The annual PwC law firm survey has showcased the developments for firms within the last year and noted the general trends across the industry in recent years. With a particular focus on four areas across financial performance, people, working capital, and strategy/transformation, here are the main things reported for 2023:
1. Financial Performance
Although the last few years were profitable for law firms, the industry has faced several challenges within the last year. Globally, firms have been impacted by geopolitical factors, including the Russia/Ukraine war; within the UK, firms have further faced a cost-of-living crisis and numerous increases in interest rates, with a UK peak in October 2022 of 11.1%. The shift these have caused in market conditions and deal activity has impacted the financial performance of law firms.
The survey suggests that although income growth was achieved across the sector, this is generally sitting below inflation. For example, across the Top 100 bandings, average UK fee income growth was between 8.0 but costs have increased for staff, property, marketing, and technology, limiting overall net profit margins. As a result, 44% of the Top 100 firms have reported a drop in profits, reportedly one of the biggest drops in recent years.
Regardless, firms remain optimistic for the next period of growth, with all Top 100 firms anticipating some increase in profit for the coming year. Overcoming the impact of cost inflation and pricing is likely the main challenge firms will face in accomplishing this.
Most law firms have continued to grow headcount across fee-earners and business services, with growth ranging from 2% to 4.6%. Firms report that they are placing particular emphasis on evaluating the size and shape of their workforce, aiming to hire skillsets which align with the industry’s shift towards digitalisation, as well as those which can fill skill gaps in areas such as change and leadership.
Considering one aspect of diversity and inclusion, the survey has noted an increasing trend in female representation at full equity partner level, rising in the range of 0.8% to 2.3% across the Top 100 firms.
With a general slowdown in recruitment, firms report that they will be adopting less aggressive hiring tactics to match reduced demand within certain practice areas. Where they continue to hire, they will focus on talent within practice areas that are growing to minimise the spare capacity arising from reduced hiring.
3. Working Capital/Financing
Assessing priorities for 2023, over 50% of the top firms report improving working capital performance is at the top of their list. Notably, it barely featured in past years but has been bolstered by high inflation and interest rates.
Following this, their next highest priorities – standardising and centralising performance, and increasing the use of data analytics – also support improving working capital performance. This is mainly because year-end lock-up levels have seen very little improvement; to overcome this, firms will need to sustain performance throughout the year rather than emphasising billing performance at the year-end.
The survey predicts firms will also be utilising extended funding and capital calls to improve working capital. Additionally, firms will be checking operating models for business support to build working capital across all service lines.
4. Strategy and Transformation
The survey allows us to conclude there are four key threats to law firms in the upcoming year. The first is macroeconomic volatility. Despite the pandemic in recent years, most firms reported they were still unprepared for the impact of Russia and Ukraine.
The second is cybersecurity, which has been a consistent trend throughout the shift towards digitalisation and AI. Firms report concerns about how to protect client data and information under GDPR when trialling new AI.
The third is cost inflation. Firms are unlikely to recuperate increased costs by simply increasing their chargeable hours or rates. Instead, potential solutions span improving client and account management, hiring rainmakers, and building up focused practice groups.
The fourth is a shortage of talent. To deal with this, 73% of the firms report they will be implementing commercial training. They also add that they will be making long-term investment decisions for recruitment and staff retention; in particular, they note the market seems to be shifting towards the contentious space.
In discussing transformation, up to 79% of firms report they recognise the positive impacts that AI can have on the legal sector. However, the level of implementation ranges across firms, with firms citing tech costs, GDPR concerns, and failed trials as some of the reasons why they are reluctant. In particular, we can note that for smaller firms focusing on growth (and even for larger firms focusing on increasing working capital), the pricing of AI can be quite unsustainable. However, as the industry shifts towards an overall transformation, we may see tech offerings become more widely available and cost-friendly, so the survey reports this is a space to watch.
We are delighted to share some exciting news from Fides Search! Four of our talented team members have been promoted to new roles, reflecting their hard work and dedication.
Please join us in congratulating them on their achievements!
Let’s see what Edward Parker our Managing Director had to say on the news:
George joined Fides just under a year ago and has been a tremendous asset since the get-go. His approach to onboarding new information, focus on outcomes for clients and ability to work across different international markets sets him apart. He has now been involved in projects across the UK, Ireland, Germany, and Luxemburg and has developed an exceptional level of understanding of complex markets like Funds and PE. I am delighted to see George progress into the Delivery team and look forward to working with him closely.
Gwendolyn joined us as a researcher and was promoted within 12 Months to Delivery Consultant. During that time I had the pleasure of working closely with Gwen on several successful high-profile searches, numerous Due Diligence exercises and several consultancy projects. It is exciting to see her reach yet another milestone and be promoted to the Consultant team. Gwen has developed exceptional market knowledge, knows the search process inside out and she is tremendous to work with. She is totally deserving of this promotion and I am delighted to be welcoming her into the consultant team.
Mathew joined Fides in July 2020, at that time the conditions were somewhat different to those that we have today. He developed his skillset in one of the toughest markets for search but still managed to achieve a great deal. He progressed very quickly up the consultant ranks and has outperformed even his own exceptionally high targets. Mat has had a focus on highly competitive areas like Digital, Data, TMT, Tech Transactions, PE etc, he has also worked across numerous jurisdictions including the UAE, Dublin, Germany and London. His commitment to clients and consultative approach help him to stand out in a busy market and clients regularly feedback on how impactful he has been. He also demonstrates the qualities of a leader and is someone who will go a very long way in this industry. I’m very excited to continue to work with Mat and to see him step into the role of Senior Consultant.
Inka joined us as Head of Research and Delivery and in so doing created a new function for us, prior to Inka’s arrival we’d never had a delivery function and her joining the business was a pivotal moment in training and developing talent a first for Fides. Inka’s approach to operational rigour and delivering the highest quality search to our clients has enabled us to become even more data-led outcomes-focused and to successfully manage a higher volume of searches. I’m delighted to see her step into the role of Associate Director where she’ll take on more leadership responsibility but more crucially keep supporting clients with their searches and leading a vital part of the business.
The merger between Allen and Overy and Shearman and Sterling has been voted in favour of.
As you may have heard, these two firms have been in discussions for some months, exploring the possibility of creating a global powerhouse in the legal industry. This comes after both firms failed to secure other merger deals with Hogan Lovells and O’Melveny respectively.
This is an exciting development and will fundamentally change the offering of a Magic Circle firm. The combined firm would have a strong presence in key markets, such as the US, Europe, Asia and the Middle East, and would offer a full range of services to clients across various sectors and practice areas. The merger would also create opportunities for our staff to work on high-profile and complex matters, as well as to collaborate with talented colleagues from different backgrounds and cultures.
