To say Q1 has been busy would be an understatement. Demand from our clients has exceeded pre-pandemic levels , and feedback we have had from our candidates is that everyone is working longer and harder than ever before. Activity has been across most areas of law, and across all type of law firms – from the US and Magic Circle firms through to West End firms and boutiques.
The question is whether this is sustainable!
From a client perspective, it does seem that the recent surge in demand for legal services and recruitment will continue and I believe there are a few reasons for this.
- It has been well documented how the legal market has bounced back over the past 6 months following the start of the pandemic. Deal flow has not slowed down, and predictions from our clients is that it will continue. This will continue to drive activity in all areas of law.
- Many firms continued with strategic partner hiring during the pandemic making Q1 2021 one of the busiest for lateral partner moves- these hires will undoubtedly require additional support from junior and mid-level lawyers.
- Many firms are incredibly busy and utilisation numbers are up. Many partners that I have spoken with acknowledge that this is not sustainable for their teams and want to hire to reduce the working hours and improve work / life balance for them.
However, judging by the conversations that we’ve had with candidates the current situation does not seem sustainable. The latest lockdown has shifted from people working from home to living at work, with everyone putting in longer hours with very little time to switch off. Many candidates are looking for a better work / life balance and are willing to take pay cuts to achieve this. That’s not to say lawyers are not considering firms that have higher target hours, and which recognise that that through larger base salaries and generous bonus schemes, but the balance between the two camps has certainly shifted.
Changes in recruitment
One notable shift in the past few months, which we expect to stay is the speed that jobs are being filled. Part of this is down to the use of Teams/Zoom for interviews and the ease that these can be set up for initial meetings. It is also due to more candidates being active on the market as people no longer want to put their careers on hold due to the pandemic.
With most law firms reviewing salaries now, we are being asked by both clients and candidates our views on what will happen in the summer. Firms are yet to announce salary levels but there is a sense that there will have to be an uplift. The reason for this include:
- Some firms kept salaries on hold last year due to the pandemic. This was sensible when cashflow was uncertain and it certainly helped to avoid the mass redundancies many were worried about. However, many of these firms went on to have strong years and they will need to catch up.
- As mentioned already, most are working harder than ever before, and they know how well their firms and departments are performing. If this is not recognised then they will vote with their feet and look for better remuneration, or work / life balance, or perhaps even both.
- US law firms have started to announce rises and additional bonuses in the States and if the London offices follow suit then it may have a knock- on effect to others.
Retu to the office
Some firms have already announced broad policies on the retu to the office, with either 50/50 over 2 weeks, or 3 days a week being the main options. 6 months ago, 60/40 was the most common response I got when I asked clients and lawyers, but there has been some shift in recent weeks. The large investment banks are leading the way in getting people back in the office full time, and the law firms that service these clients are likely to follow their lead.
There also seems to be more interest from candidates in retuing to the office more than 3 days per week. Part of this is driven by a desire for some normality and to escape the tiny home offices and kitchen tables everyone has worked from for a year. There is also the sense that as much as we all moan about the tube, a commute has benefits and allows us to switch off twice a day.
However, firms are conscious that if they don’t offer some flexible working it will impact t their retention and recruitment campaigns. The benefits of some home working have been well documented and firms that don’t adapt are likely to lose staff to firms that do.
Whatever firms end up doing there will need to be some “community” days when everyone from the same team is in the office. There will need to be a focus on inclusion to ensure those who are working from home are not left out of key conversations.
To discuss any of these points, or to find out more about the market please email me on email@example.com to schedule a call.