LEGAL recruitment specialists have reported a brisk start to the year, with Scottish law firms urgently seeking lateral hires – notably at partner level – to build specific areas of business. However, many firms risk ignoring their own associates, who may be tempted to seek other opportunities, including a growing number of specialist in-house legal positions.
Most firms remain cautious about adding to their contingent of corporate generalists, as the flow of mainstream transaction work in mergers and acquisitions remains sluggish. However, there is a renewed interest from firms in recruiting corporate law specialists in areas such as IT, intellectual property, pensions, banking and private finance initiatives.
There is an even bigger upturn in demand for private client specialists. This seems to be a reversal of the trend in the late 1990s, when most large firms and even a number of mid-tier outfits hived off or slimmed down their involvement in this traditional discipline.
One recruitment specialist said: "I certainly think there has been a revival. The volume of individual wealth in Scotland has been sustained – if not increased – by the continuing buoyancy of the property market, particularly around Edinburgh. There has also been a continuing stream of jobs in domestic conveyancing for the same reason."
According to Scottish-based consultancy Frasia Wright Associates, other areas of expertise in demand are commercial property and litigation, particularly weighted towards construction.
Founding consultant Frasia Wright said: "There has also been a notable increase in instructions from firms for partners. However, in discussing their strategies, firms seem to be looking less to the business that may follow on the back of a partner hire, which was never predictable anyway. Instead, they are keen to attract people who can establish or re-establish the firm's presence in a particular area of the market."
The battle for senior-level expertise of this type is only likely to intensify. Some Scottish firms have taken advantage of the shake-out of specialists by the big London players over the last two years, either to build their City of London presence or import valuable skills over the border. However, that window of opportunity is closing quickly as business picks up.
"Competition for specialists is becoming even more intense in London than Scotland," said Louise Carr, a consultant with Tully International, which handles both markets. "There is particular demand now from City firms for people with London experience."
In the Scottish market, according to Wright, firms will "pay what they have to" for top-drawer experience. This is further eroding the traditional criteria for accession to partnership, with "time-served" becoming ever less relevant.
High-level specialists aside, pay scales have not changed much over the past year. It is easier for firms to resist upward pressure on salaries if they are also making redundancies. In some instances, however, firms have been left with no choice but to pin extra responsibility on less experienced staff.
"If you look at private client work, for instance, there is only a handful of people with the reputation and skills to build a practice.
"Firms are therefore 'selling' this discipline to the more junior lawyers coming through and training them up."
All of which leaves the associate uncomfortably positioned in the middle – apparently in line for partnership but often engaged in the wrong type of work.
Wright said: "Firms may say they want to retain associates, and that they want them to become partners. But that message is not getting through and many associates are looking to move."
That groundswell does not necessarily mean associates with itchy feet will end up at other firms. Recruitment specialists have noted an increase in vacancies for corporate and public sector in-house lawyers; not as replacements, but to establish or expand legal departments. A significant proportion of these jobs are specialised, in IT or construction law for instance. This suggests that organisations want to bring more work in-house, or at least to manage external advice more efficiently.
NEIL FITZGERALD January 26 2004