Legal Market Overview: Expectations Misalign

The common theme of this Salary Guide, as well as our experiences of hiring in the sector this year, has been a misalignment of expectations when it comes to salaries. Generally speaking, salaries within the legal sector peaked back in 2022 and, since the mini-budget was announced in the final quarter of that year, we haven’t seen any movement on them. However, in the research that we have conducted surveying our own talent pool, which is set out within this salary guide, it is clear that many professionals in the sector still don’t feel that they are being paid what they are worth. This misalignment of expectations between firms and prospective hires has caused some friction in the market.

Counteroffers have continued to play a significant role in the hiring market, but we have seen this steadily beginning to level off as the year has progressed. However, with that being said, it does seem that the more senior-level professionals are still being counteroffered at a high level, and we are still seeing these offers being accepted. This is likely because firms are very aware of the difficulty they will have in replacing these individuals in a somewhat challenging hiring climate, so they are prepared to make a generous counteroffer to retain existing senior-level team members.

In terms of industry trends we have seen this year, the increasing presence of tech in the legal space has been notable: a fifth of all jobs on law firm’s websites are now tech roles, so this shows a real desire to increase the presence and importance of tech within law firms, and for firms to embrace emerging technology. There are practice areas that are quieter than others; Corporate and Real Estate have been quieter areas than we would expect. But, by contrast, Litigation and Restructuring and Insolvency have been relatively busy areas, as have Private Client and Family. But this could all change in the coming months, and Corporate will likely become busy if a recession does happen, whereas Property would be likely to suffer in that case. The high-interest rates and talk of recession will always hit transactional practice areas hardest and quickest, such as Real Estate and Corporate. Litigation historically has done well and has been relatively steady in 2023, whereas Conveyancing has dipped substantially post-SDLT holiday.

Looking ahead at the outlook for the months to come, we predict that hiring in the sector will become more structured, as opposed to the more opportunistic style of hiring we have seen of late, and we predict that firms may now be able to plan further ahead with their hiring. Firms have also had much more specific criteria when looking to hire in recent months, and this is likely to continue: for example, London law firms are now less willing to look at regional talent, and only very fixed PQE ranges (i.e. 3-5 PQE only) whereas before they were more flexible (e.g. 2-6).

The ongoing hybrid and remote working debate is also likely to come to a head in 2024; currently, an office presence of 60% is the market average. But if you are a firm that is willing to go against the grain, you could secure the best hires. By opting to hire on a remote or hybrid basis, you can broaden your talent pool significantly, and give yourself the opportunity to grow your headcount in a shrinking market.