportunity?
To answer that question, the facts of the case must be considered:
2014 saw the largest increase in permanent vacancies since the pre-recession years. The majority of firms have active vacancies across a wide range of transactional areas with a notable rise in the number of firms who are keen to strengthen their teams in a variety of areas and at a variety of levels. The usual high demand areas indicate real growth, including; real estate, finance, corporate, pensions, financial services litigation and corporate tax.
Recruitment and the retention of talent are once again at the heart of most firms' agendas. This has had a knock on effect with many firms offering generous pay raises and incentives such as performance related bonuses to ensure existing employees stay motivated. Those firms who are looking to recruit are also able to offer guaranteed and/or sign on bonuses and relocation expenses.
Fee earners at all levels, particularly in high demand areas, are working harder than ever with increased pressure on meeting client demands. Partners are actively seeking to recruit talented laterals at senior levels to take advantage of perceived new opportunities for growth and at mid and junior levels, resourcing existing teams with increased workloads is a priority.
Lawyers are receiving multiple offers within a short period of time; likewise teams with strained resources are more likely to offer departing lawyers an increased remuneration to stay with the firm. Firms are keen not to lose employees to the competition in the fight for talent.
It was only a month ago that a Magic Circle firm announced it was embarking on a recruitment campaign in Australia and New Zealand to attract experienced lawyers in busy areas the opportunity to work in the UK. Whilst these law firms are still looking for the top 5% from similar firms who have good post qualification experience, it certainly brings back memories of similar recruitment campaigns from the boom years.
Interestingly, more private practice firms are now able to sponsor Commonwealth candidates given a recent surge of sponsorship licences. For a long time there were few permanent opportunities for such lawyers who had to undertake temporary contracts or document review work if they wished to make a move to the UK. This coupled with a poor exchange rate detracted a number of skilled antipodeans from making a move to the UK, once viewed as a rite of passage for many young antipodeans.
That said, private practice firms are still very strategic in their recruitment plans. Law firms are looking for similar skills, so it is not surprising that good lawyers in busy areas are receiving multiple offers or indeed being bought back by their existing firm. Legal recruitment is still seen as a closed market with skilled lawyers coming from outside established firms with a good level of experience and strong academics finding it difficult to move into larger well known London and US outfits. Whilst there are certainly more opportunities for those wishing to relocate from the regions it is competitive at all levels. Firms are able to move more quickly for the right candidate but are still very selective about those they choose to make offers to.
In general, the legal market appears to be growing positively but it must not be forgotten that there are a number of firms who are still feeling the impact of the recession. There are likely to be more mergers as firms are constantly looking for potential partners that will provide stability and/or a strong platform for growth. While there have been a number of mergers in the recent past it is yet to be seen whether these will prove successful.
So, does the legal market look set to continue to grow? The evidence is positive and certainly indicates a healthier recruitment market driven by confidence from law firms, their partners, associates and also their clients. No one can predict what may be around the corner in this ever changing market, but the trends over the last few months suggest a positive outlook.