The pandemic has had a profound impact on our lives, it has triggered deep emotions, fears of an uncertain future, fears around the potential health implications, fear to meet, greet and interact in a way that seemed so normal only 6 months ago. Many are working from home, many are still in work, many are out of work. There is no level playing field to how the pandemic has impacted us other than being absolutely certain that it has impacted us on a number of levels.
Leaders are conscious of the risks to their business, but so are employees, leaders are concerned about the health and wellbeing of their employees, but so are employees, we have all raised our conscious understanding of the new found risk that we now live with on a daily basis. Wellbeing remains my primary concern, it is no small thing, expecting people to completely upend their daily habits and adjust to a new way of working for an unknown period of time. Well-being is so important that if organisations do not prioritise wellbeing they may not recover from the pandemic. A leader of a global law firm said to me that this is a health crisis, but the real crisis will hit if we cannot prioritise the wellbeing of our employees. I really took that to heart.
Now we are embarking on a return to normality, children back in the classroom, many office workers returning to work, the easing of social restrictions and mixed emotions!
What have we been seeing?
There are too many variables to provide a comprehensive answer, we work with domestic and international corporates, domestic and international law firms and we work across multiple jurisdictions. The honest answer is that we have seen such a variety of reactions to the pandemic that the most accurate statement is that the impact is not a level playing field.
Let’s look at the financial performance of law firms, the Magic Circle have been resilient, as have UK firms such as Mishcon De Reya, international firms such as Eversheds Sutherland have produced solid results. The lawyer has the top 20 UK firms (by revenue) having all increased their revenue. Of the top 20, 10 achieved revenue growth of over 5%, interestingly 6 of the top 20 also achieved PEP growth, a further 4 do not disclose their PEP figures but all achieved between 4.5% and 11% revenue growth as such you would expect that PEP has moved in a positive direction. Given the unprecedented nature of the lockdown this points to resilience across the largest employers within the law firm market.
Yet our in-house clients have not all fared as well, some of the major financial institutions have reported poor financial performance, sectors such as hospitality, leisure, travel, retail have been decimated by the domestic and international restrictions imposed by governments. Equally if we look at sectors such as technology the pandemic has had less of an impact, in fact across many businesses we have seen mass adoption of their products/solutions. What does need to be said though is that the government stimulus and the retention schemes have had a profoundly positive impact. Never before have we witnessed such rapid and comprehensive stimulus. This perhaps points to the severity of the situation.
On balance we have found that work in Europe has remained ‘steady’. In particular the Netherlands, Germany, Switzerland, Sweden, Norway and Dublin have been and continue to be competitive markets for legal and compliance talent. We have found clients to be consistent in their attitudes towards growth, we have also seen new relationships emerge on the continent that look promising, where they have bold and forward looking leadership teams and appetite for strategic growth.
What is the impact on hiring?
Some clients have pulled out of hiring processes – this includes both strategic and what we would call ‘nice to have’ additions. Some of those processes made sense to pull out of, many you would argue were driven by the perception that a business unable to pay its existing employees their full wage ought not to be expanding. This is a sentiment worth sharing as it points to the response of leaders prioritising their existing employee’s wellbeing. We have seen new processes emerge and indeed hiring in areas that strengthened as a direct result of the pandemics impact, I won’t name them all, but labour law, insolvency & restructuring, corporate lending and litigation are front and centre. We have seen fewer in-house roles at the senior/leadership level, but we noticed a drop off in Q1 hiring amongst our in-house client base prior to the Pandemic. Issues such as the US vs China trade war, unrest in HK, the US presidential elections and Brexit were regularly sited as reasons for reduced hiring activity by clients.
Never before have we received as many in-house and compliance candidates or recommendations of candidates. This is driven by two main themes a fear that their business may not be future proof, or they have unfortunately been ‘let go’. The terms of those being asked to leave are a mixed bag, some are favourable but we have equally been astonished by the brutality with which some organisations have treated their people in particular those that have been with the organisation for a short period of time. This is not localised to legal and compliance but is consistent with what we have been told by colleagues across a range of sectors. We are being contact by some truly exceptional candidates the likes of which you as a consultant cannot fathom how they would end up in this position, then the inbox pings and another comes through. These are truly strange times.
As an organisation our thoughts have naturally switched towards trying to help people, this could be providing a connection or introduction, helping them with their CV (something that they may not even have updated for 10 years), counselling them on the fact that this will change and that markets will improve. We have to be honest that GOOD QUALITY individuals may be on the market for some time, possibly a few months, possibly 6, this doesn’t however detract from their calibre and we should all look at such individuals as if we are looking into a mirror, they are just unfortunate to have been in the right place but at the wrong time.
Our approach is relatively simple, firstly let’s look at technology, our phone systems are VOIP, for those that don’t use a VOIP system, I would urge you to look into it, you can take the phone anywhere on the planet, you can even use it through your laptop, you just need a connection to the internet. It has enabled us, from one day to the next, ‘plug and play’ and stay connected over the. We use Microsoft Teams, there are many good providers out there, but I would say teams is easy to use. The features have made us more efficient and better organised; it is easy to connect with your team and for presentations the screen sharing is just ideal. Our clients use different tools so we have all of the commonly used apps installed on our smart phone devices (Blue Jeans, Zoom, Ring etc) that means we can easily jump between platforms and use whatever our clients or candidates prefer.
