An estimated 3,000 soliicitors – almost a third of the profession – will have left the law either by choice or through cutbacks by the time the recession ends. Anthony Robson concludes his recruitment investigation with a look at the employee’s relationship with an agent.

Not for the first time I appear to have touched a gloomy nerve, asking recruitment agent Rosemary Fitzpatrick about the effects of the economic crisis on the legal profession, and the follow through for recruitment to that arena. It’s a pessimism I had already heard.
“The biggest surprise to me personally was the speed at which jobs were disappearing,” she says.

“Firms reacted swiftly and seemed to identify very quickly the skills they could dispense with short, medium and now longer term.  We are now settling down to grit our teeth and get through it.” Everyone appears to have a bad feeling about this.

A year ago when the credit crunch was in its infancy, it was something that was often referred to, but less often understood. Twelve months on and the financial slide has seen law firms moving to shorter working weeks, or forced into making redundancies. The scale of the current situation is something that has caught many of them out.

“Arguably it is more all-encompassing than last time in terms of disciplines affected, but I would say that the speed with which it has happened has surprised a lot of people, who had been gearing up their departments for a continued boom period, especially in transactional areas. So the speed of the downturn is probably more severe,” says Rick Mattison from Michael Page.

While the future isn’t looking particularly certain at the moment, the present is clearly proving difficult for certain types of firm. With property and financial services as the sectors that appear to be bearing the brunt, this will obviously be felt more keenly by those firms who specialise in those sectors. Some however, are better placed to deal with the changing situation than others, according to Mattison.

“Firms that have a more diverse client base, and a full service offering are better placed, as their revenues will necessarily drop in areas such as commercial property, and transactional banking and corporate, but are effectively hedged by the expected and ongoing increase in other areas such as employment, commercial dispute resolution and corporate restructuring and insolvency,” he says. He  notes too that these firms also have more scope to use their resources, namely their lawyers, in a different way within the firm. The knock-on effect of that, he says, is that firms fill positions with people they already employ, and so those jobs don’t make it out into the market.

 “Unfortunately, lawyers tend to be pigeon-holed in the specific areas in which they operate, almost upon qualification. The difficulty is that although lawyers looking for a new role often want a change or to move into a different area of law, or discipline, when we are instructed by firms or in-house clients, often they need a lawyer with specific experience, and this makes it tricky to place someone who does not necessarily have the skills and experience required.

“It can and does happen, but rarely, and often where the candidate has a more general corporate/commercial background”. He has even noted that in some of the large financial institutions, taking on any new staff, from admin support upwards, has to be cleared at board level.

Stuart McComb of Change Recruitment wonders just how does a recruitment consultant face up to the fact that there are now more people out there looking for jobs, but less jobs to go round. He says that they used to be driven by candidates rather than jobs, something which has now “flipped”.

“Firms are recruiting by absolute necessity,” he says.

“Those lawyers who are already in a job are reluctant to move in the current climate, and the situation mirrors the housing market, the easiest indicator of the problems; people move house at the moment because they have to, not because they want to. Caution is now the watchword. In the current climate, anyone changing jobs wants to ensure any element of risk is eliminated, and will only forego the service built up with their current employer if they are convinced the opportunity offered is assured and it offers definite prospects. Where this can be ascertained, some people in jobs will still move.”

This reluctance to move sees less and less positions appearing in the job pages. But none of the agents offer any evidence of candidates getting frustrated, or angry, at not being placed. There seems to be an understanding in the main of the position, and Rosemary Fitzpatrick has seen some people taking this as an opportunity to make themselves more employable when the cycle moves upwards again; “Some people are doing their transfer test, or going back to university to do a Masters,” she says.

“Consolidation is the key, much like a football club in a ‘transitional phase’. Relationships have to be maintained, and honesty is the key when faced with a potential candidate. With the jobs simply not being there in the property or financial sectors, it’s not in an agent’s interests to give false hope to a candidate. The truth may be hard, but it’s a pain that is easier to bear than constant promise and disappointment. And when the jobs start coming in again each agent will hope they’re the first to get the phone call,” he says.

He also notes that more people are arriving through redundancy rather than leaving a job through choice, obliging a firm to be very careful should they later re-fill that role.

“Recruitment to a professional industry requires integrity and diplomacy, and not just when firms are going through redundancies and are having to make the very difficult decisions they are at the moment. It is therefore imperative to be sensitive to the prevailing market conditions, meaning we need to adapt our approach accordingly,” he says.

“It would be inappropriate to contact firms with candidates when they’re laying people off.” Strange times indeed, which may require a bit of lateral thinking, and a large dose of understanding the market, for a large number of recruitment agencies to get through it.

Even when positions do come up there seems to be a reluctance to make it a priority. Rosemary Fitzpatrick has had a number of firms approach her with positions who don’t look at it urgently. All of a sudden the recruitment agent’s job has become perhaps more busy, with less reward. More CVs are landing on the desk, and many candidates are declaring that they are willing to move to a different area of law, with perhaps a smattering of experience from a number of years back.

An economic downturn such as this is naturally going to see companies seeking ways to see themselves through, which leads to certain areas doing well; “The areas that seem to be doing ok are, unsurprisingly, employment law, corporate recovery, insolvency and litigation.  There will always be a demand for particular experience even in these days of recession, such as asset management, tax, planning and PFI,” is Rosemary’s view. But perhaps of more interest for the general job market is the effect this could all be having on in-house provision.

Rosemary and Rick both mention a bit of an exodus to the Middle-East, Dubai and Abu Dhabi more specifically, where reality hasn’t quite bitten yet. “The bubble here has burst, so where’s the next one?” Rick asks. But for those staying closer to home there could be changes in emphasis that produce some light at the end of the tunnel.

Mattison says in-house positions have not dried up in quite the same way as private practice. “Some corporate entities who outsource their legal work at present are looking at ways to cut costs, and one very feasible option is to hire another in-house counsel, or indeed a first legal advisor in-house,” he says.

“In companies where all the legal work is outsourced, this will represent a potentially large cost saving in terms of paying a solicitor’s salary, and related costs, rather than a high hourly rate for work which can be done without much issue in-house, such as general commercial contracts work.”

The presence of in-house positions certainly isn’t to say that there are ‘green shoots of recovery’ showing, but it highlights the task facing recruitment agents that are dependant on placing candidates as their source of revenue.

“In the middle of the boom,  we couldn’t fill all of the property positions the firms had,” says Mattison.

In the meantime all of the agents continue to forge and maintain those relationships that make them hope they will be the first port of call when things do improve. Most think that the first two quarters of 2009 will remain hard work. When that recovery does come Rosemary is sure there will be a lot of caution as firms strive not to be caught out in quite the same way again; “How the firms will react is really the $64m question and I certainly couldn’t even begin to hazard a guess. When the recovery does begin it will be almost as slow as the downturn was rapid. I suspect, in that case, firms will reassess their business models, recruit cautiously and possibly only bring in those skills that have been identified as necessary for specific projects, perhaps leading to an increase in demand for locum solicitors.

“But for the moment I’ll retain my hope and optimism, tempered with realism.”

It could be that now is actually the best time to meet up with your recruitment agent, though you may have to pay for your own coffee. In the meantime it’s worth bearing Rick’s final words in mind; “There is always a requirement for legal advice, it is just the nature of that advice that shifts in tighter Economic climates.”