Law firms maintain strength in the current climate
While certain specialisms have been badly affected by the credit crunch, it is encouraging to report that law firms are determined not return to the early 90s when mass redundancies and hiring freezes were the name of the day. The recent release of the financials of the UK’s top law firms probably help this mindset: average profit per equity partner (PEP) is still growing and turnover remains more than healthy.
Specialisms still affected by the crunch include debt capital markets and securitisation but the larger firms are able to move resources around in order to avoid redundancies and we are hearing more and more instances of this happening – for example, a structured finance lawyer can diversify into funds or financial services.
We are seeing many clients actively trying to avoid redundancies
Non-contentious construction lawyers are beginning to show concern as workloads are dropping off but there is a greater demand for lawyers with contentious construction experience. Workloads for banking lawyers are also getting busier again thanks to a number of mid-market deals.
It is undeniable that residential property remains a very tough market, and regional firms have been hit particularly hard with a number of redundancies announced in recent months. However on the whole, these announcements are exceptions to the rule. We are seeing many clients actively trying to avoid redundancies, and where this is unavoidable, they are often limited to support staff.
Property locums struggle to find work
Perhaps the real cost lies with the professional property locums – summer has traditionally been a boom time for residential property lawyers covering the holiday season but this year the slowdown in the market has meant that the work is either no longer there or is able to be covered internally. Consequently, property locums have no choice but to diversify into other areas such as wills and probate or family in order to remain in the law. The good news here is that there is an increase in the demand for civil work – personal injury, debt recovery, civil litigation and insolvency is all picking up. Family lawyers are also getting busier, possibly due to the strains of the current climate on relationships.
More firms are telling us that they are formalising flexible benefits schemes
As we move into the second half of the year, what appears to be happening is that employees are becoming more realistic in terms of their expectations, and firms are listening to their employees more. Salaries have risen a small amount only but there is a general acceptance that this is how things will be for the next year or so; likewise, more firms are telling us that they are formalising flexible benefits schemes and introducing flexible working conditions. There is also an upturn in alternative career paths thereby providing many more career options for solicitors.
In terms of recruitment, interestingly, there is a lot of activity at the partner level – specifically partners with a following who represent limited risk in this climate and will drive future plans and growth long after the economy picks up.
We welcome your comments on this article.
Comments are moderated and may not appear immediately.