We travel regularly and we have traditionally preferred to meet people in person (and still do). The pandemic has not just meant that there are new rules around social distancing, what venues can be open and the kind of travel that is permitted. There are additional variables to manage such as airlines cancelling or changing flights which can impact on the efficiency of a trip and there is a risk that travel would need to be cancelled at short notice should travel restrictions be imposed. Although this is an inconvenience for us, we are more concerned that it could reflect on our clients if we were to schedule meetings only to cancel at short notice. Often, we are approaching candidates on behalf of our clients but acting as an extension of their business as such that first interaction is key and we have chosen for now to continue to maintain the status quo and pause on international travel.
What about meetings? Well for starters connecting with people starts with a smile and a handshake. We can still offer the smile but behind a mask and a without a handshake. A part of our reading of people, putting people at ease, establishing rapport comes from the basic nuances around meetings. There is also a level of professionalism that goes into those meetings that tells candidates and clients they are working with individuals that conduct themselves in a professional manner. The pandemic has without a doubt impacted on this greatly.
Why do we meet people, the better question is why wouldn’t you meet people? It is very simple, you are giving that person your time, they are doing the same, the desire to be ‘in that room’ means that the interaction is likely to be a good one. You may be meeting for many different reasons but for most, meeting people new and known is a really pleasant experience. On a practical level though our business model depends on this. We met with clients to better understand their business, the culture, their strategy, and most of all them as an individual. We meet with candidates to promote our clients, the opportunity that we are presenting and to assess their fit and propriety. On both sides of the spectrum there is a level of relationship development that lasts, you do not ‘burn through markets’ you establish lasting contacts and simply put prior to March 2020 we were not accustomed to doing this without face to face meetings.
We have had to learnt!!
As mentioned, the technology was there, we just were not using it. March 2020 presented an opportunity to revolutionise how we operate. I am not saying that we will never go back to doing face to face meetings but we now have more options, we can connect in a targeted way with candidates and clients through a new medium and the key thing is just as we have adjusted so have they. It is now possible for us to have a quality meeting with a client in Dubai, an hour later (on the dot) a meeting in Germany, followed by a succession of conversations in London. The benefit of virtual meeting room facilities is that your diary becomes more functional, you can better plan meetings, no longer does a 5-10 minute delay create a bead of sweat. Many of you reading this will have spoken to us from an airport or in a taxi, whilst on the train home or whilst in ‘transit’ between meetings. That was a feature of the world we lived in and I am not saying it is a bad thing to be connected wherever and whenever, but I have to say the quality of those conversations is at best as good as what you are able to have from home. Yes, I accept that the kids running in or factoring home schooling makes things difficult at times but the time gain from not traveling or commuting and not transitioning between meetings is huge!
Peoples availability has improved. Without a doubt it has helped the search and selection industry that people are not in their offices. Now that might alarm some leaders but trust me when I say, if you do your jobs right people will not be leaving in droves and you have nothing to fear. That said it is a real benefit to running a search process that you can connect with candidates without a long lead time. By being able to access candidates whilst at home they convers in a more open fashion, they have fewer distractions (accepting my previous comment about the kiddies bombing the call), there is no ‘let me dive into a meeting room’ or a whisper of ‘we are open plan’. Candidates are also as interested as our clients are in hearing about the market, what is going on, what are we seeing, using us to information gather! This is no bad thing and I think it is one of the absolute pleasures of our role and function that we are asked our opinion, it gives you a huge sense of mutual respect.
Candidate availability has materially improved the pace at which we can turn around the initial screening of potentially suitable candidates but how are candidates behaving?
Caution has creeped into the market in a way that I have not seen before. There is a level of scepticism around candidates looking to move at this point in time. I personally feel that will lead institutions to miss out on some tremendous talent! Everyone has a different reason for looking to make a move you have to understand the candidate, their motivations and make an informed judgment. Candidates themselves are also cautious, wouldn’t you be? Giving up a coveted position, taking a risk on a new employer at this time. Simply put our job has become more complicated, there are more dynamics at play and creating a scenario where there is an expectation match between the candidate and client has got a lot harder. Trust me when I say that this is where your search partners will come to the fore.
Now more than ever is the time where search consultants can add tremendous value to a recruitment process. Our position between the client and candidate means that we can look for those subtle triggers, triggers that enable us to read between the lines and understand the actual thinking, client and candidate side. We are running numerous processes as such that insight gained from working across a number of clients is valuable context to both the candidate and client during an unprecedented time. As such we have tried to make ourselves as ‘available’ as possible to speak to people about ‘the market’. Personally, this is one of the things that I have really enjoyed about the pandemic, spending time discussing the market and exchange views.
A challenge for us and our industry was:
‘Will a law firm be able to hire an equity partner without them having set foot in the building’.
