UK firms remain wary despite elevated recruitment figures
Hiring hiatus comes to an end as mid-sizers target magic circle talent, but reticence remains
Paul Olney
The UK’s top 25 firms are back in recruitment mode, with an estimated 2,133 people having been brought on board to UK offices in 2009-10 alone.
However, the total number of hires is still exceeded by the 2,370 people firms made redundant during the downturn, suggesting management caution has far from subsided.
Slaughter and May has hired 78 people during the current financial year, but in line with its conservative approach to lateral hiring all of them were associates and support staff rather than partners.
Slaughters practice partner Paul Olney said: “In general we’ve been hiring fewer than normal this year. In certain areas, such as insolvency and restructuring, there’s much more of a vibrant market. We have a more generalist practice, so our general goal has been to redeploy people where we can. We probably tend to take fewer laterals than other firms.
“We’ve not put a freeze on hiring [support staff], but we’d only want to hire in this still uncertain time where we need to add resources.”
Partner recruitment is still a fraction of overall hires among the top 25, while most of the magic circle made no lateral hires at all. The exceptions are Allen & Overy, which brought four partners into IP litigation, high-yield and equity capital markets, and Linklaters, which brought in litigation partner Christa Band from Herbert Smith.
A senior partner at Freshfields Bruckhaus Deringer defended the lack of lateral hires at his firm, saying: “We’ve lost fewer people [than other firms], so it’s not surprising if we’ve hired fewer too.”
Nick Woolf, a headhunter at Sainty Hird & Partners, said a lot of the partner hires could be accounted for by opportunistic captures by mid-market outfits of magic circle departees.
“There’s two types of lateral hires, one being opportunistic, the other strategic,” he said. “Magic circle firms are rarely opportunistic and they don’t have to be. They don’t have many weaknesses, whereas mid-sized firms do have gaps.”
One of the largest groups of partner hires has been at Berwin Leighton Paisner (BLP), which has brought in 10 laterals, particularly into finance, tax and litigation. The firm has laid off 85 people since autumn 2007.
BLP managing partner Neville Eisenberg said: “Our strategy’s always been to build our capabilities in key areas and hire the best people. The recession provided us with more opportunities to hire leading individuals, and in doing so we’ve propelled our strategy forward.”
The highest numbers of hires were made by two firms with large volume businesses, Irwin Mitchell and Eversheds, which recruited 414 and 293 people respectively. Since late 2007 Irwin Mitchell has laid off 16, while Eversheds parted company with 735.
Around 138 of Irwin Mitchell’s hires were fee-earners, the vast majority of whom were into the personal injury arm. Eversheds recruited significantly into its volume business, Legal Systems Group.
Eversheds HR director Angus MacGregor said that, despite plans to expand its volume business further, including talk of outsourcing to its South Africa office, most of these hires were due to a high churn rate. He added that the high number of hires is also reflective of the firm upgrading its finance and IT capabilities over the past year.
A considerable number of the fee-earner and partner hires across the top 25 are in litigation and regulatory practices, suggesting that bank-on-bank litigation may finally be coming through - a thesis corroborated recently by The Lawyer’s top 10 cases (The Lawyer, 11 January). Out of 14 fee-earner hires at DLA Piper, for example, six were in its litigation and regulatory division.
DLA Piper chief executive Nigel Knowles said: “What we’re finding is that we’re getting involved in far more cross-border litigation and arbitration. We’re the right size for the amount of work we’ve got going on, but we’re always looking to grow in areas of the economy that are set to expand.”
Additional reporting by The Lawyer team
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Readers' comments (32)
Magic circle partner | 24-Apr-2010 4:57 pm
This has been a terrible year for law firms, and many former associates and partners may never find another job in a large firm. But come on - auditing requirements? legal protection for prospetive employees? the SRA overseeing hiring and firing practices?
Some people need to get real.
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Anonymous | 25-Apr-2010 9:18 pm
Andre - I completely agree with you....
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Andre | 26-Apr-2010 12:52 pm
"Magic Cirlce Partner" your arrogance is staggering. An oxbridge 1st commits to working for an MC firm where he/she may have many other options, he/she deserves an open and honest account of hiring and firing policies to assess long term prospects. If the candidate is put into a capital market practice which is cyclical he should have some confidence that his skills can be transferred into say litigation not dumped at the first sign of a downturn.
The fact is that MC candidates once having practiced for a few years in a cyclical practice are not actually employable outside the MC, so you see the 1st from Oxbridge has been misled.
Definately more tranpsarency and better career managment practices are needed unless you are prepared to pay such huge salaries so that people can retire early.
