Marketplace Update: Business Services

A game of two halves. From April 2022 recruiters focussing on business services personnel in the legal industry experienced a market that some had never seen before. Law firms undoubtedly faced a huge talent shortage across many disciplines. Candidates became well aware of their market worth and chose to look for positions that offered more flexibility, a better work life balance and increased salaries. The number of vacancies registered with recruitment agencies was at record levels.

Technological transformation was and remains the theme that dominates law firms in London, with firms keen to centralise their processes. Artificial Intelligence, Business Intelligence, Data Analytics and advancements in technology all became huge talking points.

Confidence in the market grew as the number of vacancies outweighed the active candidates. Many firms reported record profits, and attracting the best talent to continue that success was priority number one.

Specialists were employed by some of the traditional firms throughout the legal market with newly created positions, including Legal Project Managers, Innovation Managers, and Legal Technologists.

We have also seen a growing trend of law firms investing in their employees by creating newly formed roles specifically focussed on coaching and mentoring (as part of their Learning and Development function). This investment reflects the importance placed on employee development and retention strategies across firms of all sizes.

From our view, the main areas of growth within law firms were Risk and Compliance, IT, Human Resources and Finance.

The shift in the market towards the back end of 2022 was evident as law firms in London became a little more cautious with their hiring across business services functions and this theme continued into 2023. It’s quieter and certainly less hectic, but firms are still hiring, particularly in key areas such as Finance, Risk , HR and IT.

As we write this summary (April 2023) the number of vacancies is fewer compared to this this time last year but the challenge remains the same. Recruiters and law firms face the challenge of candidate demands - work/life balance, hybrid working, part time hours, and training and development still remain important factors when business services personnel consider a move.

Law firm recruitment teams are expanding with a view to attract their own talent, which has proved to be successful in certain areas, but for senior hires and attracting personnel within niche specialist areas the challenges remain.

With all of the talk of wellbeing, development, and hybrid working policies, financial reward is still the key factor with candidates moving from one firm to another with some demanding a salary increase of up to 25% in certain areas, compared to the average 3-5% offered as an increase if they were to stay at their current firm.

In summary the optimism of the early part of the financial year was replaced by a ‘wait and see’ attitude towards the back end, but as firms continue to grow (with new partner hires), despite this caution, we envisage the number of business services vacancies to steadily increase as we head into the summer months and predict this theme will continue throughout the rest of 2023 and beyond. We may not reach the record levels of last year, but the early signs are positive.