The short answer is yes of course but be informed. We have now completed a modest number of lateral processes on that basis, so it is possible, but is it ideal and are there risks?
There are always risks in the lateral partner market, we need to acknowledge that both clients and candidates alike need to improve their due diligence. We have seen a significant increase in demand for due diligence services and that will continue. Our clients looking to complete lateral partner processes are increasingly relying on a later stage external due diligence exercises to help stress test the validity of their hires. This is a positive and will grow further through good experiences, we hope that in time this will establish itself as a key ingredient in any successful search process.
What do we look for in a Due Diligence process?
Our Due Diligence function is client focused and provides an analytical and thorough assessment of their potential lateral investment. We believe it is ultimately a leadership tool and provides our clients with a greater level of certainty. We do not seek to block hires, quite the opposite we aim to fully explore the reality of the partner or team, their financial performance, credentials and fit. We also reflect our findings into recommendations that will allow for the successful integration and onboarding of a lateral partner or team.
Shouldn’t the sponsoring partners carry out their own due diligence?
Yes, in short! Partners are good at conducting their own enquiries, but they become invested in the process and outcome focused. Sponsoring partners are trusted by the executive leading a firm, who in turn oversee 10, 15, 20 or more lateral hires. A big challenge is often that the sponsoring partner and the candidate are the two most invested parties in a lateral hire. Good external diligence at this time should not be undervalued.
This Is A Time To Reflect
The pandemic has caused many to pause, to reflect on what is right and wrong and to look deep inside. A client said to me that ‘it is almost impossible not to revaluate things in a time like this’. I actually really value this impact, people should look inside and evaluate their position more, I mean this on every level but naturally the emphasis is on the role and working dynamics.
We have also learnt to emphasise more with our partners and colleagues and we have collectively raised the bar in terms of our understanding of others personal situation. We think more about our personal situation and the sacrifices we make; we have been forced to look more at the circumstances of our partner and our colleagues, line managers and team members and our clients and service providers as well. We have been able to say, ‘this is my situation, can we do this at that time because I have to do this’. People have become more tolerant and understanding. We make more of an effort to communicate with each other at Fides Search, we are no longer like ships passing in the night roaming between meetings, we make ourselves available to speak to each other and we better understand the environment we are each in. Our culture has actually grown through this, for the better.
We should really look at this through a much more focused lens, lets stereotype for a moment. Diversity and Inclusion remains a challenging subject, frankly, is there any excuse not to encourage home working yet alone facilitate home working. If it enables high calibre people to do their job well whilst not compromising or making difficult their living dynamic, then surly the pandemic has been the proof some needed.
Let us be very clear though, any employer not considering the virtues of home working right now is not likely to be an employer or certainly not in a leadership position for long. Yes we thrive on connectivity but let’s be more bespoke! Let us actually provide a work environment that maximises output whilst also accepting individuals can work well from a range of different locations including the kitchen table, bedroom, living room, garden, garage, basement or office. It is all possible, what is key is trusting your people to do a good job and creating an inclusive environment. We do need to make sure however that for new talent entering into the business at all levels that they benefit from being part of a connected, integrated and collaborative work environment and many leaders have flagged this as a concern moving forward. Allen and Over have reacted to this in a fantastic way, if you haven’t watched it already, definitely watch this piece by Karen Seward https://www.thelawyer.com/allen-overy-karen-seward-litigation-video/.
Update on Fides Search
As a business we have seen this time as an opportunity to invest in people, we have two fantastic new additions to the team Mathew who is specialising in TMT and takes the lead on privacy and cyber security and Chris who is our Head of IP and Patents. We hope to continue to strengthen the team and attract likeminded client focused consultants into the Fides family. We have also just secured a new lease on some fantastic office space, whilst we will retain our meeting rooms on 60 Gresham Street, we are moving the office location to Curtain Road which is just North of Liverpool Street and across from Old Street, we felt that the area mirrored our dynamic culture and that it would physically align ourselves between our legal, financial services technology sector clients. We officially open the office from 1 October and look forward to hosting you there in due course!!
What does the future hold?
The key thing for us all to understand is that despite the current upheaval things will change, the pandemic resulted in governments taking drastic steps to save lives and stop the spread of Covid-19 but the tide will turn and we will come through this challenging period. In our world clients continue to think about the future shape of their business, this will create the need for hires, we will see some consolidation and as is often the case, mergers, potentially a collapse maybe more than one, we will also see some success stories. People will find a way, businesses will find a way, families will find a way but let’s continue to embrace technology and new ways of doing things, lets enjoy the fact that we are in this together, working through unprecedented times.
One thing is for sure we will not forget the Covid-19 pandemic and it will leave a lasting imprint on our minds and our behaviours, but hopefully for the better.
Lastly I want to thank the conditions that Covid-19 created for teaching me what is important, for giving me more time with my family, there is no greater gift and if I didn’t realise it before I certainly do now. My 9 year old Max, 5 year old Annabelle and 2 year old Lillian have kept my spirits up and made sure that despite the monotony of lockdown that no day was without laughter and sunshine and my wife Charlotte for being all that she is and more. What a time to be alive.
Thanks for reading and stay well!