The Impact of the Brexit Referendum on the Legal Recruitment Market
As is very apparent from the increasing amount of media coverage over recent weeks and months, 23rd June 2016 will see the UK go to the polls to vote in a referendum of historic significance for our ongoing relationship with the rest of Europe. With a month to go until the vote, it’s become clear that the uncertainty created by the possibility of a “Leave” vote, and the effect that might have on the UK economy, has had a direct impact on recruitment. From Mark Carney to Nigel Farage, from Barack Obama to Michael Gove, from Christine Lagarde to Big Bad Boris, the great and the good of politics and finance have been queuing up to try to convince the British public that their arguments, whether for or against, are compelling. It is incontrovertible that the prevailing view of the majority in and around the City, is in favour of “Remain”. However, the vote itself is that much more difficult to call, with political commentators examining the various demographics across the country, which groups are or aren’t more likely to cast their vote at all, and so on. Hence, the uncertainty.
The effect on recruitment has, in our experience, been variable. Within the private practice (law firm) market, the most noticeable slowdown in recruitment has, unsurprisingly, been seen in the UK firms, and those firms whose predominant business and major clients is/are Europe-based. Conversely, many of the US law firms with offices in London are continuing to recruit at expected volumes, demonstrating that their transactional work is truly global, and accordingly less susceptible to whatever the potential effects might be on the UK and EU economies of a vote to leave.
Within the in-house legal market, there is similarly a noticeable dichotomy. The banking and financial services market has definitely been impacted, most noticeably within the largest international banks. There are a variety of other macro-economic factors that are compounding the situation for the banks (the slowing of the Chinese economy, sliding oil/commodity prices, and the seemingly never-ending avalanche of regulation descending on them, to name a few). Nonetheless, Brexit-related uncertainty is clearly affecting trading and investment decisions, which of course directly impact the banks. However, the commerce & industry market has shown no real sign of slowing at all; we are continuing to receive a high level of instructions from companies across all sectors within that market, particularly those within the tech media sectors, and from US companies looking to get a foothold in the European market with their first legal hire. These companies are experiencing such an unprecedented surge in corporate activity that they appear to be relatively impervious to potential market fluctuations in the event of a vote to leave.
Having outlined the broad impact of the uncertainty surrounding the vote, there is nonetheless a significant body of opinion that the highly likely result is that we vote to stay in the EU. This can be seen anecdotally, with many lawyers both in private practice and in-house commenting that we should be preparing for an unusually busy second half of the year. Indeed, running counter to the general softening of the market outlined above, some law firms are taking a confident view and recruiting now, ahead of anticipated requirements later in the year, with a view to getting ahead of the game during the lull in the market. For the associates, some are simply enjoying being able to leave the office in time to see some of the evening!
Whatever your views for and against, clearly most in the world of business will welcome at the very least a resolution to the question of in or out come the end of June, leaving the summer to contemplate the question of President Clinton….or President Trump?