As we wait to hear more about the synergies and client benefits of the merger, we would like to update you on some of the recent announcements. Namely, that the leadership team of the new firm is likely to include more Allen and Overy partners, with a limited number of places allocated to Shearman and Sterling. This reflects the relative size and profitability of the two firms, as well as the strategic vision of the merger. Allen and Overy have also been in the news for their collaboration with Harvey, an AI provider that helps lawyers automate tasks and improve efficiency.
We hope that this has given you some insight into the potential merger and its implications for our firm. We will keep you informed of any further developments as they arise. In the meantime, please do not hesitate to contact us if you have any questions or concerns.
Being an eighteen-year-old fresh out of A levels, and with limited real working experience, I found myself thinking that I had similarly limited options in how to approach the working world to fund my forthcoming gap year. As I have seen first-hand, young people in similar situations to mine tend to default to extensive hours of their summer, performing monotonous hospitality or retail roles. Yet now, time at legal head-hunters Fides Search has wholly challenged my preconceived belief of that being the best way forward. Despite some traditional student-suited jobs perhaps presenting pros in facilitating the continued laissez-faire attitudes of many school graduates, this article will explain why the former is exponentially outweighed by the possibilities presented by an early experience in executive search. While student-orientated jobs certainly allow for this more carefree transition into adulthood, with responsibility and commitment still relatively low, simply being aware of the plethora of options available within, around and moving on from executive search could be abundantly beneficial for a range of people in a variety of situations. Whether it be other students such as me with a keen eye on the legal sphere, those seeking to make their travels possible or young adults simply pursuing meaningful employment – employers such as Fides do provide unparalleled opportunities for personal and professional growth.
My own experience…
The industry: To fully appreciate the potential of an early career in legal executive search, it’s essential to understand the multifaceted nature of this industry. At its core, executive search involves identifying and recruiting top-tier talent for a diverse range of practices and positions, usually within law firms or in-house. It’s a field where success hinges on the ability to connect with people, understand their aspirations, and match them with opportunities that align with their skills and ambitions. Ultimately, this integrates a recruitment model with the legal world and thus demands those within the legal executive search to develop into founts of knowledge for various practices and the broader business dynamic of firms, partners, and associates.
What did I learn?
Alongside simply getting real-life experience working full-time for numerous months, my tenure at Fides taught me the criticality of a cohesive company – integrating different roles and providing different functions as efficiently as possible. I became well accustomed to the requirement for rapid responses and communication across the teams at Fides to reach this desired efficiency. Similarly, I had to quickly learn the right way to communicate with clients and candidates to instil the trust that is the foundation of Fides’ work and develop deeper relationships than the face-value headhunting process does. In turn, this showed me the importance of a network, as in particular the consultants at Fides that had developed an extensive professional network seamlessly navigated new and potential opportunities by being able to put the right people together. More specifically, I became increasingly comfortable with the legal and executive search worlds; the structures, goals, models, and dynamics that drive law firms forward and how that slot into recruitment – truly being able to understand what respective parties want.
How will this help my journey?
In terms of how this period of work will impact my future trajectory, it is important to consider both the short-term head-start that Fides has offered me in facilitating my travels (being able to get out and see the world before most of my peers) and also the longer term benefits I will have in a leg up into the wider corporate and specific legal spheres. My interest having already been piqued by law, the Fides experience has provided me with invaluable insight into the everyday working lives and communications of a lawyer, along with a deeper understanding of common aspirations and driving factors behind career decisions, potentially allowing me to pave my future way more in a more self-assured manner than those in similar shoes. Generally speaking, for my journey, I learnt that whilst there’s a plethora of professions which do provide short-term sanctuaries for those seeking to start new chapters travelling across the globe, there are just as many exceedingly more beneficial opportunities in industries like executive search offering long term leg ups into the legal and wider working world. Now as I look forward to new Asian-Pacific adventures and opportunities, I can look back at Fides fondly – knowing that at 18 I’ve already found a truly fulfilling profession on which my future self could choose to capitalise.
What can you glean from this experience?
From my early experience in the legal executive search industry, it’s clear that you can gain valuable insights and skills that can benefit you in various ways. Here’s what I’ve gleaned from my experience:
It’s a Multifaceted Industry: You can understand that the legal executive search industry is multifaceted and goes beyond just recruiting. It involves connecting with people, understanding their career aspirations, and aligning them with suitable opportunities. This knowledge can be applied to various industries, not just legal, as the skills of connecting people with opportunities are transferable.
Efficiency and Communication: My experience has highlighted the importance of efficiency and effective communication within a company. Learning to work cohesively with different teams and rapidly responding to clients and candidates are skills that are valuable in any workplace.
Building Trust and Relationships: In the executive search field, trust is paramount. I’ve learned the significance of building trust with clients and candidates, which is a crucial skill in any professional setting. Building and maintaining strong relationships can open doors and lead to future opportunities.
Networking: I’ve seen firsthand the power of having a professional network. Professionals in executive search often thrive because of their extensive networks. Networking is a valuable skill for personal and professional growth, as it can lead to opportunities and collaborations.
Understanding the Legal World: exposure to the legal world through this experience has given me a deeper understanding of the legal profession, its structures, goals, and dynamics. This knowledge can be beneficial if I decide to pursue a career in law or any field related to the legal industry.
Fulfilling Profession: I’ve discovered a fulfilling profession at a young age, which is a valuable insight. Many people spend years searching for a career that truly resonates with them. Knowing that I’ve found a profession I enjoy has provided a sense of purpose and direction in my future endeavours.
Overall, my early experience in the legal executive search industry has equipped me with a set of skills and knowledge that can benefit me in various career paths. It has also given me a head start in terms of understanding the legal and corporate worlds, which can be a valuable asset as I continue my journey.
In the upper echelons of the legal realm, the landscape of Big Law is undergoing seismic shifts, redefining traditional paradigms whilst casting new light on the roles and statuses of firms, partners, and junior lawyers. As the legal industry stands at the crossroads of innovation and tradition, it is imperative for respective stakeholders to comprehend the inception and direction of this change to ascertain its implications on their professional trajectories. It is no longer viable to be shackled to the outdated perspective of a disparity in quality between the ‘Magic’ and ‘Silver Circle’ firms against the rest; those that still are will ultimately begin to be left behind in the wake of this new global elite. This article will offer an insight into what dynamics have evolved and why, how the firms in question feel, and more importantly how this may impact you or your outlook on the Big Law landscape.
