London law firms slump in hiring as market slows down
Key findings include:
- Legal sector dips 34.8% in London and 19.4% regionally
- Real Estate remains the leading skill in demand, despite a 37% drop YOY
- Media sees the sharpest fall by sector, down 56.7%
- Irwin Mitchell proved to be one to watch, with vacancies up 38.7%
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At a time when the sector has been depressed by the cyclical downturn due to quantitative tightening, this has led to a drop of 34.8% in London and 19.4% regionally. Within law firms, real estate remains the top skill in demand, although its market share has slipped from 22% in 2022 to 18% in 2023. This is partly due to a hefty 37% fall in vacancies in this area in 2023 as the commercial property sector has slowed down. This is according to the latest UK labour market trends report by leading professional recruiter Search and market data analysts Vacancysoft.
James Franklin – Director – Search comments:
“Whilst 2023 saw the impact of quantitative tightening on the sector, the signs are positive looking forward, with that, as interest rates fall and corporate finance gears up, we anticipate a busy year for both the Law Firms and the Banks.”
Technology and Media sees sharpest falls in hiring for Lawyers
We see a similar trend when looking at in-house, with vacancies down 29.4%. Analyzing by industry, the most significant sectors worth profiling are Banking and Technology, which have seen 45% and 54% falls respectively. The trend for lower vacancies in Banking and Technology is not unique to in-house lawyer roles. Media as well has seen the sharpest fall, down 56.7%. Within the Banks, the cause is clear, in that the slowdown in corporate finance has meant that the demand for lawyers to facilitate contracts and deal-making has fallen significantly.
Despite falls, 2023 mirrors 2019 recruitment levels
Nonetheless, purely looking at the year-on-year change can be deceptive. With that in mind, it is worth noting that vacancies in 2023 in both practice and in-house were broadly consistent with the levels seen in 2019, the last year before the pandemic.
James Chaplin – Chief Executive – Vacancysoft comments:
“The tidal nature of the economy can be seen when looking at the legal sector. Nonetheless, there are also structural changes happening, as ‘Northshoring’ becomes embedded. Indeed we now see 25% more legal vacancies in firms in the North than we did pre-pandemic, whilst London has remained static.”
Magic Circle slows down as National firms scale up
Finally, when analysing which firms have been the most active this past year, it is interesting to see that not one of the magic circle feature in the top ten, which is testament to the slowdown in corporate finance. Instead, the list is dominated by second tier firms, with DAC Beachcroft leading the way, with 175 vacancies last year. Nonetheless, that was still a drop of 16.3% on 2022. Of the top ten recruiting firms, Irwin Mitchell recorded the largest increase, with vacancies up 38.4% on 2022. Addleshaw Goddard is also worth mentioning, as one of the few firms to increase their recruitment in 2023, with vacancies up 25%, this at a time when they have also been expanding internationally, with new offices now in Berlin.
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