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More than a fifth of law firms have had to lay off staff as a result of the economic climate, a new study has found.
The poll, conducted by recruitment consultancy Badenoch & Clark, revealed that 20.8 per cent of the 900 staff working at law firms and in-house teams surveyed have had to make redundancies.
Former barrister Alison Burgin, associate director of Badenoch, said corporate, M&A, derivatives and asset investigation have been hit, in addition to redundancies in property and construction.
“In the City firms this has been pretty much under the radar. Firms are simply not replacing people when others leave,” she said. “It’s not like with the banks, such as UBS laying off 600 people. It’s being done in a private and practical.”
Fifty four per cent of respondents came from outside London and 29 per cent from international firms. The study found that the number of staff not being replaced or being laid off is evenly split between the City and the regions.
The report also revealed that in-house teams at financial institutions have been worst hit by the crisis. The study shows that 58.1 per cent of lawyers in managerial positions see this as an opportunity to grow by picking up the misplaced talent.
But Burgin warns that the downfall of financial institutions does not mean that the talent is out there.
“As we’ve seen in the Lehman situation, the administrators are keeping on those lawyers they see as having a high pedigree. It’ll be a while until they’re on the market,” she says. “Also, if they’re good lawyers and have decided not to stay on, then they’ve been quickly snapped up through others contacting them directly. Those in this situation, who are yet to accept offers, are assessing their options.”
The report also shows that law firms have not taken as much of a cut-throat line as they did during the recession of the 1990s, with the majority of firms still upholding their work-life balance and career development programmes.
According to a survey of more than 1,000 legal staff by Badenoch, 77 per cent are still looking to take their full holiday entitlement. “Firms have more of a long-term approach than they did in the 1990s, and that means still investing in newly-qualifieds and not stopping the trainee intake,” says Burgin. “They’re trying to keep hold of good talent by ensuring there’s still work-life balance and continued training programmes.”
She adds that law firms’ cost-cutting has seen partners do more work themselves as opposed to spending time pitching clients and dishing the work out to associates.
The Badenoch report may be a snapshot of the current situation, but there could be worse to come. As Burgin says: “We’ve not yet seen the full extent of firms’ exposure to the risk from the economic markets.”
• More than a fifth (20.8 per cent) of legal practices have laid off staff due to the economic climate. • One in 12 lawyers are unwilling to move in the current climate. • Almost 60 per cent of firms see the impact of the credit crisis as an opportunity to grow. • Only 21.8 per cent of firms are finding it difficult to attract the right talent.