The Seeds of Transformation
The transformation of Big Law is rooted in a mesh of multifaceted dynamics, and it is crucial to recognise these to understand why the previously established pecking order is only going to continue disintegrating. Economic globalisation, advancements in technology, evolving client expectations, and the re-evaluation of work-life balance have collectively cultivated a climate of change. Traditional hierarchies are dissolving, replaced by a more agile, client-centric approach that prizes efficiency and adaptability. A defining attribute of the emerging global elite is their astute amalgamation of legal expertise with technological acumen. This shift underscores a transformation in the very nature of legal practice – one that recognizes the symbiotic relationship between legal proficiency and technological innovation. The historical dominance of ‘Magic Circle’ and ‘Silver Circle’ firms stemmed from their strong foothold in financial centres like London, heralding a legacy of top-tier legal services entrenched in tradition and excellence. However, alongside embracing transformative technology, the new global elite firms are not bound by the confines of a single geographic epicentre. They are strategically positioned across key global hubs, allowing them to leverage diverse perspectives, tap into burgeoning markets, and serve clients with a holistic, international approach. Indeed, the Financial Newsreported the likes of Freshfields’ senior partner Georgia Dawson trying to move on from the ‘magic circle’ label, stating that it was “not entirely appropriate” considering their aspirations to become a “truly global firm.” This combination of geographical agility and technological progressiveness has proven to be a catalyst in the global elite’s rise to prominence and the forward-looking large firms’ sustainability, enabling them to attract a diverse and widespread clientele transcending borders and industries. It is the firms that have recognised and acted upon these dynamics that are continuously eroding both the traditional pedigree of a ‘Magic’ or ‘Silver Circle’ title and their best talent.
Partners – Adapting to a New Landscape
The transformation of the big law landscape carries profound implications for partners across the spectrum of large to midsize firms. For partners within larger firms and traditional circles, this shift necessitates a recalibration of their practice and client engagement strategies as the competitive arena expands globally. They face the dual challenge of sustaining their firm’s reputation while embracing innovation to meet the evolving expectations of clients. In contrast, partners in midsize firms find themselves at a pivotal crossroads, with the opportunity to leverage their agility and niche expertise to compete with the new global elite on specialised fronts. For partners respectively, smaller boutiques fostering focussed expertise increasingly offer an attractive alternative to careers at midsize firms and potentially pave the way for later success within the new global elite. The transformation signifies a legal marketplace that rewards adaptability, expertise, and a client-focused approach, compelling partners from large to midsize firms to navigate this evolving terrain with strategic acumen and a steadfast commitment to delivering unparalleled legal services. Often at a higher charge-out rate, with less price-sensitive clientele.
For Partners it is increasingly pertinent to be aware of:
Increased Competition in the Midmarket: As clients seek more cost-effective and specialised legal services, partners in traditional firms may face increased competition from boutique and agile firms that are able to offer niche expertise and competitive pricing. To remain relevant, partners may adapt by diversifying their skills and service offerings.
Globalisation: The new global elite firms are often more geographically dispersed, providing partners with the opportunity to collaborate on a global scale. This expansion can lead to access to new markets and clients, but it also requires partners to navigate complex cross-border legal issues.
Technology: The legal industry is being transformed by technology, from AI-powered research tools to blockchain-based smart contracts. Partners must embrace these technological advancements to enhance efficiency, reduce costs, and meet client demands for innovation.
A Client-Centric Approach: Clients are increasingly seeking value-added services, including proactive legal advice and strategic thinking. Partners must shift from a transactional approach to a more client-centric one, understanding the broader business context of their clients’ needs.
The Next Generation – What does it mean for Junior/Trainee Lawyers?
The evolving legal pecking order, veering away from the traditional ‘Magic’ and ‘Silver Circle’ firms toward the emerging global elite, brings forth a distinct set of considerations for trainee and junior lawyers across these larger and midsize firms alike. For trainees and junior lawyers in larger firms, the paradigm shift translates into a heightened need for versatility and adaptability. As global practices expand, they may have the opportunity to gain international exposure, navigate complex cross-border matters and develop a broader skill set. However, the competitive environment also demands that they demonstrate a proactive approach to innovation and open lucrative doors for aspiring partners across the legal sphere possessing sought-after niches and technological proficiency. Despite this, the demand for associates and the new generation of partners to maintain high thresholds of work is not overshadowed by their adaptability, it must be the focus for these young lawyers to combine a rapid malleability with a traditionally diligent work ethic.
The key takeaways for aspiring lawyers are:
Specialisation: The new global elite firms often emphasise specialisation and niche expertise. Junior or trainee lawyers may find it beneficial to develop deep knowledge in specific areas of law to stand out in a competitive job market with a headline offering.
Technological Proficiency: Aspiring lawyers must be tech-savvy, as technology is increasingly integrated into legal practice. Proficiency in legal tech tools and the ability to adapt to new technologies, such as AI in particular, will be essential for success.
A Global Perspective: The globalisation of law firms means that junior lawyers may have the opportunity to work on international matters from the outset of their careers. This provides valuable experience but also requires further adaptability and cultural sensitivity, whilst those with multijurisdictional and multilingual capabilities become increasingly sought after.
The Firms Themselves – A Quest for Sustainability
The transition away from the traditional dominance of ‘Magic’ and ‘Silver Circle’ firms towards the emergence of the new global elite presents a pivotal challenge for firms across the spectrum of Big Law. For the well-established ‘Magic’ and ‘Silver Circle’ firms and their larger counterparts, the quest for sustainability amid this transformation involves a dual mandate. Firstly, it requires a fundamental re-evaluation of their business models. Firms must adapt to changing client demands by fostering a culture of innovation, integrating advanced technologies, and enhancing operational efficiency. Secondly, these firms must prioritise the retention of top-tier talent, ensuring that they can continue to attract and retain legal professionals capable of providing exceptional services to a global clientele. In contrast, midsize firms find themselves at a juncture ripe with potential. Their relatively nimble structure allows them to pivot swiftly and respond to market opportunities with agility. To secure further growth and maintain competitiveness, midsize firms often focus on niche expertise and client-centric approaches. This enables them to provide specialised services that cater to the evolving needs of their clients, potentially carving out distinctive positions in the market.
Meanwhile, the new global elite firms are characterised by a rapid expansion strategy, aiming to establish a robust presence across international jurisdictions and offer a broader spectrum of services. Their quest for growth requires astute merger and acquisition strategies, effective integration of diverse teams, and the cultivation of an inclusive global culture; whilst also maintaining the most lucrative financial offerings and very strong lateral partner retention strategies. In this dynamic environment, firms, irrespective of their size or legacy, must embrace the evolving expectations of clients and the transformative forces of technology. By fostering innovative thinking, enhancing client relationships, and adapting their operational structures to the new global legal landscape, they can pursue sustainability and growth while navigating the profound shifts in the industry. Considering this it may be unsurprising that ex-Slaughter and May lawyer Charlie Harvey described the ‘Magic Circle’ title as having “somewhat lost its sheen” as the notion that global elites are now seeing the true prosperity grow. The challenge lies not just in maintaining traditional prestige but also in demonstrating a readiness to inclusively evolve and thrive in an increasingly competitive and client-driven market and in light of this firms should consider:
Adaptability: Traditional firms must adapt to the changing legal landscape or risk becoming stagnant. This may involve rethinking business models, embracing technology, and fostering a culture of innovation – in addition to seeking ever-increasing client centricity as demands for transparency and efficiency are reshaping the legal market. Firms that prioritise a client-centric approach and invest in client relationships will thrive.
