Growing demand for talent
Catherine Henry discusses the latest trends and developments in Yorkshire and the North East's private client market
Providing advice which will help to preserve, build, and maintain wealth and establish trusts is no mean feat. '¨The range of advice that private client lawyers provide is often complex. Acting for high net worth individuals, the work can range from '¨wills and testamentary issues to advising on complex business holdings and assets in many jurisdictions. In an industry where it is common for firms to publicise high-profile deals, private client lawyers often remain the unsung heroes of the legal world.
As a region, Yorkshire and the North East has boasted a strong and buoyant personal legal services market with home-grown entrepreneurs, landowners, and high net worths keeping private client lawyers across the region extremely busy. Numerous multi-millionaires operating in a diverse range of sectors were among the new entrants to feature in the 2016 Yorkshire Business Insider Rich List where the wealth of the Top 100 individuals exceeded £50m and the top five were billionaires.
Brexit safe haven?
Private client law is considered fairly recession-proof thanks to two certainties: death and taxes. But – of course – the state of the wider economy directly impacts the sector. Since the UK voted to leave the EU, the impact on individuals has been much debated. The reality is that most people will not see any immediate change to their personal circumstances as EU regulations have had little influence on the law governing inheritance, probate, Court of Protection matters, divorce, and conveyancing. There’s no doubt, however, that the changing legislative landscape will impact non-profit companies which receive EU funds and those with European interests. This will certainly create work. As of now, it’s a stable market and the demand for private client lawyers is high.
Public recognition of private client law has tended to be low and that needs to be tackled. A recent survey conducted by Unbiased.co.uk stated that in 2016, 36 per cent of over 55s had no will in place, a statistic which is up from 30 per cent in 2015. Nearly one-fifth think they are not wealthy enough to need a will, despite the average homeowner having over £214,000 worth of property alone to bequeath to a loved one.
It’s all about educating the public but that will take time, especially as many people have no idea of what would happen if they die without drafting a will and the issues for those left behind if they die intestate.
However, it is good to see that mainstream media coverage has increased of late. This is mostly thanks to several high-profile cases that have generated column inches and extensive airtime. A prime example is the case of Melita Jackson. This protracted dispute has taken 13 years to resolve and initially saw the entirety of her £500,000 estate go '¨to three animal charities: the Royal Society for the Protection of Birds, the RSPCA, and The Blue Cross.
Jackson’s daughter, Heather Ilott, launched a legal battle to receive a share and reduce the amount going to the charities. However, while Ilott was awarded £50,000, in March the Supreme Court ruled that this should not be increased and the remainder of the estate should go to the charities. No matter whether you believe that this is the right outcome a precedent has been set: if you choose to record your wishes in a will, they will be adhered to.
The UK’s ageing population is creating a growing amount of wills and probate work for private client practices. As a result, we have seen an upturn in the amount of work involving contentious trusts and probate, along with more and more challenged wills. However, estate planning is without doubt the largest area. The main driver for this is the continued rise in house prices as the number of families caught in the inheritance tax net keeps growing. That is something all families need to consider, especially with the now complex rules regarding transferable tax allowances and additional allowances depending on the value of your home and size of the estate. Just as important though is the fact that families are often involved in a second marriage, both as a result of divorce and re-marriage following the death of a spouse.
A new player
One business to harness these opportunities and make its mark in Yorkshire and the North East is The Progeny Group. This newly formed group combines a commercial law and private client ABS with an FCA regulated wealth management business. The idea is simple: offer clients joined up wealth and succession planning advice. This approach puts the business in a unique position to challenge the traditional view of private client services.
Martin Hasyn, director and co-founder, believes that despite the complex nature of the work involved, private client law is often thought of as the poor relation of the corporate legal world. But those involved would beg to differ.
‘Just consider the changes that have made the front pages of the newspapers and the weekend supplements recently. Probate court fees being debated in parliament, new inheritance tax rules, Supreme Court decisions on testamentary freedom – the list goes on. We are dealing with issues which a significant proportion of the adult population is interested in and needs advice on,’ said Hasyn.
One of the principle aims when Progeny set out was to provide its mainly high net worth family clients with quality, practical advice. Hasyn attributes the firm’s early success to spending the right amount of time with its clients so that they didn’t feel like just another file that would be forgotten about as soon as the ink was dry on the signed will.
‘One of the first things we did was to say that the majority of the work we do would be on a fixed fee basis, agreed with the client before we started work and therefore meaning there could be no falling out over fees,’ he added. ‘Nearly two years in we would like to think we have achieved this aim.’
Detached lawyers need not apply
If you want to be an effective and successful private client lawyer then you need to be personable and perceptive with real emotional intelligence. The list of skills that are needed is endless but in summary you need to be able to deal with many different types of people, have empathy and offer your time when it’s needed, practice good time management, have the ability to grasp complicated situations quickly, and be able to explain complex issues in a clear and concise way.
Statistically, private client lawyers are more likely to remain with their firm for the duration of their career. The working culture typically allows more free time than the corporate or banking sectors with many firms across the region open to flexible and part-time hours. There has also been a jump in the number of older lawyers who don’t feel ready for retirement with many more working beyond the traditional retirement age.
Opportunities within private client law across Yorkshire and the North East have increased steadily over the last three years. We saw a 45 per cent increase in jobs in 2015 when compared to 2014 and a 10 per cent increase in 2016 vis-a-vis 2015. There was a noticeable slow down immediately following Brexit but that was short lived. If the 2017 trend continues, we expect to see a 145 per cent increase in private client jobs on last year across the region. The majority of these roles require solicitors with between one and five years’ PQE and a shortage of lawyers with this level of experience is becoming evident.
A newly qualified solicitor with a desire to specialise in this area of law would have had limited options upon qualification a few years ago, but the doors are now open for legal executives and fee earners qualified by experience. In April 2015, STEP introduced the STEP Qualifications and Membership Framework which allows those applying for membership to have their prior qualifications and experience formally recognised through its Accreditation of Prior Learning.
How much am I worth?
Many private client lawyers across Yorkshire and the wider Northern region simply don’t realise their own worth. A solicitor with up to five years’ experience in estates, trusts, tax, and probate at a recognised regional practice can earn up to £42,000, while lawyers at a national practice will earn more. Mid-level solicitors are in short supply and with the volume of instructions we’ve seen in 2017 to date opportunities are plentiful.
To conclude, things are looking good in the private client market across Yorkshire and the North East. However, law firms need to be mindful of what’s driving the market, be reactive, have a point of difference, and they must make themselves attractive to potential employees as demand for talented lawyers is on the rise.
Catherine Henry is a director at BCL Legal