The picture is rosy: Corporate recruitment trends in the West Midlands

BCL Legal has the largest team of recruitment consultants focused on placing solicitors in permanent roles in Birmingham and the West Midlands. As a result, we are fortunate enough to enjoy preferred supplier status with every major law firm in the area. This has placed us in a unique position as we are able to accurately track trends and demands in every sector. 

One of the ‘boom’ disciplines is corporate, and since 2013 we have catalogued an increase of nearly 600 per cent in the number of instructions we have received regarding positions suitable for corporate solicitors. This explosion in demand comes off the back of a stronger economy, but there are other factors at play.

Increased confidences

Looking around Birmingham and across the West Midlands, it is easy to see visible signs of an improving property market: there is much building work going on and cranes dominate the skyline. By contrast, however, signs of the ‘recovery’ in the corporate market are harder to spot and less tangible but, nevertheless, they are there. 

Increased confidence in the economy, the loosening of the banks’ purse-strings, and exploration of alternative financing models have all led to an improving corporate marketplace. Towards the end of 2014, The Telegraph reported that Birmingham had seen a 4 per cent rise in the number of new start-ups. At the end of last year, Wolverhampton-based regional paper the Express and Star reported a 3 per cent increase in new start-ups across the West Midlands region but also a similar increase in the number of businesses closing down. 

The majority of positive activity is at the owner-managed business and small and medium-sized enterprises end of the market – good news for regional firms as these types of businesses are the most coveted by firms seeking to work with the local market. 

It’s important to note that while strategic and opportunistic growth dominates the market, there are also those that have survived the recession, returned their businesses to profitability, and are looking to now offload. Fiona Boxwell, a corporate services associate at George Green, notes: ‘We have had a very busy and successful 12 months and given the growth in the market we see numerous opportunities for future growth.’

The increased volume of deals is borne out ?by the fact that Gateley Plc – a Birmingham-headquartered firm – leads the Experian Corpfin M&A Advisor League Tables (both nationally and in the Midlands) for the number of deals completed in 2015. Tom Durrant, a partner in the firm’s Birmingham office and national head of Gateley’s corporate team, commented: ‘As a firm, we are committed to providing a down to earth, solutions-based and commercial service, to deliver the best quality work for our clients and the local market.’ 

He added: ‘The strengthening of the region’s corporate market, alongside the teams’ ability and specialist knowledge in a variety of sectors, has allowed it to grow into one of the largest corporate teams in Birmingham.’

There has also been particular movement in certain sectors as small businesses have sought security in mergers and private equity investors to grow their portfolios. Nowhere has this been more evident than in the healthcare and veterinary sectors.

So, the picture is rosy in the West Midlands, with work on the up. However, challenges abound for firms: the sharp increase in work obviously leads to increased caseloads for the region’s corporate solicitors. This means potentially longer hours and greater pressure. Naturally, for many firms, the reaction has been to try to recruit. This task has not necessarily been easy, given the low numbers of corporate solicitors who qualified during the recession and the massive increase in the number of opportunities available. In some cases we have heard of situations where fee earners from other teams have been press-ganged into doing corporate work to help pick up the slack.

Leaving London

In addition to improvements in the West Midlands corporate market, Birmingham firms have consistently demonstrated the ability to compete for work in London. Increasingly, price-sensitive clients are willing to explore the option of using solicitors based outside the capital, recognising that they can receive a comparable service for a fraction of the cost. One manifestation of this was Hogan Lovells’s decision in 2014 to open a satellite office in Birmingham. This was – in part – at the behest of existing London-based clients, who asked the firm to find ways of reducing their legal bills. 

Alan Greenough, who heads up the Hogan Lovells Birmingham office, commented: ‘We are very pleased with the decision to locate our legal services centre in Birmingham. We have achieved all our targets in the first year of operation and have plans to increase significantly the number of lawyers in the centre in 2016.’

The attraction for local solicitors in working for such a well-known brand and undertaking the very highest quality work for FTSE-100 listed businesses is fairly obvious and, as a result, in little over a year the firm has added four corporate solicitors and a paralegal to its team in Birmingham. Further, growth plans continue, which puts pressure on the marketplace as there is already considerable demand for talent. The strategy is clearly working for them and we can well imagine that it will only be a matter of time before other firms think about opening offices in the city. 