Talent Retention: To compete in the global market, firms must attract and retain top legal talent. This requires offering competitive compensation, professional development opportunities, and a supportive work environment that values diversity and inclusion. This diversity piece simultaneously appeals to a breadth of both talent and clientele alike, whilst also modernising traditional outlooks. The talent retention strategies of today can be seen as marking a 10–15-year paradigm shift in the way that elite law firms reward their partners, as many have moved to a more meritocratic reward system, in turn providing an environment for similarly elite partners to maximise their income potential. Underscoring the stickiness of Big Law’s top talent, today’s firms must rigorously compete for these high-profile partners, perhaps meaning revitalised reward structures and a lucrative medium for premier legal powerhouses.
Strategic Alliances: Many firms are continuing to form strategic alliances or mergers to strengthen their global presence and offer a wider range of services, providing the new global elite an effective route to continue their explosive rise to prominence. A recent agreement between international firm Eversheds Sutherland LLP, and Asian heavyweight King & Wood Mallesons is exemplary of this, intricately combining the Asian-Pacific prowess of KWM with the EMEA excellence of Eversheds Sutherland. Whilst not a complete merger, indeed the motive behind this is “driven by a shared commitment by both firms to provide the best client service” according to Eversheds, typifying the potential of strategic alliances as the new agreement sets the precedent for record years respectively.
In conclusion, the eclipse of the ‘Magic Circle’ and ‘Silver Circle’ firms’ traditional supremacy symbolises the transformative dynamism sweeping through the legal industry. The rise of the new global elite reflects a profound shift in the archetype of legal excellence—one that mirrors the intricate interplay of globalisation, technology, and inclusivity. While the ‘Magic Circle’ and ‘Silver Circle’ firms will always remain integral to the historical fabric of the legal world, the emergence of the new global elite attests to the enduring power of innovation and adaptation in shaping the legal landscape of the future. Partners, junior lawyers, and firms themselves must adapt to remain competitive and relevant in this dynamic environment. While the challenges are significant, so too are the opportunities for those who embrace change, innovation, and a commitment to meeting the evolving needs of clients in a globalised world. Nonetheless, we must consider that with so many firms on the cusp or competing to be classed as a ‘global elite’, not everybody can be, leaving us with the poignant question to be answered over the coming decade, Who are the new global elite?
Ultimately it depends on your criteria, and to me there seem to be three; The raw profit powerhouses that are truly elite and global such as Latham & Watkins; The traditional elite, who are global but lack the powerful US profitability, for example, Slaughter & May, A&O; And the new wave of modern, fully global firms with extensive reach and diverse legal acumen in the likes of Eversheds and DLA. Whatever your outlook on the criteria may be, it will certainly become clear over the coming years as those seeking to cement themselves in this competitive club become similarly globalised, whilst perhaps not all maintaining similarly elite.
The rapid advancement of technology in recent years has given rise to a new era marked by the prominence of Artificial Intelligence (AI). This transformative technology has infiltrated every facet of modern life, promising unparalleled efficiency, innovation, and convenience. However, as AI continues to revolutionize industries, it has also brought forth a critical concern: its environmental impact. While AI offers immense potential to address environmental challenges, it simultaneously raises questions about its own carbon footprint and broader ecological consequences. This article delves into the multifaceted environmental impact of AI, exploring its positive contributions, its energy consumption, electronic waste generation, and potential mitigation strategies.
AI’s Positive Environmental Contributions
Contrary to initial apprehensions, AI has shown remarkable promise in contributing positively to environmental sustainability. One of its most significant roles lies in optimizing resource allocation and energy consumption. In fields like smart grid management, AI algorithms analyse real-time data to optimize energy distribution, leading to reduced wastage and more efficient power consumption. Moreover, AI-driven precision agriculture aids in optimal irrigation, pesticide use, and crop management, minimizing environmental impacts associated with excessive resource utilization.
AI also plays a pivotal role in environmental monitoring and conservation. Advanced AI-based algorithms analyse satellite images and sensor data to track deforestation, pollution levels, and wildlife movements. These insights facilitate timely interventions and informed decision-making, aiding in the preservation of biodiversity and ecosystems.
Energy Consumption and Carbon Footprint
While AI’s potential for positive environmental impact is undeniable, concerns regarding its energy consumption and subsequent carbon footprint loom large. Deep learning, a subset of AI, involves training models on massive datasets through iterative processes, requiring substantial computational power. As a result, data centres housing these computations consume vast amounts of energy, primarily derived from fossil fuels. A 2019 study published in the journal Science estimated that training a single AI model could emit as much carbon as five cars during their lifetimes.
The proliferation of AI-powered devices, such as smart assistants and autonomous vehicles, further contributes to energy consumption. These devices rely on constant data processing and communication with cloud servers, demanding continuous energy supply. As AI applications continue to expand, so does the energy consumption associated with their operations.
Electronic Waste Generation
In addition to energy consumption, AI’s environmental impact extends to electronic waste generation. The rapid pace of technological advancement leads to the swift obsolescence of AI hardware. As newer, more efficient models are developed, older hardware becomes outdated and discarded, contributing to the mounting electronic waste crisis.
The components used in AI hardware, such as GPUs (Graphics Processing Units) and specialized chips, often contain rare and precious metals that are resource-intensive to extract and refine. Improper disposal of these components not only results in the loss of valuable resources but also poses potential environmental hazards due to the leaching of hazardous materials into soil and water.
Efforts to address the environmental impact of AI are gaining traction on multiple fronts. One approach involves the development of energy-efficient AI algorithms and hardware. Researchers are actively working to optimize algorithms to require fewer computational resources for training and inference. Moreover, innovations in hardware design, such as more power-efficient chips and cooling systems, are aimed at reducing energy consumption in data centres.
Another strategy revolves around the utilisation of renewable energy sources for powering AI operations. Tech giants like Google and Microsoft have committed to transitioning their data centres to rely on renewable energy, mitigating the carbon footprint of AI computations. Additionally, edge computing—a paradigm where AI computations occur on local devices rather than distant data centres—can reduce energy consumption and data transfer requirements.
Regulations and policies also play a crucial role in mitigating AI’s environmental impact. Governments and international organizations can impose standards for energy efficiency and responsible disposal of AI hardware. Encouraging the adoption of circular economy principles, which emphasize recycling and reusing electronic components, can significantly reduce electronic waste generation.
Furthermore, fostering research and development in AI for environmental sustainability can yield innovative solutions. AI can be harnessed to optimize renewable energy systems, enhance waste management processes, and develop more sustainable transportation networks. By channelling AI’s capabilities toward addressing environmental challenges, a symbiotic relationship between technology and ecology can be established.
