The Brexit Effect
Just over 5 months has elapsed since the EU referendum on 23rd June, and we are still no closer to knowing exactly what is going to happen. With the recent High Court ruling that parliament must vote on whether the UK can start the process of leaving the EU, this is going to run and run, and it’s conceivable that by the end of the decade we still might not have left. So what does all this mean for the recruitment market and legal recruitment in particular? The only certainty is uncertainty, beyond that predictions are based on speculation and little more. It was widely predicted that the stock market would crash, yet the reverse happened. Disappointingly the expected ensuing slow-down in legal recruitment did materialise and, with only a few exceptions, we are now experiencing a static market. However it is important to note that a substantial level of recruitment took place in 2014 and 2015 so regardless of Brexit the market was beginning to slow a little anyway.
Some roles which were active at the time of the referendum were subsequently withdrawn or put on hold, and many have not returned. Furthermore we have witnessed half as many new jobs coming to the market than this time last year and about a third less candidates looking for a new job. Also many overseas candidates are now thinking twice about relocating to London, or at the very least are narrowing the firms they will consider because of the exchange rate.
However, there is still movement – new positions are coming on to the market and being filled. We have seen new positions in most areas but perhaps slightly more in financial regulatory, specialist financial areas, IT / Commercial, and Private Wealth. Litigation roles exist but not in the quantity we might have expected. Non fee earning roles (such as PSLs and Risk & Compliance lawyers) are still arising, which is in marked contrast to the global downturn of 2008/09. However, most roles are replacement rather than expansion so growth across the legal sector is limited.
As for what to expect in 2017, the world will still turn within the economic and political vacuum we find ourselves, so we expect recruitment to continue albeit at a slower rate than in previous years. The major positive in all of this is that profitability levels in the Top 100 UK law firms remain high so we are hopeful that recruitment levels will increase.