2019 started cautiously, with many legal recruiters expecting to see recruitment levels dip in the lead up to the initial Brexit deadline in April. However, recruitment remained steady regardless of the political uncertainty and we have not noticed any change in recruitment levels subsequently. When comparing activity levels with the same period in 2018, figures are almost identical. Some areas are busier than last year (litigation, funds/FS Reg and construction), others are generally quieter or steady (TMT, DP), but overall market activity in the main transactional areas (banking, finance and supporting areas) is similar.
Conversely, candidate levels are lower than last year and it is increasingly hard to find good lawyers, particularly UK trained and qualified. Our sense is that retention levels are higher than before as firms have made agile and flexible working a reality for lawyers and bonus structures have become more transparent and holistic – rewarding lawyers financially in areas beyond fee earning/hours billed (generated work, client relationship building etc).
When there is an imbalance of new jobs to candidates, demand for/interest in lawyers from firms outside London increases and we have placed a number of lawyers from large nationals into London firms. There is now competition for these lawyers, even within US firms who traditionally recruited predominantly from the City. Similarly, there is an increase in demand for overseas lawyers – especially from Ireland, Australia and New Zealand.
As ever, there is also competition from In-House legal teams. This has historically been mainly within banking, technology and corporate, but is also increasingly DP, regulatory, financial services and real estate related.
We have not experienced any firms recruiting in large numbers within any one particular area; instead demand has remained high across the following sectors/specialisms: banking, corporate, litigation, employment, real estate, construction, funds/FS reg and PSL/KM. Retention is generally better this year amongst most firms, particularly those who have embraced a more agile way of working.
One area of the market that is growing is the Alternative Legal Services market. Axiom, Lawyers on Demand and other freelance offerings add yet more competition, as do alternative law firms such as Keystone Law, particularly at the senior end of the market.
When Bingham McCutcheon announced in 2010 that their new NQ salary level was £100,000, the press coverage was huge and we wondered how it would be matched. Obviously, it has been surpassed over the last 9 years by other US firms and now we have the same headline NQ rates from the Magic and Silver Circle. Whilst many of these firms have incorporated a bonus element in to the £100,000, the figure is still headline grabbing. How other large and mid-sized City firms will react to this remains to be seen in its entirety. We suspect the salary gap between the largest and mid-sized firms will increase, however as the figures filter through we will compile our annual salary survey which will be available in the Autumn.
As a consequence of the candidate shortage, we have also had a few offers of sign on bonuses this year, rarely seen since the heyday of 2006-2008, and bidding wars have started over the most sought after candidates.
gmk legal is a boutique legal recruitment company set up in 1998 and specialising in fee-earner recruitment (NQ to partner level) and related non fee-earning professionals, including PSLs, Training and Development, and Risk Management Lawyers.
If you would like a confidential chat about the London recruitment market call 020 7269 9110 to speak to one of our consultants.