Vaulting ambition

By William Cock, Director, First Counsel

What, if anything, has changed about recruitment by law firms? In the boom times, pre credit crunch, the vast majority of UK law firms sought to grow. Those few that did not were accused of a lack of ambition. How times have changed. 

Larger firms

In the larger UK firms (the top-30 in London or the regional heavyweights in the other main legal centres), recruitment activity virtually ground to a standstill at assistant levels at the start of 2009 and through the summer. Certainly in the traditionally ‘hot’ core transactional practice areas of corporate, banking and property there was virtually no activity. It is no coincidence that these practice areas also witnessed the largest numbers of redundancies. However many of these firms started to hire again by the beginning of 2010, particularly in finance and corporate.

Most tellingly, some partners have also gone as far as saying, off the record naturally, that they may have “cut too deep” in their redundancy initiatives. Interestingly there are still some significant firms that are not hiring, one must assume because the work levels do not require it. This lends credence to the view that there has been a flight to quality. Some firms which punched above their weight in the frothy pre credit crunch transaction boom are finding it very difficult to regain past glories. 

Mid market

Contrast that with the situation in many mid-ranking firms, some of which have been less badly hit by the downturn. There was throughout this period recruitment activity, particularly at partner level. Firms unashamedly cashed in and grabbed the chance to pick up talent they would not otherwise have been able to. As a consequence of this there was (and still is) a lot of interview activity. A lower proportion of this (compared to previous years) is actually translating, however, into firm offers and acceptances. Again, the reason for this is driven by the wider economy.

Growth for its own sake is not yet back on the agenda, and the hire more than ever before has to make sound commercial sense. This may seem self evident now, but prior to the downturn there have certainly been instances of badly thought out and rushed partner hiring, which resulted in disenchantment on both sides. Firms do not want to make the same mistake again, and so the numbers are the subject of ever closer scrutiny.  

Hot sectors

In terms of recruitment, 2010 is already much busier than 2009. In certain practice areas, particularly finance and corporate, we already see increased activity and we have little reason to suppose that this will not remain the case. The demand for specialists (tax, pensions, employment and so on) will remain.

We also anticipate a significant spike in litigation, particularly financial services related investigative work. While many have been talking this up for the past year or so, in truth there has not been the huge volume of recruitment anticipated in litigation. This has surprised many but may well be because whilst many litigation departments have been busy they have not been overstretched and recruitment tends to follow on from there being too much work. 

Invest in retention

Of course no one knows with certainty what is going to happen. But one can say with some confidence that when the recruitment market returns with a vengeance, as it will, then the competition will be as fierce as ever. Whilst many recruiting firms may think it is still an employer’s market, they would be well advised to keep the changing market under constant review. There is a perfect storm brewing here. Just as things start to get busy again, firms will need to recruit with increasing fervour. At the same time, their competitors will be looking and will in turn be talking to that firm’s lawyers.

Law firms will be back then to the days of recruiting just to maintain numbers. (In sixteen years of legal recruitment I cannot remember a time when lawyer supply and demand were in a state of equilibrium). As ever, the firms that prosper will be those that move quickly and decisively but also invest heavily in their own retention strategies. Bear in mind that pretty soon – if that time has not already come – firms will not be able to avail themselves of that most effective of retention tools: a slow recruitment market.

The message is clear – be on your guard. Don’t think for a moment that your people will feel they owe you any allegiance. Pay them well and look after them – if you don’t, you risk wholesale departures. Even now it is time to start loving your people again. You may think they should be grateful that they still have a job, when so many around them have lost theirs. Sorry – they do not see it that way.