Unsettled weather ahead for graduates
There’s a mixed outlook for career prospects in law as firms report retention rates up, but graduate vacancies down
Those hoping to become solicitors received a mixed forecast this summer as law firms posted improvements in their retention rates, while reporting that graduate vacancies are set to drop.
So, while the outlook for newly qualified (NQ) lawyers continues to improve, the situation for current graduates is distinctly more changeable.
Warm front
The biggest improvement in NQ retention so far reported is that of SNR Denton, which posted an 83 per cent retention rate. This far exceeds the 60 per cent it achieved in March 2012 and 52 per cent it reported in September 2011.
Both Farrer & Co and Jones Day achieved retention rates of 100 per cent, up from 90 per cent and 80 per cent respectively this time last year.
Another firm that has seen a rise is Ashurst, which reported a rise to 83 per cent from 78 per cent in March.
Slaughter and May, the only magic circle firm to report so far, delivered a retention rate of 87.5 per cent, a slight drop from its March figure of 90 per cent, although that figure was slightly skewed by the resignation of two trainees from the firm before offers were made.
US firm Shearman & Sterling, with an intake of fewer than 10 trainees per year, also saw a slight drop to 87.5 per cent from the 91.5 per cent it achieved in September 2011.
Showery interval
However, the positive news around retention rates has to be balanced against recent figures released in the Association of Graduate Recruiters’ (AGR) bi-annual survey, which found that graduate vacancies in law firms are expected to decrease by 16.5 per cent this year.
Law firm respondents, 38 of which took part in the survey, also disclosed an average of 44.5 applications per vacancy, compared with an average of 73.2 applications across all sectors.
Elsewhere in the survey the median salary for law firms remains unchanged at £37,000, behind investment bankers or fund managers at £38,250, in comparison with an average predicted rise of 6 per cent for all other sectors.
Reacting to the predicted drop in vacancies Simmons & Simmons graduate recruitment partner Alexander Brown said: “The market is likely to slim down a bit. With clients focused on who is doing what jobs, it’s clear that some work may not need to be done by trainee lawyers or even lawyers full stop. I can see vacancies slimming a bit but nothing dramatic.”
However, Clare Harris, associate director of legal resourcing at Hogan Lovells, takes a different view.
“Law firms are trying to predict recruitment requirements two years in advance and numbers of people qualifying in four years’ time,” she said. “I imagine some firms are managing by reducing their recruitment numbers slightly while increasing their ability to retain more people. The emphasis for us is always on quality, not quantity: it’s better to take a slightly reduced number of people if necessary to ensure you get the ones who are most suited to your organisation.”
News that Wragge & Co offered its September intake of trainees £5,000 to defer their start dates has heightened concern over the fragility of the graduate recruitment market, although the firm has confirmed that all 24 trainees will start in September after nobody took up the offer.
Stay cool
Harris said: “I suspect this is a one-off, and I don’t think any firm would want to defer trainees if they can help it. It’s likely that reducing the numbers of graduates joining training programmes is a more acceptable way of handling headcount planning.”
This is a view supported by Laura Yeates, graduate recruitment manager at Clifford Chance, who noted: “I would be surprised to see firms needing to reduce their numbers at short notice, as the industry has been planning recruitment numbers conservatively since 2008.
“Students shouldn’t be overly concerned but it would be wise for them to hedge their bets by applying to a range of firms,” she advised.
Please note, Jones Day later corrected its retention rate to 92 per cent after one trainee decided to not apply for an NQ role.
Readers' comments (11)
Anonymous | 18-Jul-2012 9:54 am
Would love law schools to tell students this prior to asking them to spend ££££'s on an LPC
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Anonymous | 18-Jul-2012 2:04 pm
If someone is planning on starting the LPC and isn't by that stage aware of the state of the graduate/legal recruitment market then why should the law school need to spell it out to them?
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Alex | 19-Jul-2012 9:00 am
I agree with Anonymous @ 2:04. Everyone is aware or should be, of the risks of undertaking the LPC without a TC.
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Anonymous | 19-Jul-2012 2:20 pm
It easy to sit here inside the profession and say Students should be aware, but if you are an undergrad, without too many industry contacts, you are, to a large extent, reliant on what the institutions, career advisors and those at law fairs tell you.
Speaking from (fairly) recent experience, they do have a tendency to self promote and sugar coat the pill.
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Anonymous @ 2:04 | 19-Jul-2012 3:54 pm
I too have (fairly) recent experience, being somone who has gone through the LPC and struggled to get into the profession (still not sitting inside it)...of course law colleges sugar coat the issue, they are businesses marketing themselves.
If a career advisor is telling students that the graduate market is buoyant and the students are believing them then I don't really think the blame lies with the colleges. Undergrads are at university after all, I assume they have the ability to read newspapers...
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Not all doom and gloom... | 19-Jul-2012 6:44 pm
Looking outside London for a moment, firms such as Hewitsons LLP (Cambridge/Northampton/MK) have retained 83% of trainees this year (5/6), and have a vacancy for a further NQ.
Whilst the number of TC vacancies across the country has undoubtedly shrunk this year, it is a nonsense because in 2 years' time, when the economy will surely have picked up at least a little, there won't be enough trainees. A further example of the fallacy of recruiting 2 years in advance.
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Anonymous | 20-Jul-2012 5:10 pm
"A further example of the fallacy of recruiting 2 years in advance"
What sort of English is that?
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Anonymous | 24-Jul-2012 2:52 pm
The retention figures we're all waiting for are:
1) Mills and Reeve (36% of trainees retained last year; the worst of all UK firms listed)
2) Dickinson Dees (36% of trainees retained last year; the worst of all UK firms listed).
I guess Dickie Dees probably earned the wooden spoon last time (as they had the second worst retention the year before with 47%).
I wonder what weather symbol that would get?
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Not all doom and gloom... | 25-Jul-2012 2:11 pm
Re Anonymous @ 20-Jul-2012 5:10pm
The notion that law firms should recruit trainees 2 years in advance is a fallacy. Reducing the number of trainee positions at a time when so many trainees are not necessarily needed, to reflect a time in the future when the climate may have changed and additional trainees might be required, is a prime example of why the notion is a fallacy. I used the word “further” because other instances reported in the press in the last couple of years have highlighted the concept as a fallacy, and this article is a further example in addition to those examples already reported. Is that clearer?
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Anonymous | 25-Jul-2012 3:04 pm
Lawyers are waaaaaaaaaay overpaid anyways - especially in the Middle East.
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Anonymous | 28-Jul-2012 12:37 pm
The headline gives the impression that it is easier to get a job after you have completed your training contract than before, but it leaves out a core group of people... NQ solicitors that have not been retained. Higher retention rates mean that there are no jobs out there for this group of people which is a very large group, despite the increase in retention rates.
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