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Law News | Record Year for Legal Market: 85% of UK law firms planning to increase staff headcount
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Record Year for Legal Market: 85% of UK law firms planning to increase staff headcount

News TeamBy 511 Comments4 Mins Read
  • 85% of law firms in London are recruiting – with more jobs posted in H1 2022 than all of 2020
  • 93% of city firms do not plan to make any cuts to headcount
  • US law firms offering salaries 50% above Magic Circle
  • Tax specialists the biggest in-demand, followed by Real Estate and M&A

An extraordinary 85% of City law firms are planning to increase staff numbers for the remainder of 2022 – according to new jobs data from global recruitment consultancy Robert Walters.

Legal vacancies in London for the first half of 2022 (January – June) have already surpassed what we saw for the same period last year (+4%), despite a slight -12% dip in Q2 bought about by the Russia-Ukraine conflict and subsequent rising inflation.

In fact, legal job vacancies in the City have eclipsed what was posted for the entirety of 2020 – with Robert Walters reporting a +22% increase just six months into the year, when compared with the whole of Covid-riddled 2020.

Richard Harris, Chief Legal Officer at Robert Walters Group, comments:

“Whilst downsizing at volume within law firms is rare – the legal world is prone to boom and bust in regard to hiring.

“What we encounter during a downturn is a cut back in new trainees, but when demand increases this means there are simply less available qualified lawyers at the junior end of the profession, putting pressure on the system as a whole.

“Add in truly incredible wage inflation, greater specialism making some types of lawyer scarce, the increasing scale of in-house teams – partly in response to the increasing rates of law firms which funds the wage inflation – and we have a ticking timebomb of pressure.”

War for Talent Intensifies

A resounding 93% of London-based law firms are not currently planning to make any staff reductions this year – feeding further into what legal recruitment firm Robert Walters calls the biggest war for talent seen in over a decade.

The battle for talent means that we are seeing salaries for those moving firm increase by 30-35% on average – compared to around 15-20% in financial services – with the added flexibility of not needing to be based in the City 5-days a week.

US law firms continue to headhunt aggressively – offering USD based packages, which given the relative FOREX strength, is resulting in offers almost 50% above what professionals currently earn in Magic Circle firms.

These pay increases go across the board – where a US law firm has set an entirely new benchmark for newly qualified lawyers this summer offering in the region of £179,000.

Dan Harris, Director Legal In-House at Robert Walters, comments:

“It truly has been the perfect storm. A combination of Brexit, a delayed start in degrees, and a pause in junior hires in 2020 has left many law firms scrambling to fill the gaping hole in their talent pipeline.

“It was not long ago where the biggest graduate earners in London typically worked within tech or banking – but lawyers are very much at the top of that chain and there are no signs yet of this slowing down.

“What’s more we have seen a record number of law firms increasing their salaries this year, coupled with firms large and small offering one-time living crisis bonus payments as a retention tactic.”

Specialisms in Demand

Vacancies for tax lawyers have seen the biggest jump – increasing by +21% this year, in part bought on by pending change in Corporate Tax from 19% to 25% from April 2023, as well as further reforms expected once a new Prime Minister is elected.

Legal specialists in Real Estate (+8%) and M&A (7%) continue to be in demand – following a record-breaking year for conveyancers (1.26 million transactions) and mergers (60,000 takeovers).

On the contrary, vacancies for Banking lawyers are down -24% on last year, followed by Litigation, Dispute & Resolution (-8%), and Employment law specialists (-7%) – however much of this could be explained away by the record levels of hiring we saw in these fields in 2021; +184%, +62%, and +125% respectively.

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