Now that we’ve collectively lived through the most unpredictable year in modern history, despite still facing strict restrictions – the London legal market is once again booming!
While law firms turn to growth strategies and succession planning to keep up with demand, as legal recruiters, we are unbelievably busy with lateral hiring up double-digits compared to the same period last year.
The market is busier than ever, with Corporate M&A, Disputes and Private Equity proving increasingly popular with firms in London.
So, what happened in the first quarter of 2021?
Firstly, the Lawyer’s City 50, which measures the London revenues of both US and UK-headquartered firms, saw in the year with bumper revenues of £10.6 billion, up from £10.1bn in 2019 and £9.5bn in the previous year.
Following this in Q1 of 2021 and London has continued to nail multiple blockbuster hires as firms fight to secure talent. US firms have pursued an aggressive laterals strategy which has seen them poach some of London’s best talent with the promise of top salaries.
According to data collected on Pirical, Q1 in 2021 saw a 10% increase in Partner moves when compared to Q4 in 2020. There has also been a steady increase in total moves across all levels, as highlighted in the graph below.
After the uncertainty surrounding our 2020, we expected to see a high number of trainees qualifying without being retained or hired elsewhere. Fortunately, this wasn’t the case. Retention rates overall have remained high as most trainees remained with their principal training firm.
Read more on retention rates and options for NQ lawyers in London here.
Firms have been able to increase NQ salaries and even award Associates with special spring bonuses. For instance, Milbank, Skadden, Paul Hastings and Goodwin Procter join a growing number of US law firms awarding their London associates with bonuses of up to $64,000 (£46,500) in recognition of their endeavours throughout the coronavirus pandemic.
As legal recruiters, we have experienced a gradual increase in demand for M&A and Disputes lawyers over the last six months, and especially in Q1 of 2021. This trend is reflected in the data of projected moves across London and highlighted in the graphs below.
What are the main factors driving the market?
The covid-19 vaccine
The UK’s vaccine rollout has proved seamless, placing the city in a much stronger position and bringing increased confidence to the market. According to the Lloyds Bank Business Barometer the coronavirus vaccine breakthrough saw the UK’s business confidence climb to a nine-month high.
With the lockdown restrictions creating a wealth of issues in the business world – demand in the areas of insolvency, restructuring and contracts has increased.
Brexit
Brexit is finally complete and has, in turn, presented the legal world with many new areas to assist U.K. companies in 2021.
Bloomberg’s 2020 report of London’s decline as a financial centre after Brexit could have been greatly exaggerated. In fact, initial public offerings in the U.K. are firmly on course for a record first quarter, even before any intervention from regulators.
Deal opportunities deferred from last year to this year
When the pandemic first struck the UK back in March 2020, many deals were deferred while firms and businesses navigated new restrictions. Now the dust has settled, these deals are back in play and aiding revenue increases.
Dealmakers are ‘deal ready’ when working remotely
Firms quickly found that staff could comfortably work from home and teams could integrate and communicate with technology. Now all the appropriate processes are in place, deals can be facilitated promptly and efficiently.
It has been remarkable to see how such a regulated profession has adapted so well and implemented radical changes that have allowed them to not only survive but thrive in our new world.
Stimulus packages introduced and extended
The UK government put numerous policies in place to help see businesses through exceptional circumstances in 2020. Many of these tax cuts, grants and loans have been extended into 2021 to provide businesses with increased security.
The residential property market soared in the second half of 2020 with sales in October up 52% on the previous year due to the tax break exempting Stamp Duty on the first £500k ending March 31st 2021. With influence also from lifestyle changes due to the pandemic, house prices in London rose by 8.5% last year.
Moves in Commercial Real Estate increased by 75% in the last 4 months of 2020, when compared to 4 months prior. (Pirical)
Moving forward, we remain incredibly positive. Law firms are in great shape to meet their clients’ evolving needs, and as the city slowly starts to come back to life, we look forward the economy bouncing back so lawyers can once again enjoy the thrill of city life.
If you have any questions, or would like a detailed breakdown on the market in London, don’t hesitate to reach out info@sonderconsultsnts.com
“The best way to predict the future is to create it”
– A Lincoln