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Anonymous | 26-Apr-2010 2:54 pm
As a redundant lawyer mysteriously omitted from the redundancy numbers at my former firm, I would have to say that I would like to see some more journalistic investigation of the above by The Lawyer. While I agree that auditing, etc is overkill, people should be able to make a valid choice how firms treat their staff and the above figures are inaccurate. Surely it should be for the legal press to at least investigate the true position.
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Anonymous | 26-Apr-2010 8:31 pm
To Magic Circle Partner
1. Auditing Requirements... If the law firms can't be trusted to disclose accurate statistics why shoudl Joe Public be expected to swallow the lies.... haven't we had enough of that already? Or maybe there is something to hide... which only strengthens the argument for auditing.
2. SRA regulating hiring and firing - I don't think that was mentioned explicitly. At present, like it or not, training contracts are already regulated. I dare say that may have had something to do with the fact that few if any trainees were fired (not to mention the bad publicity and the fact that they are cheap labour)
3. Legal Protection for prospective employees
As law firms don't register the contracts for trainees until they start this has meant that law firms have been able to defer but given law firm's treatment of its employees it might be no harm to have some kind of regulation in place to preclude another bloodbath.
Maybe magic circle partner, it might be worth having a look in the mirror and sparing a taught for the ones you so hastily got rid of.
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Anonymous | 27-Apr-2010 1:14 pm
I am the lawyer trained with MC with 1st class from oxbridge. i actually stayed with my firm just short of 2 years until i was managed out by negative performance appraisals which were totally ridiculous since before the appraisals all i got was rave reviews. I also heard many lawyers in all MCs had their pay frozen even though they were still being charged out at same rate. at the time i was managed out no less than 6 juniors left mysteriously not even giving their notice. this is way before the redundancy. since then i have found that my pqe doesnt matter as i dont have more than 2 years pqe, am being treated as an NQ ! also my experience is so specialised that i am told i dont have transferable skills. may be i should have done what the more savvy lawyer in my department did- slept with a senior partner. that sure worked for her.
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Anonymous | 27-Apr-2010 9:16 pm
To MC with 1st class from oxbridge
I think recruitment consultants will tell you anything so as not to get your hopes up - 2 years PQE is 2 years PQE fact. Yes it's a problem that you have specialised early but I can't believe that makes you unemployable nor that the 2 years PQE should count for nothing.
Amazing how firms manage people out with these ridiculuous negative appraisals - there should be rules in place to regulate genuine objectivity where a negative appraisal is made. Who is overseeing the appraisal process to ensure that such systemic flaws are not allowed to happen? It seems like an everyday abuse by law firms of their "trusted" employees - no wonder law firms don't want their dirty laundry audited or regulated! And then they have you by the unmentionables as you need a reference. It's galling!
I draw the line at sleeping with a partner - you owe yourself more respect than that! Stick to your guns, keep trying and at least you know in your heart of hearts that what you achieved what you acheived through tenacity and hard work.
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KRUSTY THE KLOWN | 30-Apr-2010 10:24 am
Sod's Law...don't ever change! You truly are a breath of fresh air.
The pathetic spectacle of academic genius hurling itself at City Firms is car crash tv at its very worst; like watching religious fanatics throwing themselves off mountains to show their devotion in the vain hope of advancement.
There is genuine talent in the City (and we as a nation ought to be proud of that internationally recognised talent) but, for the most part, your future at a City Firm depends on:
- whether you were born with a chin; and/or
- whether you can morph into a person with no chin because your sperm and egg donors sent you to school with chinless wonders; and/or
- whether you are related (by blood, backstairs association or failed pregnancy test) to an equity partner; and/or
- whether you win the coin toss over whether to buy another ivory back scratcher or to make you redundant because room needs to be being made for one of the above
Start your own firm and start the trend that will sweep this garbage away once and for all (and as for the body of City lawyers targeted... well, like a cartoon villain, you can always delude yourselves that one man/woman cannot make a difference)
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Magic circle partner | 2-May-2010 11:02 am
The idea more regulation and red tape is a solution to anything is a joke. If you don't like the way your firm is run, then go somewhere else or start your own firm.
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Andre | 4-May-2010 11:14 am
To "magic circle partner" for once I agree with you. I'm not advocating red tape or more regulation but more transparency - there is a difference. Also I couldn't agree more lawyers need to be more entrepeneurial and not be afraid of striking out on their own. I know a few who have and make bucket loads more than these so called precious top of equity magic circle partners. Go for it you might surprise yourself.
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