Recruitment firm JMC Legal and market data analysts Vacancysoft reported last week that 40% of UK lawyer vacancies are in London, with in-house the fastest growing source of vacancies (58% of vacancies in London in 2022, with tech companies accounting for 29% of these).
Salaries have also jumped, as City firms compete for talent amid a shortage of qualified lawyers. US law firms are now offering 50% above Magic Circle firms in some cases, partly because sterling is low in comparison to the US dollar. In July, for example, Akin Gump raised its salary for newly qualified lawyers to a stonking £179,000. London-headquartered firms have also boosted pay, for example, McFarlanes is reported to have raised its newly qualified salaries this month to £107,500, having pushed them 11% to £100,000 last November. At the other end of the scale, profit per equity partner topped £2m at Magic Circle firms Freshfields Bruckhaus Deringer and Clifford Chance for the first time this year.
Recruiter Robert Walters found 85% of law firms in London are recruiting, with more jobs posted in the first half of 2022 than in the whole of 2020. Moreover, nearly all firms (93%) have no plans to cut headcount.
Tax specialists are the most sought-after lawyers, followed by real estate and M&A.
Richard Harris, chief legal officer at Robert Walters Group, said: ‘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.’