However, this trend is not just limited to new entrants into Birmingham. Several more established Birmingham-based teams are also pushing their ability to service London and international-based work. This push is particularly focused on the mid-market, where the lower charge-out rates of Birmingham teams can help to make the whole proposition very appealing. 

Wragge Lawrence Graham and Co’s corporate team is a prime example. As one of the largest teams in Birmingham it has an impressive number of solicitors who are able to offer a very comprehensive service. When this is put alongside the availabilities of formidable real estate, employment, pensions, banking, and other >> >> complementary teams, it is not hard to see why clients would be comfortable putting their trust in a team based outside of London. As Baljit Chouhan, a partner in the corporate team at the firm, said: ‘We have built our Birmingham practice based on providing a cost-effective alternative to Magic Circle firms, while still having the size and capability to service international transactions.’

This trend is echoed in the activities of other large international firms in Birmingham and, as a result, the city is seeing an increasing flow of high-quality corporate work. As teams get busier, they need to get bigger. This has resulted in a glut of junior-level positions being created and filled. However, securing the services of solicitors below partner level, who are sufficiently experienced and skilled to run some of the deals, remains particularly challenging. 

In-house market

If all the corporate teams in the West Midlands are busy and have the opportunity to grow, where have all the senior and principal associates gone? 

Well, there are likely to be significant opportunities for associate-level solicitors to progress in private practice over the next couple of years as increased work and billings makes it easier to create a business case for directorship or partnership. Against that backdrop, recruitment into in-house legal teams has increased significantly in the last few years as my colleague Victoria Moore, head of BCL Legal’s in-house Midlands and South West division, explains: ‘The in-house legal market has grown considerably, with the number of lawyers working in-house doubling in the last ten years. This has led to both a greater demand and more opportunities for experienced solicitors who have a range of specialisms within the commerce and industry sector.’ 

Many businesses in the West Midlands have bolstered their legal teams and, crucially, many of those recruits have moved away from private practice. Following a fairly sustained period of recruitment activity, the number of commercial contracts specialists still looking for an in-house position has diminished. Following a fairly sustained period of recruitment activity, the number of commercial contracts specialists still looking for an in-house position has diminished, leading many in-house teams to give significant consideration to appropriately skilled corporate solicitors.

For some corporate solicitors the more consistent hours that are often associated ?with in-house roles have proven to be particularly attractive and have tempted them to make ?the move. 

Further challenges for firms in the war for talent have come in the form of new entrants to the market. KPMG and PwC have both bolstered their legal offerings this year by hiring corporate solicitors into Birmingham. While their strategies differ, both have the same essential plan to offer clients: a comprehensive accountancy and legal service under one roof. 

Interestingly, it might be that the impact of this will be felt by firms far more in recruitment terms than in work terms. Conscious of maintaining relationships with firms, instructions will still be passed on high-value mergers and acquisitions.

The final question is: why should accountancy practices entering the market be a challenge for law firms, recruitment-wise?

Well, at first glance, the business model is not too dissimilar to large legal practices, so most solicitors naturally understand it. However, culturally, there seem to be some fairly major differences. For example, salaries are higher and benefits packages are even more complete than in the largest of firms. Also, there does not seem to be the same ‘long-hours culture’. One candidate of ours recently spoke about being ‘shown around the offices at 6pm and being shocked to find that they were almost empty of people.’

When this is combined with the chance to continue doing corporate work (rather than moving across into commercial – as is often involved in going in-house), the appeal becomes even more obvious. Who would not want to get paid more money to work fewer hours, while still being involved in the area of law they enjoy the most?

The reality is that an already challenging recruitment market for firms has been made more difficult by other types of opportunities. The recession had naturally restricted the number of qualified corporate solicitors between 2007 and 2012. A number of those that were in practice have now been tempted away, which is creating clear gaps and opportunities in the middle of private practice teams. 

Moving forward

While confidence remains buoyant in the West Midlands and teams continue to win work in London, the life of a corporate solicitor is likely to remain busy. Most of the firms in the region have a good supply of partners and juniors, but mid-level solicitors are in increasingly short supply. In meeting this challenge, most teams are being reasonably pragmatic and building from the bottom upwards. This approach is providing some fantastic opportunities for junior solicitors, as they are able to work very closely with partners on quality work – and promotion opportunities are in healthy supply.

Nick Fear is manager at BCL Legal, Midlands @LegalJobWMids www.bcllegal.com