Moving onwards and upwards

The hard lesson of the recession that no one can rely on a job for life has created a highly competitive and challenging recruitment market within the legal profession.

Headlines in The Lawyer over the last few months give an insight into high-profile moves which have sent shock waves through the profession: 'Sinclairs shipping team sails to rival'; 'Couderts pair defect to Hammonds'; 'US firm grabs Dentons tax head'; 'TKB woos Nabarros''.

The buzz word for top level recruitment of an individual or team is lateral hiring – a US concept which has come to dominate the UK recruitment market over the last few years.

Recruitment consultant Stephen Rodney, a director at Quarry Dougall, the largest London-based recruitment consultancy, says small and medium-sized firms face a stark choice given predictions that there would be a super league of big commercial firms in 15 to 20 years.

Unless they provide high quality service in niche areas, these smaller firms may simply be squeezed out.

Developing a new area of specialisation from within the firm takes time. Recruiting a single person could provide a boost but would not turn the firm into a key player, while the option of merging is complex, time consuming and expensive.

Hence the rationale behind the lateral hiring of a team.

Rodney says: "The market has changed enormously over the last five years. The recession meant a lot of law firms were under pressure to keep costs down."

The recession's knock-on effect was the loss of loyalty to one firm; people looked around to ensure they were maximising their potential. And having moved once, they tended to find it psychologically easier to move again, Rodney says.

The recession also affected the number of top quality lawyers in certain areas, with a dearth in banking, information technology and also capital

markets.

"During the recession, litigation was often the busiest department in a firm so more people qualified into litigation," explains Rodney.

"Now there are not enough positions for the large numbers of mid-level assistant solicitor litigators.

"On the other hand, property departments were down-sized because of the drop in the market, so people weren't getting experience at the junior level. Then suddenly, in the last week in August 1993, we got eight property instructions in a week," he says.

Law firms also face competition for their top grade staff from US law firms setting up London offices and looking to employ UK lawyers. Labour Party proposals to scrap the prohibitions on multi-disciplinary practices could also increase pressure by allowing accountants to join or take over law firms.

"Lots of clients will be attracted by one-stop shopping for legal and accountancy services," Rodney says.

Another change in the market has been a growing interest among top quality lawyers in jobs in industry.

Fiona Campbell, manager of the legal division of search and selection consultancy Alderwick Peachell says that it is recruiting more lawyers for major multi-national companies in industry, banking and commerce.

"Twenty years ago, there was a rather snooty attitude that moving into industry was second best and that if you were a really good lawyer, you would be a partner in a law firm.

"Now we are being approached by top quality lawyers who have been told they are in-line for partnerships in some of the biggest firms but they don't want to play the game any more.

"There is a lot of naivety in the legal profession. Many don't understand how the real world operates, with proper management structures and reverse appraisal systems and they are not gearing themselves up to retain these people."

Alistair Dawson, head of personnel at Clifford Chance, says there appears to be more movement within the profession this year than in the previous two years.

"There seems to have been a bit of pent up recruitment with a number of people who may have been wanting to move because they felt their career prospects were being blocked now seeing opportunities opening up."

On the service offered by recruitment agencies, he says: "A lot of them offer very similar services and seem to come in and out of fashion.

"We are always getting speculative letters as well as responses to adverts so it is difficult to say where good candidates come from."

Outside London, there have also been many high level moves, particularly in Leeds and Manchester.

Heather Russell, staff partner at Manchester-based Fox Brooks Marshall and a specialist in employment law, is seeing market trends at close quarters after a large-scale defection of partners and other fee earners to the rival north-west firm Wacks Caller.

"On the whole," she says, "recruitment agencies give a good service. They are happy to get firms together to talk about merging as well as recruiting new staff.

"We are using ACTIS in Bolton. It seems to have its finger pretty well on the pulse and always sends us appropriate people. I think the cost of paying a recruitment agency is preferable to spending the time doing it yourself when you could be doing fee paying work instead.

"Sifting through dozens of CVs is a very long process. If the agency understands your firm and sends reasonable people, it takes a lot of the hassle out of the process."

Russell says Fox Brooks Marshall is currently being "courted" by a number of firms, one in particular, about a possible merger but it had yet to make a final decision.

The firm has also been contacted by a number of lawyers who felt their career prospects were being frustrated in their current practice and who saw a reformed practice as offering better opportunities.

"There is a lot of movement at the moment and it does seem to stem back to the recession," she says. "It's made people realise they have to move to get what they want."

According to one senior partner in a City firm: "Partnerships are no longer a job for life – you get pruned if you are not performing.

"The consequence is that there are partners with portable practices who are moving around. That greater mobility means firms have to be much more aware of profitability to be able to pay their high fliers enough to keep them.

"And that means getting rid of the low fliers so it feeds on itself."

Tim Toghill, manager of the Law Society's careers and recruitment service, says the market appeared reasonably stable, despite some redundancies among the newly qualified.

He believes that there is a very different culture in the big City firms when compared with the standard high street practice of probably 10 partners or less.

"There is still a fair amount of loyalty with trainees selecting firms with the idea they will become a partner eventually."

Toghill isn't alone in this thinking. McGrigor Donald, which has 150 lawyers in its

offices in Glasgow, Edinburgh, London and Brussels, is looking to expand its London operation. Managing partner Niall Scott says he still came across a strong sense of loyalty both among colleagues and to the firm.

"People working for McGrigors have been approached by third parties with very nice offers but some feel for reasons of loyalty to their colleagues and commitment to McGrigors that they just don't want to move on."

Grania Langdon-Down is a freelance journalist.