Marketplace Update: March 2022

Approaching Spring and with Covid restrictions now shelved, the ground was being laid for firms to continue with a more unfettered push to even higher performance and resultant profits as post-pandemic normality loomed.

But with the start of the war in Ukraine, there has been a slight intake of breath from many firms. Messaging to the world about their position as they are being publicly watched and scrambling to make calls on who they can act for, dealing with the practicalities of offices on the ground, all require firms’ immediate attention. As international firms deal with the scrutiny, so the domestic market is braced for the fall out too as the energy market reacts and capital markets transactions slow. Yet resilience has been the by word for law firms over the past few years.

For the next few months ahead:

• Will the unrelenting demand for candidates pause for breath? Even if there is more uncertainty on the global stage, we can only forsee a continuation for the current appetite for lawyers. Law firm recruitment demands still significantly outstrip supply.
• Litigation is expected to boom, insolvency work is expected to increase; all additional to the demand in the larger transactional areas.
• Whilst future budgeting for partnership profits may become more conservative in the short term, remuneration for fee earners remains highly competitive, leading to ever trickier discussions on how to entice people to join the firm whilst keeping current staff happy.
• The regions continue to build their offices outside London and salary rises to counter balance London pay are starting to level the playing field a little (excluding the US law firms, whose pockets remain far deeper than even their closest Magic Circle rivals).
• As the end of UK firms’ financial year looms, the law firm bubble continues to grow, but will outside events impact sooner than expected?