From a shifting picture of demand for legal firms’ services to the post-pandemic shakedown, Totum recruitment consultants Tim Skipper and Laura McNair tell People in Law Journalist Adam McCulloch where the legal sector is at, from their perspective, eight months into the Covid crisis.

This piece was first published by People in Law.

The experience of law firms underlines how Covid-19’s economic damage has not fallen across sectors equally. Law firms may not have joined logistics and online retail at the top of the coronavirus boom list, but they certainly haven’t suffered as much as some had expected.

Recruitment specialist Tim Skipper, director of Totum, is in a perfect position to gauge trends in the sector. There’s an air of surprise about his words when he says “over the past six to eight weeks we’ve seen a marked increase in the number of placements. Many were roles that were delayed but are now going ahead.”

He adds that earlier in the crisis law firms had been thinking that they would face deficits of 20% against budget. Yet many of them have come in on, and even ahead of, budget. These tend to be the larger firms with sizeable departments covering a broad range of practice areas. “Litigation, competition, employment and restructuring are busy,” says Skipper, adding that, “More transactional areas such as corporate and M&A are less well utilised.”

He suggests that this could cause some friction at firms where salary cuts have been implemented across the board – leaving those in higher performing practice groups feeling disgruntled. “We are starting to hear about firms where their competitors are approaching people in busy areas such as litigation and offering sizeable salary increases for them to move,” he says.

Growth in demand

Consultant Laura McNair adds that Totum has seen a growth in demand from legal firms for transformation and innovation-type roles, while demand for finance roles has remained constant. Business-critical roles are still being recruited and the senior end of the market has remained relatively buoyant.

And in a sign that the legal sector continues to modernise despite the pandemic, some firms are looking to fill newly created, modern roles which, if history repeats itself, are likely to become the norm. Skipper says: “We’ve seen a global law firm enter the market looking for a director of sustainability. I find it exciting to see roles coming into the market focused on such pertinent and business critical issues that are responsive to clients who expect to see a modern progressive approach.”

The same goes for progress in diversity and inclusion (D&I). McNair says: “Diversity is a huge area. Black Lives Matter has had a very positive impact on renewing and enhancing firms’ focus on their diversity policies, with the determination to make a tangible difference in this area. Before this period some firms had more of a tick box attitude to it.”

The penny has dropped

McNair says Totum is currently working with a client’s chief people officer on a placement in which the main priority is to get the right person in to head up all diversity in the firm and really make proper headway. “The penny has finally dropped across the sector that proper focus and investment needs to be given to this critically important area – in the past three weeks alone, we have had three new roles go live with a focus on D&I,” she adds.

Heads of recruitment want two years’ worth of data on where you get people from, including information on the schools and universities they attend. “As a result, they’ve been able to identify and remove barriers – and stop favouring certain schools and institutions,” she says.

At one law firm she knows recruiters analysed “the ones who got away” who had been turned down then went on to succeed elsewhere. This ability to analyse previous data had even led them to identify certain interviewers who, by not identifying individuals’ strengths and potential, were effectively acting as a barrier, either consciously or unconsciously.”

She adds that candidates themselves are adding pressure for change: “In considering their next employer many candidates now have a completely different mindset … they are asking ‘what are your D&I policies?’, ‘what are your wellbeing policies?’. Law firms are having to change as they are held to account.”

Skipper concurs, adding that recruiters too are subject to the same scrutiny by candidates and clients: “We’re being held to account too now, which is entirely right.”

While many consequences of the pandemic may have been predictable – working from home, offices being relinquished, the struggles of hospitality and leisure operators – accurately forecasting economic nuances within sectors has been difficult. Because of the unexpectedly robust finances of many firms, there hasn’t yet been the kind of structural consolidation within the sector that Skipper had anticipated.

Merger hiatus

“There haven’t yet been any significant mergers announced. But we’re talking to one firm that wants to grow – it’s already quite a large firm that is looking to double its size over the next five years.” This, he says, will be achieved through a combination of mergers, acquisitions, bolt-ons and lateral hires.

Skipper thinks that talent-spotters may be beginning to look out for stressed firms, “where the equilibrium has been upset by this period”, to pick off teams, partners, lateral partners, departments and offices.

He suggests: “Next year we’ll perhaps see a lot of that, particularly in the mid-market where there are firms with multiple offices, where profitability might be lower. The angst caused by the pandemic has created a situation where some firms previously keen to remain independent might be open to merger talks.” He adds: “Next year will be very interesting.”

There are still some areas where law firms are not changing fast enough, say Skipper and McNair. Firms can struggle to think creatively in recruitment, for example, losing out on potentially transformative talent because the traditional partnership model still leads to conservative decision-making. “We had a brilliant candidate for one leadership role recently – he was expressive, persuasive and charismatic.” But despite telling Totum how much they liked the candidate, the firm turned down the candidate in favour of someone who was perceived to have a ‘safer’ legal background.

Deeper questions

In one recent sign of progress, a magic circle law firm has, for the first time ever, appointed a female senior partner as Georgia Dawson was elected into the role at Freshfields Bruckhaus Deringer. Skipper says “It’s amazing, wonderful” but both he and McNair feel the significance of the event risks being exaggerated.

After all, Lesley MacDonagh, the first female managing partner of a top 10 City firm (Lovell White Durrant – the UK predecessor of Hogan Lovells) was appointed back in 1995. For McNair, Dawson’s appointment is the cue for deeper questions about leadership roles and gender. Women (and increasingly men too) will continue to face the question of whether they actually want to take on such responsibilities and ‘have it all’.

However, when it comes to removing barriers and allowing diverse individuals to make their own decisions about what they want from their careers, it’s certainly the case that Totum is playing its part in enabling the modernisation and professionalisation that the legal sector so patently requires.

Click here to view the piece as it originally appeared at People in Law