Lawyers - redundancies

[Citygirly]

Would love some advice from other lawyers. You will have all seen the pay wars between firms for junior talent. Apparently, this is because they are struggling to retain talent so need to continue to be competitive. Magic circle firms have just gone up to £125k. The second increase in 6 months. Crazy.

My friend works at a national firm and his partner said to him that he thinks that bigger firms will have to start making redundancies in order to be able to pay these salaries. I was discussing this with DH. This obviously made me worried but DH thinks it is the partners tactic to try and make juniors stay as if they move, if there were redundancies, juniors would feel more unsettled as they were the last in.

What do you guys think and what is happening in your firms currently? The idea of redundancies is obviously stressful!

If they are having to pay high salaries to attract lawyers for what are presumably costed vacancies, why would they then make redundancies? Either they need people or they don't. Either they have the work or they don't. Although I think in some law firms the culture means you earn a lot but work ridiculous hours. I think it would be better to pay two people £50K each to work 35 hour weeks than one person £100K to work a 60 hour week!

But I think maybe your friend needs to look for another job. I was approached by an agency yesterday about a job in another law firm. It is paying a lot more (up to £40K more for a full time role!) but I am happy where I am. My employer pays less but the culture is pretty human for a law firm.

friend's partner that is

@yellowsuninthesky I agree! That's what I thought so that's why I was baffled by what my friends partner said. Maybe it was a scare tactic.

A lot of firms are super busy atm and struggling to retain talent. Mine definitely is. It will be interesting to see what happens next, I think the pay wars need to stop as it's becoming ridiculous now!

I don't think there will be redundancies except possibly in some of the very transaction based depts, but that will be because of the economy rather than high junior pay. It's mad how much NQs get paid these days for essentially no experience.

This is what I was thinking. Hoping it turns out to be the case!

Honestly! I'm still very junior but the difference a couple of years makes is truly crazy. I knew nothing at qualification and now some NQs are being paid well over £100k in the city. True madness.

I'm not complaining as obviously I benefit but it is just crazy. Especially how it's exploded over the last two years

www.law.com/international-edition/2022/01/25/which-firms-have-the-biggest-pay-gap-between-top-and-bottom-earners/?slreturn=20220425045203

It is a structural problem that an equity partner earns 1.85 million a year (eg 2021, Clifford Chance) vs what an NQ was previously earning, often doing the same hours. So I think it is a good thing. Essentially, US law firms came in 10-15 years ago to attract the right talent and paid them more.
These UK law firms will have learnt in previous downturns not to get rid of highly trained staff too quickly. They invest so much in recruitment! Remember what they will have to pay to rehire!!
So I suspect they would take the long view more. Note for example how much more profitable Clifford Chance was in 2021 during the pandemic (savings on travel, business premises etc). I suspect this is where savings would be made in a downturn, not on highly qualified and hard to recruit staff.

The service we get from legal professionals is appalling, because their wages are so high that getting anything done between their holidays is impossible, add to that childcare responsibilities that eat into the work hours it’s awful.

Even straightforward conveyancing and leases can take months, even then mistakes come up at the last minute.

Lol ok

I agree with this. During lockdown it was the transactional team that was affected, not the disputes side. If we are indeed heading into a recession, or even simply caution about transactions, then it will be the transactional teams that will feel the effects.

Dispute lawyers may have a pay cut but not as many redundancies.

Doubt there will be redundancies to pay for the pay rises. Although they might take on fewer trainees or maybe have fewer vacancies on qualification.

Crazykatie the lawyers who do conveyancing and other work for individuals don't earn this sort of salary, in fact some if not most of them are not solicitors at all, they are paralegals and earn poor salaries.

I agree that processes take ages - my MIL died last week and I said I was happy to do the probate as I did it for my dad when he died, but SIL said no, she'll get a solicitor to do it. So I imagine it may be done sometime this side of 2030. When my uncle died my aunt waited about 18 months for a straight-forward probate to go through using a lawyer. It took me 5 weeks to do my dad's ;)

Business lawyering is very different though, lawyers are well qualified, well paid and responsive.

Also, mistakes happen when lawyers are trying to do too much in too little time.

I think the redundancy issue may come if the law firms expect clients to pay hourly rates to compensate for the high salaries (as opposed to reducing PEP). There really comes a point where clients decide that the costs of getting legal advice outweigh the risks of not getting it. Businesses are going to be increasingly pressed with inflation and paying upwards of £300 an hour for a NQ has questionable real value.

As an in-house lawyer I also don't want lawyers working 90 hour weeks doing my work - this is because (a) I'm not a shot who enjoys beasting LC just coz I can, and (b) I want people who are rested enough to be able to do the work to a good standard.

Plus these high salaries just lead to inflation. They don't help anyone really.