Q2: What are the in-house legal recruitment market trends?

July 9, 2024

The interim legal recruitment market

Despite a slower start in Q1, Q2 saw rapid growth of the interim market. With many General Counsel experiencing restrictions in growth of their permanent headcount, the interim and consulting market has seen a further rise in popularity for both clients and interestingly, many more lawyers in permanent positions are considering a switch to this career path.

We have particularly seen a rise in long-term maternity cover instructions in financial markets and asset management, plus an increase in opportunities with start-ups hiring fractional General Counsel, providing an exciting option for senior consultants.

Corporate and commercial

The UK general election and global economic uncertainty continue to affect the in-house corporate and commercial market, particularly at the senior end, although there are some positive signs that H2 will be stronger.

Q1 this year saw the first signs that the technology sector is recovering after reduced hiring at all levels in 2023 and this continues with another rise in vacancies in Q2 2024, hopefully signalling a return to investment in the sector.

The most significant reduction in hiring has been in the media industry which has seen almost 50% decrease from this time last year. In good news, the leisure and gaming sector has experienced significant growth with instructions increasing from 8% of Taylor Root’s portfolio in Q2 2023 to 14% in Q2 2024. The retail, FMCG and not for profit markets have remained stable with little variation in terms of volume of instructions. The industry side of the in-house market remains steady, particularly across pharmaceutical, services and energy.

The highest demand from our clients continues to be for strong commercial lawyers around 3-6PQE level although we have seen the return of NQ-2PQE demand, with many clients finding it easier to source talent at this level due to budget constraints. Salaries have stabilised but there remains a knock-on effect from law firm salary increases, particularly at the junior and mid level of the in-house market.

In Q2 2024, the UK legal market for banking and financial services remained cautiously optimistic amidst regulatory shifts, technological advancements, and economic and political uncertainties. Fintech, insurance, and asset management are key sectors driving demand, with the most notable growth being in the fintech sector in Q2. We have also noticed increased demand within the family office and pensions sectors.

  • Fintech: This has been our most prominent sector, driven by innovations in digital payments, blockchain and decentralised finance. Regulatory scrutiny from the FCA has intensified, increasing the need for in-house legal expertise. Fintech vacancies accounted for 21% in Q2 2024, up significantly from Q1 and comparable to Q2 2023.
  • Insurance: Legal demands within insurance are increasing, particularly in cyber insurance, managing regulatory complexities and enhancing risk management frameworks. Insurance vacancies rose to 23% in Q2 2024, up from 10% in 2023.
  • Asset management: Demand is being driven by evolving global regulations and complex investment fund structures. Asset management vacancies reached 20% in Q2 2024, up from 10% the previous year.
  • Family offices/wealth management: There has been an uptick in demand within family offices, accounting for 6% of vacancies, reflecting growing prominence in wealth management and estate planning. Legal expertise in wealth preservation and succession planning is increasingly sought after to navigate the complexities of pension fund management.
  • Pensions: Increased demand driven by regulatory changes and the need for robust pension scheme management. Legal professionals with skills in pension regulation, administration and advisory services are highly sought after.

Key skills in demand in Q2

Our clients have shown the highest demand for commercial, corporate, regulatory and insurance lawyers, with an uptick in senior-level employment roles.

Outlook for Q3 2024

Looking ahead to Q3 2024, the banking and financial services sector is showing signs of promise, driven by sustained momentum in fintech, insurance and asset management, particularly in the specialist skill set areas mentioned above. It is expected that investment activity should pick up in H2 after the election. M&A activity in the UK is relatively placid year on year and IPO numbers remain low. There is an overarching sentiment of pent-up investment and growth potential across the industry and post-election we should start to see increased activity as there will likely be economic certainty and direction. All this should lead to increased hiring activity, although the in-house financial services recruitment market looks to remain cautious and steady.

The UK in-house legal market outside of London is experiencing growth across various regions and sectors. We can see distinct growth in very specific sectors according to geography and generally we are seeing demand for regulatory and compliance skills, commercial contracts and data privacy expertise, especially in tech hubs.

Stand out regions

  • Manchester continues to be a major hub for in-house legal roles in the financial services and tech sectors. Further south, cities like Cambridge and Reading, also tech hubs, businesses are looking for legal professionals focusing on data protection, cybersecurity and IP law. Financial services are also driving significant hiring in regional centres like Edinburgh and Bristol due to regulatory changes and Brexit-related relocations.
  • Birmingham is seeing growing demand in manufacturing, automotive and energy sectors.
  • Leeds is a strong market for legal roles in professional services and healthcare. The pharmaceutical sector is expanding across the Midlands and North West more generally as a result of increased compliance and regulatory work post-pandemic.

We are continuing to see the importance of hybrid working models in order for businesses to attract top talent. Even so long after the introduction of this way of working, it remains a key point of discussion with lawyers looking to move roles and we are always asked to provide this information early on in a process. Businesses are retaining the mix of remote and office-based work and offering providing flexibility in working hours and locations.

The benchmarking for salaries is getting more complicated across the regions as we are starting to see instances where, in the bigger metropolitan areas, like Manchester and Birmingham, businesses are offering packages that are approaching London levels. They are also adding more enhanced packages to this reward discussion. This is particularly at the senior end and is proving to be a good way for regional in-house legal teams to attract the most quality talent and entice them out of the South East. We are seeing noticeable skills gaps in areas like fintech and biotech and in these instances, having the more competitive salaries and benefits package is important so businesses can recruiter from a wider geographical pool.

Outlook for Q3 2024

The future outlook for the regional in-house legal market is generally positive, due to increased collaboration between regional offices and London headquarters which is expected to drive growth. We also expect to see an uptick in hiring in Q3 following the general election. Some businesses have been cautious about recruiting in the lead up to July, but we predict that once the dust settles and we start to get an idea of the changes the country will face, businesses will feel more confident to kick off any hiring they had delayed.

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