The environmental impact of AI is a complex interplay of its potential for positive contributions and its energy consumption, electronic waste generation, and associated carbon footprint. While AI holds promise in revolutionizing industries and addressing pressing environmental issues, it also demands careful consideration of its ecological consequences. The integration of energy-efficient algorithms, sustainable hardware design, renewable energy sources, and responsible policies are essential steps in minimizing AI’s negative environmental impact.
As the world grapples with the challenges of the 21st century, the responsible development and deployment of AI offer a unique opportunity to forge a more sustainable and harmonious relationship between technological advancement and the environment. By embracing innovative solutions and adopting a holistic approach, society can harness the power of AI to create a future that is both technologically advanced and environmentally resilient.
Since the UK voted to leave the EU in 2016, many international law firms have been seeking new outposts in order to maintain their access to the EU market. Among the most popular destinations for firms looking to retain that access is Dublin, Ireland. Post-Brexit restrictions have made it more difficult for UK-based lawyers to practice EU law from outside the EU, so Dublin’s status as not only a significant financial centre and a thriving domestic market, but also as an EU ticket- holder, has made it a very attractive destination for firms. Alongside a wider look at the Dublin landscape for law firms, this article will take a deeper look at the Investment Funds industry and how it has proved to be a new market entrant area of choice, and why it has been a hive of activity since the Brexit decision was made.
First, let us take a look at the primary reason for the rising popularity of Ireland as a jurisdiction of choice: Brexit. Law Gazette reported that in the six months leading up to the Brexit vote on 23rd June 2016, 186 solicitors from the UK had been admitted to practice in Ireland. This number amounted to more than three times the total at the same stage in 2015. A year later, 1,448 England and Wales solicitors have been admitted; a number that had swelled so significantly it prompted Ken Murphy, director general of the Law Society of Ireland at the time, to reference the “tsunami” of registrations they were receiving as “Brexit refugee solicitors”. Christina Blacklaws, former president of the Law Society of England and Wales explained the incoming registrations as a move on the part of law firms to do everything they can to “ensure they continue to meet their clients’ needs seamlessly when we leave the EU”.
Three years later, the Law Society of Ireland announced that dual-qualified lawyers must be physically based in or practising in Ireland to keep their practising certificates. This put a major spanner in the works for law firms who were hoping to continue advising clients on EU law with the benefit of legal professional privilege: they now had to open an office to enjoy the benefits of Irish qualification.
Shrewdly, various leading international law firms had already made the move to Ireland. Firms such as Pinsent Masons, Simmons & Simmons, Covington & Burling, Clyde & Co., DLA Piper and Fieldfisher had proactively moved to reap the benefits of the EU connection, as well as to build on their own international platforms. Only recently in 2022, Browne Jacobson chose Dublin as the destination for its first overseas office, highlighting its continued desirability. Back in 2017, however, Pinsent Masons and Simmons & Simmons both decided to launch with investment funds as a core aspect of their new offerings. Despite the Irish market being highly saturated with well-established domestic firms such as Arthur Cox, Dillon Eustace, Maples Group, Matheson and McCann FitzGerald, who already have bases in Dublin, the funds area was seen to have growing potential. This can be attributed to Ireland’s status as a leading hub for the investment funds industry across Europe, where the AUM (Assets Under Managements) figures continue to grow year on year. It remains one of the most popular locations for establishing fund structures in Europe, with over €6.6 trillion in assets under management reported by PwC at the turn of 2022.
Why Investment Funds?
This leads us onto the more technical aspects of why Dublin is a great place to do business; Ireland has become a pre-eminent global location for establishing and administering investment funds particularly due to its favourable regulatory environment, pro-business environment, and tax benefits. As an EU member state, funds established in Ireland as an Undertakings for Collective Investment in Transferrable Securities (UCITS) or an Alternative Investment Fund (AIF) benefit from an EU-wide passporting regime, and the country has an excellent reputation for robust and efficient regulation, with a proven track record in adapting to industry developments. Additionally, Ireland is an internationally recognised, open, and tax-efficient jurisdiction with a 12.5% corporate tax rate – which is significantly lower than the 25% figure the UK has (it rose from 19% on April 1st 2023) – and a favourable tax regime for funds or investors. While it is difficult to directly compare the UK and Ireland in this regard as the tax rules are complex, vary depending on a range of factors, and ultimately go beyond the scope of this article, we can be certain that Ireland has actively pushed to make itself a strong domicile of choice for investors. The CIB (Central Bank of Ireland) has developed a comprehensive legal and regulatory framework that is purposefully attractive to fund managers and investors alike. In recent years, Ireland has been decidedly proactive in introducing new legislation and regulatory initiatives designed to support the growth of the investment funds industry. For example, the Irish Collective Asset-management Vehicle (ICAV) was introduced in 2015 to provide a more flexible and tax-efficient structure for investment funds, while the country’s Investment Limited Partnership (ILP) regime was recently updated to make it more attractive to investors. So ultimately, while the market may have been handed a Brexit boost, it was more than ready to accommodate an influx of business; it’s popularity as a fund domicile of choice has been earned, with Irish luck playing only a very small role.
Jostling for space
Dublin is fast becoming ‘London by the Liffey’, writes Irish Times reporter Mary Carolan. And frankly, it is hard to argue with that title given that UK or international firms now make up seven of the top 20 firms in Ireland, with half of the top 30 UK law firms having now opened offices in Dublin. Of the more recent office openings chronologically, Linklaters, Ashurst, Hogan Lovells, Taylor Wessing, Addleshaw Goddard and Bird & Bird have opened offices in Ireland, with Squire Patton Boggs due to touch down shortly in May 2023. Notably, Addleshaw Goddard entered the market via a merger with local firm Eugene F. Collins, completing what is believed to be the largest ever merger between a UK-based legal business and an independent Irish practice. Carolan reports that this has had a directly adverse effect on regional firms who, according to a recent survey, have experienced a slowdown in growth. Of the 108 law firm respondents surveyed between September and October 2022, almost all respondents – and especially the larger firms located in Dublin – have pointed to recruitment and retention of staff as a major concern. One of the difficulties they face is retaining newly qualified solicitors who are attracted by the “eye-watering” six-figure salaries offered by firms based in London, alongside better prospects and access to working in an international law firm environment. About 50 partners in Irish firms joined UK and other international firms in the past five years, including the foremost market entrants Simmons and Simmons and Pinsent Masons, who led the way by poaching Fionan Breathnach, Head of Investment Funds, and funds partner Gayle Bowen from Mason Hayes Curran and Walkers, respectively.
