Q1: What are the in-house legal recruitment market trends?
What is happening in the legal recruitment market across corporate and commercial and banking and financial services sectors?
Corporate and commercial
While economic uncertainty and geopolitical tensions continue to impact businesses the outlook for the UK Legal In-House Market in 2024 is more positive for commerce and industry than the news would suggest.
We have seen a strong start to the year on the industry side with a particular uptick in roles across energy and pharmaceutical/healthcare sectors. There have been first signs that the technology sector is recovering after a year of redundancies and major cuts significantly reduced hiring at all levels in 2023. The number of vacancies the Taylor Root team are instructed on in the technology sector has almost doubled compared to this time last year and we have seen the same increase in direct hiring advertisements too.
Retail and FMCG remains steady with similar volume of instructions across these industries compared to the same point last year. The Media sector whilst it has dropped a little from 25% of our total vacancies in Q1 in 2023 to 17% in 2024 this is in line with prior years and ahead of 2022 so the sector is still looking robust. One sector where we saw significant increase in instructions (from 9% in 2023 to 15% in Q1 2024) is the not-for-profit sector. This is an extremely broad sector covering sustainability companies, charities and education and it is encouraging that their legal teams are now receiving headcount approval for additional hires to support already-stretched in-house legal functions. Encouraging, there is still strong demand for in-house lawyers to move to the third sector and bring skills gained in the private sector to this space.
Highest demand from our clients is the well-known profile for commercial counsel around 2-6PQE level although businesses are being much more considered and flexible in their hiring processes compared to frenzied hiring in 2022. Salaries have stabilised but there remains a knock-on effect from law firm hikes at the junior end of the in-house market. In 2023 we saw a strong return of the flow of Australian and New Zealand qualified lawyers looking to move to the UK and this looks to continue in 2024 allowing businesses to access an additional legal talent pool that is often keen on transitioning into an in-house position.
Finally, demand for lawyers on an interim basis has increased significantly from clients over the last 6-12 months and this is not slowing down with 20% of our corporate and commercial roles in Q1 of this year being interim in nature. One of the main challenges cited by General Counsel for the last year has been difficulty getting the headcount and budget to secure the talent they need in the legal team. Interim can be a great way to secure resource initially then look to then convert this to permanent headcount and, we are already seeing clients in Q1 being able to put this strategy into practice successfully.
Contact Georgia Morgan-Wynne
Banking and financial services
The financial services and banking legal in-house recruitment market, for the last three quarters of 2023 was challenging and although there is a more positive outlook for 2024, the market has remained cautious and steady in Q1 of 2024. This slowdown over the last 12 months aligns with the broader economic climate impacted by factors like higher interest rates which has dampened business confidence and investment M&A activity, leading to reduced legal needs within financial institutions. Ongoing global uncertainty and other geopolitical tensions have created an uncertain economic environment, causing companies to still be cautious about hiring.
Despite the overall slowdown, some areas continue to see demand for lawyers with the following skill sets:
- Regulatory: With ever-evolving regulations, legal expertise in this area remains crucial across all sectors
- Insurance: Areas like cyber insurance and climate change are creating new legal needs within the insurance sector. Nearly half of all the current vacancies the team has been working on in Q1 2024 are in the insurance sector, including a couple senior General Counsel opportunities in this space
- Asset management: Regulatory changes and a focus on ESG (Environmental, Social, and Governance) investing is driving demand for legal expertise in asset management
- Fintech: In 2023 Fintech was one of our busiest sectors with 22% of vacancies in this sector. This is no surprise given the speed in which these businesses are continuing to disrupt the traditional nature of the finance sector. These businesses are offering innovative solutions particularly in areas such as payments, lending, and wealth management
- Private equity, venture capital and family offices: As investment activity slowly picks up, this has resulted in an increased demand over the last two months for corporate M&A lawyers particularly in these sectors
Whist hiring has slowed, competition for top legal talent within the niche areas mentioned above remains high. The near-term outlook for the financial services and banking legal in-house recruitment market, is cautious and whilst there are some signs of improvement full recovery is not expected immediately. The legal specialisations mentioned above are likely to see the most consistent demand, although it is worth noting that since the start of 2024, we have certainly seen a slow change and businesses are starting to build their legal teams once again as investment activity picks up. We have also seen a slow increase in the number of interim hires we have been instructed on this year and in the number of General Counsel instructions, we are currently working on five General Counsel hires across fintech, insurance, financial advisory and family office sectors.
