COVID-19: Recruiters call on legal sector to make ‘brave’ decisions

COVID-19: Recruiters call on legal sector to make 'brave' decisions

Andrew Inglis

Headhunters are calling on Scotland’s legal sector to avoid repeating poor HR decisions made during the financial crisis in order to survive and thrive in a post-COVID-19 economy.

In its eighth and latest annual salary guide, written prior to the pandemic, Core-Asset Consulting were already highlighting the impact the persistent “market hangover” from the last recession was still having on law north of the border.

After 2008, major cuts to middle-management resulted in a chasm between partners/directors and retained trainees and newly-qualified staff, which is reflected in 2020 by a succession crisis, with a shortage of clear future leaders being developed internally.

Likewise, a cutting of entry-level opportunities and the cautious approach to headcounts after the financial crisis saw the majority of wages suppressed until very recently. Core-Asset’s salary guide for 2020 showed this was starting to turn, with newly-qualified lawyers benefiting from the most significant increases in base salary last year – up 8-12 per cent on 2018.

However, progress may already be in reversal, with evidence that many firms have already made cuts to salaries of anywhere between 10 and 20 per cent.

Andrew Inglis, who manages the Edinburgh-based firm’s legal recruitment division, told Scottish Legal News: “There are pertinent lessons to be learned from our recent history, where heavy headcounts going into 2008 meant drastic decisions needed to be made.

“Both in private practice and in-house, the main casualties of reductions were mid-level associate and senior associate, typically with three to eight years’ post-qualification experience. This has left us in a situation where there is a real shortage of clear future leaders coming through the pipeline.

“Clearly, should a COVID-19 related downturn result in anything like the last recession, as we suspect will happen, tough decisions will have to be made again. My advice would be that firms make brave long-term moves wherever possible and try to keep a balanced structure.

“Partners must act very responsibly to enable this to happen – and where required – put the long-term interests of their firms before themselves, even if that means deferring, cutting or scrapping dividend pay-outs.

“There is hope that this is happening. For instance, we have already seen a significant cash injection from the equity partners at Burness Paull back into the firm.”

Core-Asset is also reporting a range of cultural issues that pre-date the crash that it hopes could be consigned to history as a result of the coronavirus lockdown forcing the adoption of mass home-working and flexible hours.

Previously entrenched views had seen many private practices struggle to maintain a diverse workforce, with many new mothers, in particular, being put off by rigid working hours and environments.

In addition, significant advances in technology and security have enabled home-working to become feasible, something Mr Inglis hopes to see maintained, ridding practices of ingrained presenteeism.

He added: “The firms that will likely do best through this will be those that already had a more forward-thinking approach to working practice.

“It’s not just workflow. Cutting-edge technology is now vital to all aspects of the profession. Already during this current crisis, we are seeing the impact the paper-driven Registers for Scotland office which was closed for a long period of time during the initial outbreak has had on the real estate sector, for instance. We also have firms with a large backlog of cases due to the closure of the courts.”

All off the back of the last recession, a major trend within both private practice and in-house legal market over the last five to 10 years has been consolidation. Despite this, the remaining independents, including the likes of Burness Paull, Shepherd and Wedderburn and Brodies have been thriving, run as efficient businesses and enabling their staff to take on greater responsibility and behave more entrepreneurially.

With COVID-19 adding to an already uncertain environment, Mr Inglis also believes Scots lawyers should not panic about their career prospects. He has, however, urged the sector to become more open-minded about re-training – and for lawyers that would mean more moves into different specialisms.

He added: “I just do not believe we will see many more English and international firms swooping to acquire independents as they too will be impacted by the pandemic. That appears to have reached a tipping point. We are perhaps more likely to see mergers within the independent space, with distressed firms shedding loss-making departments and combining with former rivals. All the signs are pointing to us having fewer firms off the back of this.

“Lawyers remaining in post should try to remain upbeat too – as many may also have an accelerated development with fewer layers removing ceilings to promotions and increasing responsibility.”

Mr Inglis, who has more than 20 years in legal recruitment in Scotland, also offered some timely advice for those looking to enter the profession, but unable to secure traineeships.

He said: “Many of the best lawyers I have worked with over the years have gained invaluable experience outside the profession. One in particular spent a few years post-university in a public facing retail role. Her ability to calmly deal with pressure situations and difficult clients was carved during that time – and it served her incredibly well.

“I’d say to those worried about a lack of opportunities, or the deferred starts that we are already hearing about, should try their best to get as much work and life experience as they can manage, ideally in a commercial setting. Then be proud to share those learnings on your CV and at your next interview for a legal role.”

To download the salary guide in full, click here.

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