MARKET OVERVIEW
There has continued to be a steady demand for Legal Counsel from firms that were active during the first 3 quarters of 2019, with particular demand across Funds, Company Secretarial, Commercial & Corporate M&A. We also saw demand for Paralegals through the first half of the year tailing off in Q4. The majority of firms had completed Brexit hiring by Q1 within Legal and as a result we saw slow down in demand for Brexit Related Counsel and Regulatory Lawyers, by comparison to the previous 12 – 24 months.
Due to contingency planning for Brexit, we have seen an increasing number of clients allocate headcount outside the UK to Dublin and Luxembourg. This has been especially pronounced within the Asset Management Industry as firms seek to build up their European businesses and distribution channels. This has increased demand for Legal Counsel and Company Secretaries with experience of:
Funds- establishment and Governance
Funds- Distribution
Experience and knowledge of Irish / Luxembourg UCITS is proving to be a very valuable skill set. In line with this, we have seen a rise in demand for Counsel who are either open to moving to Europe or able to travel there frequently. Language ability is becoming a sought after skill set with many Euro Lawyers having moved to the UK and qualified as UK lawyers finding a demand for both of their legal skill sets.
There has been a rise in demand for Legal personnel at all levels in Luxembourg due to the growing influx of funds and fund management firms seeking to scale up to deal with the increase in business. This has increased demand for Legal Counsel – Luxembourg/ Belgian qualified predominantly – although we are also seeing a large increase in Legal Counsel qualified in other jurisdictions within Europe moving to Luxembourg. There has also been a marked increase in recruiting for Company Secretarial and Funds Administration roles with an increase in Compensation.
In addition to Luxembourg, we have seen increased demand for Legal Counsel within Paris, Frankfurt, and Amsterdam, and each City has its own challenges in terms of recruiting. It is apparent that the Frankfurt market has seen a great deal of movement and it is not unusual to see legal counsel moving jobs every 12 to 18 months, even within Law Practice which is traditionally viewed as being more staid and conservative compared to the in-house market.
Across EMEA within Financial Services the demand for qualified, English speaking European Legal Counsel has certainly increased over 2019 and we expect to see this trend continue into 2020.
Within the UK we have seen an increase in demand for Corporate & Commercial Legal Counsel, particularly for those with a background in suppliers’ contracts / distribution agreements. This is proving to be a resilient and flexible skillset as Lawyers with experience of managing large (generally IT related) contracts books can parley this into a career within a different industry sector. FS firms given the higher base salary structure are well placed to hire people from Commerce & Industry and we have seen a number of moves in this direction.
With the increasing EU regulation, we are seeing an increase in demand for candidates who can work within the governance area in particular with respect to implementing Third Party Governance Regulations from the EBA.
IR35 Impact on the Temporary Contact Market
We have seen a reduction in the number of firms willing to offer day rate contract work via limited companies. They are either switching to PAYE day rate with Taxes / NI etc. withheld and paid at source or to Fixed Term contracts with access to the full range of employee benefits typically for 6 or 12 months duration. Some Banks have been taking a more accommodating line and have been offering to pay the NI contributions for candidates to keep key contractors on site.
A large number of firms have simply decreed that they will cease hiring contractors and have given managers an ultimatum to either switch existing long term contractors to a permanent headcount or lose the contractor and potential headcount. There is the option of Statement of Work or “SOW” which is being promoted as an option for firms seeking to hire a team of contractors and this is proving to be a useful solution, and one we have implemented with a number of clients.
The reduction of contract roles has meant that there are now a comparatively large number of well qualified contractors seeking new roles with a realisation that some degree of flexibility is going to be necessary over daily rates and salaries due to an increased supply of people and the reluctance of firms to continue to employ staff on the daily rate / Limited company basis.
Whilst we have seen a reduction in the number of contractors hired due to the impact of IR35, firms are still using contractors to provide short term cover for business critical areas and for Maternity cover, as well as a flexible resource in periods of increased demand. As a result we are seeing more roles being offered on a 6 month or 12 month contract basis.
Company Secretarial
Demand has remained steady for Company Secretaries, both full or partially ACIS qualified. Those with experience in Funds / UCITS administration are in particular demand due to the increase in Funds establishment particularly in Dublin. There still remains a high number of contractors in this area, but this is being reduced as noted above.
Paralegals & Legal Associates
We saw an increase in activity and demand for experienced paralegals during the first 9 months of the year, although this has tailed off now. Increasingly, Paralegals are seeking to qualify in-house, and firms that offer this opportunity are viewed positively.
Impact of Flexible Working on hiring patterns
Increasingly the opportunity for flexible working – typically 1 to 2 days per week from home – is increasingly being viewed as a “must have” by candidates and placed on equal footing with compensation in terms of priorities. As the market shifts more towards flexible working, firms that do not offer flexibility will start to be at competitive disadvantage. One key factor cited by candidates looking to move from Practice into an in-house role is the opportunity to work flexibly and/or to not work extended hours well into the evenings and weekends. We anticipate that work life balance will continue to be a key going forwards.
We have also seen an increase in reduced working hours e.g. 3 or 4 days per week or working on a compressed hours basis e.g. 5 days work but compressed into 4 days. Firms offering these schemes tend to retain staff well as it is very hard for a new firm to offer this scheme immediately, and in fact we are seeing a high degree of resistance from hiring managers to these type of schemes in general.
Looking forward to 2020
Hiring Trends
With the Brexit date secure, firms are now able to make firm plans / put plans into play and we will continue to see a large amount of headcount being directed away from the UK into Dublin and Europe
Areas of demand will continue to be Funds, Corporate, M&A and more specialised areas e.g. Pensions and Structured Finance.
Demand for 3-5 years PQE lawyers from Practice will remain strong and this level of experience is heavily favoured by in-house firms
Regional hiring across the UK
We will continue to see a reduction in headcount in London with firms seeking to hire Legal Counsel outside London e.g. in Manchester / Edinburgh / Glasgow, this trend will continue although the regional market is typically a challenging place to find new talent given that the talent pool is thinner.
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For more information about the market or current opportunities please contact one of our Consultants.