It is worth noting that amidst the concerns of losing staff to international firms due to higher salaries, William Fry, an Irish law firm with offices in London, New York, and San Francisco, has successfully lured back one of its own consultants, Niall Campbell, from Pinsent Masons to work on business-critical matters in its flagship office. This shows that the brain drain from domestic firms to international ones may not be as one-way as it seems, and suggests that Irish firms still have competitive advantages to offer. At the same time, it shows how important a resource these international platforms are to Irish-based lawyers. There is no better place to hone your skills as a legal professional than in the biggest rooms at the biggest tables. Firms like Pinsent Masons, Simmons & Simmons, Eversheds Sutherland and the multitude of other international firms who now have a base in Dublin provide local lawyers with the perfect opportunity to elevate their own practices, advancing their own careers but hiring the standard across the board.
As a result of the influx of eager law firms into a fertile Irish market, the competitive ‘war for talent’ we have seen in the UK over the recent years has affected Ireland in an even more concentrated way. With the increased competition, law firms are continuing to use lateral hires as part of their growth strategies. The survey conducted by the Irish Times found that just over 70% of the firms surveyed have made more than five lateral hires in the past 12 months. It is worth noting that there has been significant growth in in-house legal and compliance teams as they seek to re-domicile in Ireland. We have also seen Irish expats returning home for better prospects.
As a direct result of the vast swelling of NQ salaries driven by this higher competition and thus higher demand for lawyers, a number of international firms with offices in Dublin are set to launch, or expand, the number of training contracts available. This is a move The Lawyer has referred to as “Phase Two of the international invasion. First, they came for your partners and associates…Now, they’re coming for the most promising graduate talent.”
In doing so, the firms are strategically going straight to source with the aim of pushing their organic growth and stepping away from the current melee that is talent acquisition. Both Bird & Bird and Taylor Wessing have affirmed their intentions to introduce training contracts into their Dublin offices. The firms that are already providing training contracts, such as Fieldfisher & Addleshaw Goddard, have opted to boost the number of contracts they offer each year. Fieldfisher Dublin’s managing partner, JP McDowell, stated that “recruiting and training new talent is an essential component of our strategy to facilitate our ambitious growth plans in Ireland.” Among international law firms in Dublin, DLA Piper is rumoured to offer the highest number of training contracts, with a maximum of 12 openings per year. It will be incredibly interesting to see how this unfolds as the year plays out.
It is clear that Ireland’s popularity with law firms in the post-Brexit era has remained strong. The ongoing push to open an office in Dublin, the appeal as a fund domicile of choice, and the second wave recruitment drive from firms looking to expand their training contract offerings are clear examples of this. The legal market in Ireland will certainly continue to grow and transform as international firms keep up the push to move in and fight for their market share of work. Going forward, it will be interesting to see how local firms respond to the external pressure, which will only increase from here on out.
Fides Search has supported a number of firms with their growth in Dublin. Please contact George Eves and Mathew Parker for more information.
Following our Ukraine Initiative, we have always endeavoured to share information about the Ukraine war and the human consequences of its occurrence. The Ukraine Initiative was a way for us to support Ukrainian lawyers, following the idea that if we could help even just one Ukrainian lawyer who had been displaced by the war get settled in the UK and help them find suitable employment, then that could provide an entire family with a degree of stability. Since March, we have connected with hundreds of wonderful Ukrainian lawyers, and we have been working with many top law firms and companies who have shown initiative in their compassion to hire these individuals.
The idea for this Q&A originated from Iryna Kravtsova a Ukrainian lawyer that we placed back in November at Stephenson Harwood. She approached us with the intention of sharing her experience so that others could learn from it. Here we share her point of view and her story, as well as Dan Holland’s, a commercial lawyer and Iryna’s manager at Stephenson Harwood, experience of hiring and working alongside her.
Interview with Iryna Kravtsova –
– What challenges did you initially face when coming to the UK and how did you come about the opportunity where you are now employed?
When the war started, I shared a post on LinkedIn explaining how my life was before the war and how it was now; I described how the war had affected my life and dramatically changed my life goals. In the post was a picture of the basement in which my parents and I were currently living.
To my surprise, the LinkedIn community expressed genuine solidarity in response to my post and I received hundreds of messages. My post appeared to resonate and changed people’s opinions and attitudes towards their own lives. Some people wrote that they realised their life was not so bad after all, and that their working conditions were actually fine, while others said that the post made them want to spend more time with their families or take more holidays to enjoy life. I’m happy if my post changed just one person’s attitude towards life and pleased that this message – quality of life is not just about material and financial gain, but also about our attitudes towards life – resonated.
Alongside these messages, I also received messages from people asking how they could help; one of these was from Edward Parker, Director at Fides Search. Following a call, Edward asked for my CV and explained that he would send it to some of the UK law firms and companies that he was working with. While I was confident in my professional skills and experience, I didn’t have much hope that anything would come from this, but I thought why not; it was a new challenge.
It’s a common perception that UK-based companies are not interested in Ukrainian lawyers, even if they have an established professional background. The only exception is an intragroup relocation – when a multinational company gives in-house lawyers the chance to work at different jurisdictions within the organisation. Nevertheless, I decided to share my CV with companies in the UK, as it was not only about new professional challenges, but also survival. When I had the conversation with Ed, I was in Poland with my parents. Going back home to Ukraine, where I would have to stay under missile attacks – without electricity, water, and heating – was not an option for me.
Stephenson Harwood was one of the firms that responded to Ed. The firm was interested in my CV and professional experience. I interviewed with two partners, Dan Holland and Naomi Leach, while I was still in Poland. The interview went so well that it didn’t even feel like an interview, rather a supportive conversation. After several interviews, and a series of background checks, they offered me a 6-month contract as a legal analyst in the transactional support team in the corporate finance and private equity practice. It was a surprise when Ed called me back with the news. Although the role was a level below the one, I had in Ukraine, I decided to take it. This was mainly because my Ukraine qualifications were not valid in the UK, so the position of legal analyst was one I could do without being registered as a foreign lawyer.
However, I did hesitate, at first, in accepting the offer, due to the short-term contract, and being far away from my family and alone in a foreign country. On the one hand, I would have safety and stability for the next 6 months, but uncertainty about what will happen after that. My family and friends helped me make a final decision, and I feel their enormous love and support. I am able to stay in touch with my family, who are in Ukraine, with the help of technology, except when there is no mobile or internet connection caused by damage to Ukraine’s internet and telecommunications infrastructure. In terms of my contract, I’m convinced that it is partly my responsibility to show the best of my professional skills and get a permanent position.
I arrived in the UK on 1 November. The challenges I faced throughout the process and coming to England were mainly bureaucratic – obtaining the visa and the relevant background checks – because refugees don’t have local qualifications or papers. This took some time and delayed my arrival in the UK.
– What challenges did you face when you first started your current job? What challenges did you think you were going to have to face but ultimately did not arise?
