With a generally lacklustre market through the majority of 2001, 2002 and most of 2003, many of the large UK firms that are often bullish in retaining their newly qualified lawyers have found themselves in a position where they have offered seats to only a small percentage of their trainees. At the time this was an obvious plan of action. Why place trainees into seats where they will not be fully utilised? From a commercial cost-control point of view, this makes perfect sense, but a couple of years on and the question has to be asked: have firms cut too much junior talent?
In a global market, many commercial organisations can afford to work in this manner, flexing their resources in line with the market. The problem law firms face is not only that they are the primary creators of new talented lawyers, but that they also all tend to have the same demands and the same pressures at the same times. This in effect almost eradicates the flexibility of the resource. If the majority of full-service firms felt in 2002 that it was not necessary to place a newly qualified lawyer into their IP team, then it has to be expected that two years later, when more than 10 firms are trying to recruit a two-year post-qualified IP lawyer, there are quite simply none to be had.
At the same time, UK law firms are in an unenviable position. They are seen as the hunting ground for an ever-increasing range of competitors. Dozens of US firms have arrived in the UK in the past five years with aggressive hiring plans and they are willing to spend the money to hire the best. How many FTSE 100s have elected to increase their in-house capability and offer a chance for a lawyer to develop their commercial skills? How many investment banks now view lawyers not only as candidates for their legal teams, but also offer them advisory roles in corporate finance or M&A? How many small UK firms are offering an enhanced work-life balance to cater for today’s lawyer, who doesn’t think working 2,400 hours a year is acceptable?
The truth of the matter is that we are about to enter a challenging period for every law firm, investment bank and corporate. For the past three years we have enjoyed a period where there has actually been a relatively high supply of two-to-six years’ post-qualification experience lawyers in the market, thanks to the large quantity of newly qualified lawyers taken on in 1997-2000. At the same time, the demand of the markets has remained relatively flat.
Now, however, we see new demand: more US firms, more ambitious and ever more international UK firms, niche specialists, not forgetting the increased growth of in-house teams. We are facing a period of minimal supply and, combined with the never-ending desire from many of the lawyers either for more money or a better work-life balance, it has to be acknowledged that we are on the brink of a ferocious candidate-driven market.
Could this have been foreseen? Probably. Should this situation have been managed? Ideally. But why should the firms that invest in training lawyers have to subsidise the market’s appetite and future appetite? Hindsight is a wonderful thing, but in reality we all need to be prepared for a market where the best individuals receive multiple offers and where their current employers attempt to buy them back 100 per cent of the time.
In our experience, around 10 per cent of the leading law firms, leading investment banks and FTSE 100 organisations currently have world-class recruitment strategies and practices, and around the same percentage have leading retention and development strategies. It is these organisations that will win the battle for talent.
One wonders how many firms and corporates are genuinely ready for this market, or even know it is coming.
Noel Marshall is managing director of Law Professionals, a division of PRO Ltd