Typically now is about the time we see news emerging of the bonus season. Sadly there hasn’t been a great deal of hype to date, neither in the press nor amongst the halls of our clients. We have all become conditioned that ‘bonuses are not what they once were’ or that, ‘fixed remuneration is the new barometer of how well I am doing’. Our analysis of the 2014/15 and 2013/14 bonus season has found that they were both a relatively lukewarm affair. In fact the emphasis across in-house legal seemed to be on based salary moves. All in all, total compensation has remained relatively flat.
‘What will this year hold?’ many are asking. We tend to see a hiring spike in December/January, which often leads to the flurry of movement we all enjoy at the end of Q1 and start of Q2. This year sadly we can’t point to that. In fact, the opposite needs to be said for in-house legal, where most hiring partners are reporting increasing pressure to recruit internally. We will follow up with a further piece on the hiring trends for 2016 in our ‘End of Year Analysis’ on 18th December, but it is key to point out that in-house legal recruitment has retrenched following a strong Q2 and Q3 in 2015. Our view is that hiring/completions will be significantly down on last year and that January headcount is looking anything but a dead cert.
With a lack of fluidity in the recruitment market, retention becomes less of an issue. This factored in with the cost of ongoing regulatory enforcement issues; an ever growing cost to compliance, and measured growth amongst the banks doesn’t create the right environment for us to get excited (sadly). The Governor of the Bank of England reassured us that our banking system is now in good shape – the question is at what cost? Our view is that everything points to another lacklustre bonus season, with little by way of profit, growth or easing up of regulation – it seems plausible that bonuses could even be down on last year.
Is this a good thing for the industry? Should we be grateful that bankers’ bonuses won’t feature in the press for all the wrong reasons? In reality, we don’t feel this will be beneficial to the industry. The tightening of the belts, if indeed we are right, will be borne by the huge numbers of in-house lawyers. It may just push people towards alternative sectors though!