I think the second question is more relevant to me. There were a lot of things that I was worried about at the beginning that weren’t issues at all. I didn’t worry much about professional challenges, as I’m very open to everything that develops my hard and soft skills. If you do not improve and challenge yourself, you will be stuck. My main worries were about the language barrier, social environment and whether I would be accepted in the UK. I’m very happy that my worries were in vain. All colleagues at Stephenson Harwood are very friendly and willing to help, and the team I currently work with are a dream team. Eventually, I got acquainted with people with whom I could go out for a coffee and have a friendly chat. The language also turned out not to be a problem as it was just a matter of time getting to understand the different accents. In the end, a lot of the challenges that I thought I was going to face turned out to be temporary difficulties that could be overcome.
In terms of other challenges, I’d outline two issues: 1) it is a difficult and expensive procedure obtaining a skilled worker visa; 2) UK employers’ rules on employee checks are an inflexible process for non-EU citizens. For example, there are documents that must be provided to an employer before employment commences, however, these documents do not exist in Ukraine. I have also heard about situations when Ukrainians were refused a job, even after they signed a contract, as the criminal record certificate couldn’t be obtained because the Ukrainian state registers were closed due to the war.”
– Do you believe that there is significant stigma around hiring refugees? Preconceptions about their skills, about their background especially in terms of risk management? And why?
Yes, I do believe this. There is this idea that people from third world countries are not, or cannot be, highly professional or a specialist, and that their education is worth less than a qualification obtained in a first world country – such as the UK, EU, or the US. I believe that all too often they are not seen as being as capable as everyone else, with equivalent skills and knowledge. There is also a stereotype that if people come from certain countries, they can do only certain types of work.
Refugees are often treated as people who can only do blue-collar jobs. This is very unfair, and many employers take advantage of the refugees’ situation, adopting a “take it or leave it” attitude. Many highly qualified refugees, who used to work as doctors, teachers, or office staff, are offered work in the fields or factories. The paradox is that when the refugees refuse this kind of work and keep looking for a job to match their qualifications, we often hear feedback that these refugees came to do nothing except get social payments from the hosting country.
– What advice would you give to employers who may be looking to hire a refugee?
Firstly, and most importantly, employers should not be afraid of giving refugees a chance. For example, in my case, I was offered a 6-month contract. This provides an employer with some time to determine whether I am the right fit for the company, can do the work, and have the sufficient qualifications to conduct and fulfil the workload expected of me. It also allows me to figure out whether I can handle the work and whether the opportunity is right for me, and, if not, it’s a period where I get to demonstrate my skills and experience. The conversation about a permanent contract can follow afterwards, but that initial step can be invaluable.
The employer should also try and treat refugees fairly and not take advantages of their status. Nowadays, we hear a lot discussed about gender, religion, disability, and ethnicity, but there is little discussion when it comes to refugees, specifically refugees’ work rights. That’s why many refugees often end up with work that doesn’t correspond to their professional experience or qualification, and this can often lead to them earning less than they deserve.”
– What advice would you give to individuals who are currently in a similar position to you?
“Believe in yourself and never give up. That is not only applicable to refugees, but to everyone. If you knock on nine doors, and they are all closed, then maybe the tenth is the one for you – and one that is the best fit and the opportunity you have been waiting for.
More specifically for refugees, don’t be afraid to make the first step, send your CV, talk to people, or ask questions. If you do nothing, how can you achieve something? If you’re afraid to fail, then you might miss the right change in your life. Failing is not equal to losing, and it’s up to you how you treat unsuccessful steps: whether you accept it as a good lesson, or a failure.
Don’t be afraid of the language barriers or not being good enough for a certain job. It’s in part about convincing yourself that you are skilled and good enough. Even if you go for an interview and don’t get it, you’re gaining experience, getting feedback, and drawing your own conclusion about where to go from there. You might need to take additional training to strengthen a particular skillset, or improve your English, but if you don’t make that first step you will never know what it takes to get that job or position.
Set goals. Communicate with people and don’t be shy to tell them what you want. Be ready and open to learning something new and expanding your knowledge.
Transform your inner fears and barriers into new challenges. Always remember that there are only a few situations in life where you can’t find a way out: those are death and an incurable disease, the rest are timely difficulties that you can overcome.
Interview with Dan Holland –
What initial concerns did you have, if any, about hiring a Ukrainian refugee?
“At Stephenson Harwood, we welcome the brightest and the best – whatever their circumstances. When Fides Search contacted us regarding their Ukraine initiative – connecting lawyers in Ukraine with potential law firm hosts in the UK so they can find suitable employment – we were very keen to work with them.
Our work with refugees actually predates the Ukraine crisis. Since 2021, Stephenson Harwood has partnered with Breaking Barriers, a UK charity that helps refugees to rebuild their lives through education, training, and employment, and we’re always looking for ways to provide more substantive help in this area.”
Taking into consideration the usual steps when hiring talent, what were the major differences or difficulties with this process?
“The recruitment process for this role was similar to others in terms of finding an individual who had excellent experience and expertise, and someone who would be a good fit for the team. That said, the process took longer than usual – almost 6 months in total; this was due to a range of practical issues such as waiting for the relevant visa to be issued.”
Do you believe that there is significant stigma around hiring refugees? Preconceptions about their skills, about their background especially in terms of risk management? And why?
“We believe that hiring refugees presents a huge opportunity for our firm, and for any business. Many refugees are highly skilled, talented and experienced, and have often developed enormous resilience and adaptability. We can learn so much from them, while providing a secure, stable, professional environment in which they can continue, and further develop, their careers.
Diversity of thought and experience adds breadth and depth to our teams and our service offering – it means we more naturally approach legal challenges with a range of perspectives, and are better able to give holistic advice, firmly set in the real world. [This applies whether we’re talking about gender, age, educational background, socio-economic upbringing, ethnicity, disability, neurodiversity, or anything else.]”
Was the onboarding any different with Iryna?
“As mentioned above, we had to navigate practical issues such as the visa, but the actual onboarding process remained the same to our usual one. We pride ourselves in offering a flexible, adaptable working environment, which was a great fit with Iryna as she looks to continue her studies; it means that we’ve been able to offer her employment, while also supporting her ongoing academic pursuits.”
What would be the advice you would give to other firms looking to hire a refugee?
“Bringing diverse minds and backgrounds into any business has obvious and tangible benefits. Organisations who pursue this shouldn’t see it as a charitable endeavour: your business, your people and your clients will get just as much from it as your new employee will.
Practically, it is important to remember that working cultures in different countries vary, and so employers need to be accommodating in terms of integrating them into the workplace and providing the support they need.”
