The in-house legal market has picked up slightly in the first half of 2015. Predominantly, new vacancies are at the junior end of the market. We have also noted a much more buoyant interim market. Businesses are looking to cover more senior level positions with interim hires rather than making permanent appointments.
The tough economic climate has meant that many in-house legal teams have lacked the budget to give incremental pay rises, invest in training and progression or recruit new people. The only way around this has been to rely on interim support which is financed differently to head count.
The highest levels of growth we have seen so far this year have been in financial services in the Midlands. Many banks, as a result of the recession, have made bold moves to the Midlands from London. This is a cost efficient way of shipping work from London, and now the financial climate is more stable, has resulted in a large increase in the level of in-house legal recruitment.
Hot topic – skill set gap
The lack of people being trained and retrained in transactional areas has left a huge gap in the market for 3-8 PQE lawyers. This in turn has created a ‘buy back’ culture among the legal profession. Private practice teams are so loathed to lose professionals who possess skills which are lacking in the market, that they are often forced to ‘buy back’ their people with large sums of money.
Talent attraction and retention
The market is very candidate driven at the moment. The recession of 2007-08 resulted in a significant decrease in the number of trainees qualifying into the market. Key areas of activity declined; construction, commercial, corporate, banking and commercial property all suffered. As a result, fewer deals and transactions took place and fewer trainees were able to qualify in these areas, while those trainees who did qualify were exposed to fewer transactional seats. These factors resulted in a decrease in the number of qualified solicitors compared to pre-recession numbers and we are only recently returning to the same levels as before. The market remains candidate driven and effective recruiting requires a proactive approach.
Those candidates specialising in residential/commercial property, commercial, corporate or banking are particularly sought after at this time. The shift to the Midlands from London for many businesses means that candidates in that region or those willing to relocate will be in very high demand.
Even as recently as 18 months ago there had been a notable reluctance among candidates to even consider a move. The recent upsurge in the market has swayed opinion and candidates are taking the time to consider moves. Due to the skills gap and candidate shortage, basic salary has been the key factor in this shift. Private practice legal firms are upping salaries in an attempt to retain key people and this has changed the benchmark for in-house teams who are now forced to compete at a salary level to retain good people. With salaries increasing, candidates can now also take the time to consider the wider benefits of a potential new role, especially when moving into mid-level roles, where career progression is a significant concern.
The in-house market is affected by the aggressive buy back culture in private practice. Candidates who had been considering a move cannot afford to leave their positions when offered large compensation packages to stay. Our advice is that when a quality candidate is on the market, companies need to move quickly to avoid becoming embroiled in a bidding war. Most candidates find themselves in various processes and will have a number of offers to choose from.
It is fair to say that activity in the legal sector should increase moving forward into the second half of 2015. The market has been getting busier over the past 18 months with a noticeable increase at junior levels. It is anticipated that this will result in a chain reaction and more movement will occur in middle management. With businesses increasing activity and the skills shortage beginning to fade, there will be busy times ahead in the in-house legal recruitment sector.
Are you looking to take the next step in your in-house legal career? Are you looking to hire lawyers? Or are you simply looking for some further advice on the in-house legal recruitment market? Contact Lucy Beales, senior consultant at Michael Page Legal for a confidential discussion.
T: +44 121 634 8804