Manchester Legal Recruitment Market Overview June/July 2017
Manchester Legal Recruitment Market Overview June/July 2017 – Private Practice
As a dynamic legal centre, Manchester’s landscape has altered significantly in recent years and continues to operate in a state flux. This is largely driven by new entrants to the local market (including accountancy practices), allied to the prospect of mergers and consolidation amongst mid market firms and also fragmentation driven by the success of recent legal start-ups in the city. This heady mix makes the city’s legal recruitment market one of the most complex and competitive in the country.
Below we will look at what this environment means for candidates and also for talent acquisition and retention in the city. We will look at all levels of candidates focusing on motivations and movement that we have seen and use this information offer analysis and predictions for the coming year. We will focus primarily on commercial legal recruitment which is where we have the bulk of our knowledge and expertise.
There is always a significant degree of change at this level and this has been exacerbated by many new entrants, such as Latham & Watkins, BLP and Freshfields who have focused on this area. A continuing challenge for employers remains creating viable career paths for candidates at this level who (more often than not) aspire to training contracts, an aspiration which is often not compatible with current business models.
Other than salary, and we have seen salaries increase markedly post new entrants, firms have tried with varying degrees of success to engage paralegals with different career paths which offer rewarding and varied careers outside of the traditional route. Addleshaw’s transactional services team remains the largest team of paralegals in the city but all firms have looked to grow in this area in response to continuing demands to limit costs.
The busiest transactional discipline remains real estate and competition for talent with proper transactional experience remains high. This trend looks set to continue over the coming year.
We still see trainee numbers in Manchester as low by recent historical standards. Back in 2008 the largest firms in the city regularly had trainee numbers in the high teens or early twenties. These have largely declined post global recession and now even the largest law firms in the city may only have four or five qualifying.
What has this done to the NQ market? Well a relative dearth of candidates has seen firms seek to acquire talent from further afield and has also required them to be a little flexible in terms of the skills and experience they seek at NQ level.
From a candidate perspective, this gives lawyers who always aspired to working in a large commercial firms a better chance of achieving this than was probably the case beforehand. Despite this flexibility, however, law firms remain focused on using academic aptitude as a strong predicative indicator for the ability to move at this level. They also seek to establish an individual’s drive, motivation and prowess for soft skills before hiring. So while the opportunities may still be there in many ways the assessment process is as rigorous as ever.
Perhaps the rise of paralegal teams completing transactional work in Manchester means that fewer junior solicitors are required? While there is some evidence for this it is difficult to justify not making NQ additions when junior and mid-level associates are in such demand.
Real estate remains the busiest area in this field. Though the need for junior corporate and banking lawyers is also high.
Junior Associates/Mid-level Associates
From 2 years plus PQE as a transactional lawyer in Manchester there are range of career options available to you and the dynamics in different areas of the law are contributing to specific talent shortages.
If you like, the macro factors in Manchester are; new market entrants (including law firms and accountancy practices) all seeking to hire the same people; A lack of talent creation at this level, particularly 2010-2015; changes in the way work is delivered meaning more resource with post qualification experience is required to deliver technically demanding transactions, while managing paralegal workflow; and the growth in in-house legal teams, taking talent away from private practice.
Alongside this there are more nuanced and specific factors which play more strongly in certain disciplines. For instance, the dearth of corporate talent is greatly affected by the rise of accountancy teams seeking to compete with tier one corporate law firms.
In real estate, there has been impressive growth in regional firms like Brabners, JMW and Kuits which has meant such firms now have substantially larger teams than would have been the case five years ago.
On the commercial contracts side, there is a huge amount of interest in-house jobs which has dramatically reduced the size of some large private practice teams.
We have also seen the growth of niche areas of law such as data protection, HSE & regulatory law and specific niche areas of finance and probate litigation. The growth of new niche teams has further put pressure on an already stretched talent base.
What has been the effect of this? Largely it’s been wage growth. In 2013 the top of market rate for NQ Solicitors in Manchester was £38,000. This year it will be £42,000. That is roughly a 10 percent increase in 4 years. This level of increase is even greater at more senior levels within teams – a 2 year PQE could expect £41,000 at the top end in 2013 and this is probably nearer £46,000 now.
Interestingly, probably unlike its predecessors this generation of lawyers are driven less by money and often more by flexibility of working from home, work/life balance and altruistic policies a law firm may have. Anecdotally fewer of them than ever seem motivated by the prospects of Partnership in the future which is a huge change at this level from what we would have expected 10 years ago.
A lot of what has been said above applies to this demographic within law firms. There is a shortage of a knowledge and skills base, again largely as a result of the recession and the number (then) junior associates that left the profession either through redundancy or for other reasons. There is also pressure at this level from increased competition in the city.
What is slightly unique to this sub group, is that they remain highly motivated by career progression prospects, as a general rule. They will often move to smaller law firms for similar money in order to achieve Partnership. They are likely to have spent a significant number of years at this level and be overall more committed to remaining in practice to achieve their career ambitions.
They are often hungry, prepared to grow business and develop clients while doing the work. Some firms remain averse to promoting Senior Associates directly into partnership positions but that remains the key driver for this group.
Partner Level Lateral Hires
This is a huge part of the Manchester Legal Recruitment market in practice in 2017. New entrants, in general, want totemic senior hires to herald their arrival in the city and bolster a ‘feel good’ PR campaign. Senior laterals also help deliver critical mass for new teams as they invariably help drive more junior level recruitment.
The sheer volume of new or growing entrants in Manchester has created a significant market at this level for Partners seeking pastures new.
What motivates senior lateral hires? There are a range of factors including; autonomy and chances to head up practice areas; equity/remuneration; synergy of prospective firm with following/clients; personalities; prospective firm reputation and financial position; desire for a new challenge; or even underperformance in current role precipitating the need for a change.
Most likely it’s a combination of these factors and given the level of investment required to hire someone at this level its worth investigating these motivations in plenty of detail to check that there are real synergies that exist there for both sides on such deals.
Given the high stakes involved and the shortage of Partners with followings in areas such as corporate, real estate, litigation and banking in Manchester, it can be equally as valuable to look at senior associates with the right behaviours, experience and business case who are willing and able take the step up. We forecast that opportunities for senior candidates at all levels in commercial firms in Manchester (including accountancy practices) will continue to grow over the next 12 months.
Recruitment/Retention techniques in a changing landscape
While it has been a turbulent few years for the legal community in Manchester, many of the challenges around recruitment and retention have remained pretty constant. We would summarise these as the following:
- Branding and market awareness – how are you engaging with the legal market in Manchester and how can this help you attract top legal talent?
- Do you have trusted advisors who you rely on for market information as well as promoting your brand?
- How effectively can you manage a recruitment process? Think in terms of engaging all key stakeholders while still designing an effective and relatively quick hiring strategy.
- How do you engage with other fee earners? What are their priorities and ambitions and can you help fulfil these?
- Do you have bespoke systems in place to engage with fee earners across different disciplines and at different career stages? Are you aware of the different factors that might be affecting their engagement and retention?
- Do you have distinct, worthwhile and achievable career paths available for all fee earners?
- Can your current staff be used as effective recruitment tools for your business in the wider market?
- What approach do you have to flexible and agile working? Are people able to work from from home easily and effectively?
- What is your competition doing to attract and retain talent? Is there anything you can learn from this approach?
Where we can assist
We work with commercial law firms of various sizes across Greater Manchester. We give candid advice on recruitment strategies based on a deep knowledge and understanding of the local legal market. We have an excellent base of clients, candidates and contacts within the industry and use this to provide a comprehensive, in depth service to candidates and clients alike