These interviews were a pleasure to conduct. The points of views shared by both Iryna, and Dan make a stand about demonstrating humanity in times of need, a genuine show of human support beyond an economical gain. We hope this article provides insight to individuals who are in Iryna’s position or to law firms who are looking to venture into hiring refugees. This crisis is ongoing and unfortunately there appears to be no immediate end in sight. We are still running our Ukraine Initiative and working with many lawyers who are looking to settle in the UK and continue their legal careers. We are always seeking to involve more law firms in this initiative in order to continue offering jobs to the Ukrainian lawyers who continue reach out to us every week.
The global legal market is in the process of changing in the face of recent and emerging developments. Cost pressures, regulatory changes, the challenges of scale and global footprint, advances in technology, and the expectations of a new generation of lawyers entering the profession are causing a shift in the market.
How leadership teams respond, devise, and implement a smart and timely response to these forces over the next few years will determine who will emerge as winners. Which furthers the question of how law firms and in-house legal teams will position themselves to take advantage of the opportunities that lie ahead despite the challenges – most notably when it comes to attracting and retaining talent?
A combination of the pandemic, Brexit and other more widespread factors have led to skills shortages and talent gaps across different industries. One knock-on effect of this has been greater competitiveness among employers for top potential recruits. This has led to an increasingly candidate driven market where said candidates have begun to expect a different modus operandi from before. Post-pandemic, attracting top talent isn’t just about offering the highest remuneration as candidates are also looking for the right working patterns and flexible working hours with around ½ of legal professionals with 10+ years’ experience now expressing wanting to work remotely at least 2-3 days per week.
Nonetheless, this highly competitive market shows no signs of slowing down. A new national survey from MHA has revealed that 85% of UK law firms are planning to increase staff numbers in 2022. Another recent survey by the Association of Corporate Counsel also found that 32% of in-house general counsels’ plan to recruit more lawyers to their in-house legal department. These circumstances have led to a robust war for talent taking place between private practice and in-house as they try and attract top performers to their teams.
On the frontline is the question of competitive salaries. Salaries were already trending upwards in previous years. In private practice in 2021, the base salary of an NQ in an upper quartile UK law firm ranged between £85k-£105k up from between £82k-£95k in 2020. The pace of change has only markedly increased in 2022 where we’ve seen international firms paying NQ lawyers a base salary of up to £120k. This is further reflected at all levels of seniority within private practice salaries. On the other hand, when it comes to junior in-house talent, base salaries start around £60k-£80k in London, rising to around £110k-£180k for senior legal talent.
With this information taken into consideration, given all the money on offer within private practice, why would a newly qualified – or in fact a lawyer at any level, consider the in-house legal market. However, despite it, we are still seeing a current trend of employees at UK law firms switching sides and going in-house.
This is because whilst there is a lot of money on offer in private practice, many still transition from private practice to in-house for greater job security, flexibility, work-life balance, and better promotion opportunities. The legal in-house function in recent years has evolved. Companies have changed since the pandemic, with many increasing the size of their legal teams and giving in-house lawyers greater influence—reflecting a more fluid and changing global landscape. Businesses are seeing the advancement of technology, bringing with it new legal responsibilities, so an in-house lawyer can help companies navigate the legal landscape quickly and with ease. In turbulent times it’s important that people can turn to in-house lawyers as trusted advisers, to help them navigate the uncertainties of the next few years and give them some assurance. With the global situation being fast-moving, having an existing legal function that understands the business, its clients and stakeholders is proving more essential than ever. In-house legal functions have been increasingly redrawing the line between what needs to be outsourced and what can be performed within the legal function. Many private practice lawyers express that the hands-on nature of the in-house market is a key factor for why they want to make the move across. The ability to start and finish a project, rather than just advising on one aspect of it, as well as working alongside the business to achieve commercial aims, plays a key factor in decision making. Whilst the salaries may not be as large as in the private practice, the benefits of joining an in-house organization can far outweigh just the salary on offer.
While this all seems very positive for the in-house market there is a rebalancing on the horizon. There is still the salient topic of income, although in-house teams start to pay more for lawyers with three to seven years’ experience, after that, the differential starts to swing the other way and begins to stagnate. All the while equity partners in top law firms are earning incomes that far exceed their peers in in-house roles, save for a few GCs of major listed companies.
Furthermore, in-house lawyers are now getting busier, with pressure for them to do more – on the other side of the fence, many law firms are rethinking the workload of graduates and early career lawyers to make them more sustainable. They have also stepped up their programs focused on employee mental health and wellbeing and increasingly dedicating time to the question of diversity & inclusion.
Either way, if trends persist, the employee value proposition of in-house may become less compelling. With increasing demand, in-house teams have started to build their capacity by hiring more graduates and investing in early career legal and commercial training. However, this may be good news for law firms; after years of training young talent only to lose them to in-house roles, the shoe may comfortably fit on the other foot. In recent years, we have noticed a marked increase in the number of lawyers moving back to private practice after several years in-house, as well a steady flow of legal professionals flooding into other legal functions such as compliance and risk. Furthermore, although, in-house lawyers are increasingly being paid through long term incentive plans or rewarded through share schemes in order to compensate for the competitiveness of salaries in private practice, it remains to be seen whether in-house roles will ever truly be able to compete financially with private practice.
It is important to remember that in these uncertain times, change is inevitable to accommodate a world in flux. As the power play gets settled out between the private practice and in-house sectors, the status quo remains that both are looking to hire, and both boast pros and cons that may suit different individuals at different point in their career – just as it has always been. Nonetheless, the war for talent rages on and the future of the industry may no longer be a hierarchy with private practice at the top as both sides set out to become as attractive as possible for prospective talent.
Written by Imogen Scott, Researcher
We are pleased to announce that Shirin Stanley is re-joining Fides as an independent consultant.
Shirin enjoys nearly 20 years’ experience of Search and Selection across Legal and Financial Services.
Her geographic coverage spans Europe, Middle East and Asia.
She previously established the Middle Eastern offering for a leading search firm in the UAE.
She is seasoned in relation to both private practice and in-house where her focus has ranged across transactional, contentious and regulatory practices. Her experience includes strategic partner hires as well as placing product lawyers, GCs and Regional Leads within the Buy and Sell-Side Financial and Investor community.
She was previously a Director of Fides Search in Dubai and London.
Ed Parker, Director said:
“Shirin is among the more experienced female consultants in our market. I am absolutely thrilled to welcome her back into the team. We envisage that Shirin will help the strengthen our European coverage in markets such as Paris and Brussels where French language skills are rapidly becoming a prerequisite. She will be a significant addition to our initiative to help promote diversity and inclusion amongst our clients and on behalf of our candidates. Shirin spent almost five years working in the Middle East which remains a key market for Fides Search. We now look forward to redoubling our efforts in the region.”
“I am excited to rejoin Fides Search, a brand I was instrumental in founding and which has evolved considerably over its lifespan nearly a decade ago. Ed has succeeded in building a team around him which is cohesive and diverse in its skillset and personalities. I relish the prospect of collaborating with individual team members across an array of geographies and practice areas.”