The difficulties of recruiting transactional lawyers
The last couple of years have been really tough on City lawyers when it comes to finding a new position. With so many having been made redundant you would have thought that decent transactional lawyers would be sitting around in fields, waiting to be snapped up as recruitment across the City unfreezes in response to the re-establishing of deal pipelines.
But frequently, in recent months, we have been asked by our clients why they are unable to find the right people to fill their on-going corporate and finance vacancies. Whilst it’s impossible to predict precisely what any given firm’s obstacles may be, there are underlying trends in the market that may at least go some way to explain some of the difficulties.
A lot of City firms are currently looking to hire mid-level banking and corporate lawyers, including all of the magic circle and many others in the top 30 (as well as a handful of US law firms). These roles tend to be fairly generalist roles, as opposed to the more specific leveraged finance, property finance, project finance roles of pre-recession (although we have also noticed that there is again an increased appetite within these areas). This poses two potential problems for any firm: i) there is plenty competition in the market when it comes to recruiting; and ii) over the last half a dozen years or so, lawyers have become more and more specialised and so the pool of potential candidates with the breadth of experience and/or the desire to broaden their experience is automatically diminished.
The latter is probably less of an issue if a firm is prepared to be flexible and can commit resources to taking somebody on and training them up in areas they are less familiar with. This is easier said than done when the need to recruit generally comes from a lack of resource in the first place, but partners must consider taking a mid to long term view. Of course there are potential candidates in the market who will already have more of a generalist background, but, as the tendency to specialise becomes increasing prevalent in the upper ranks of the LB100, those more generalist lawyers are probably likely to be in firms below the ideal radar to be of much interest to the larger City firms. As an aside, we would speculate that four or five years ago, in a bull market, law firm partners may have been more than happy to take on candidates from lower ranked firms, but, rightly or wrongly, still feel that the current market is weak enough to be able to attract lawyers from the upper ranks. Whether this is the case or not, addressing this particular issue is (to a large extent) within the control of the firm.
The more difficult matter to deal with is the competition. Those firms that are recruiting in these areas that already have headline grabbing deal sheets are more likely to attract the “right” sort of candidate. But a firm whose greatest strengths lie in other, possibly diametrically opposed practice areas (such as litigation, insurance, real estate etc.) may have their reputation within corporate and banking completely overshadowed. Many firms will argue that they are just as strong in transactional work as say litigation, but market perceptions are hard to change and it usually takes at least a decade for those perceptions to catch up with reality (and when it comes to recruiting contentious lawyers, you can be sure they’ll be shouting about their “market leading” reputation in litigation, which can undo all the PR department’s hard work).
Although recruitment levels at law firms are picking up at a reasonable rate, there is still an overriding sense that the economy remains unstable, with some still fearing a “double-dip” recession. Attrition rates (leaving aside redundancy) are at extremely low levels and we anticipate this will remain the case for a few months yet. However, with the number of people taking a peek at the market increasing (13% in 2009 compared to 24% in 2010 according to Legal Week), there eventually has to come a time when the pressure builds up and attrition rates start to rise rapidly. Maybe then these City law firms will have a greater pool in which to fish.
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