Increase in number of senior hires within UK law firms
This article also features in Recruitment International
The last 12 months has been an interesting time for the legal sector. Increased merger and acquisition activity and the ‘opportunities’ presented by the UK’s decision to leave the EU have conspired to create a growth in demand for senior legal practitioners, particularly in the last six months.
Since August, we have seen demand for C-suite positions outstrip that for middle management and junior roles for the first time in two years. Some of these roles are as a result of organic growth but many more have been created with the specific purpose of driving future growth, as firms seek to recruit key fee earners as partners in the hope that their clients will also follow.
This has seen a marked rise in the number of Partner, Director, Departmental Head and COO/CEO positions opening up – accounting for 67% of all recruitment assignments that we have managed over the last six months.
Despite a flurry of mergers in recent years, the market remains ripe for more consolidation, but not just among the larger firms.
Smaller firms will be looking to form new alliances with one another in order to scale-up their operations in line with legislative change and to achieve growth – something that many within the sector see as becoming more difficult once Article 50 has been triggered next month.
As we edge closer to start of the Brexit trade negotiations, there is less certainty over how the legal landscape will pan out going forward. This appears to have prompted many firms to sure-up the talent they already have whilst actively targeting their key competitors and attract their best people to work for them instead.
Another key factor influencing the spike in senior hires is the rise of the virtual law firms and those operating on a fee-sharing model. Recent figures from Hazlewoods accountancy firm found that there are currently 800 lawyers in the UK operating as ‘virtual’ law firms.
This is a trend that is being driven by several factors, primarily the rise of the so-called ‘gig economy’, improvements in technology and the drive among many lawyers to swap the traditional legal firm work environment in favour of one that provides a greater work-life balance.
While most of the larger commercial law firms have seen revenues continue to increase over the last two years, this remains a challenging market with the legal landscape rapidly changing.
Although the focus for law firms will invariably be on driving growth and increasing profitability this year, the reality is that market conditions will continue to force firms to look closely at efficiencies and market segmentation.
Since 2014/15 the legal sector has seen a strategic shift in the way firms position themselves. Those who once described themselves as ‘full service’ are quickly realising this strategy is becoming increasingly redundant.
Rather, the market is becoming more and more segmented. The key challenge that law firms now face is how to clearly define those areas where they can compete and gain a real advantage over rival firms.
For some this may require a complete overhaul of their entire business model.
In order to remain relevant within their markets and positively impact their position within each of the segments they serve, law firms must adapt to the new market realities or else risk losing ground to the competition in the next few years.