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Rutherford Blog

Tevia Kretzmer
about 2 months ago by Tevia Kretzmer
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​Market Overview

2020 was an impactful year on a global scale: COVID-19 affected daily lives in more ways than one, salaries stagnated, redundancies were made and many firms adopted the UK Government’s Furlough Scheme. Certain industries, such as consumer goods, tech and pharmaceuticals thrived during the pandemic, initiating the need for further hiring whilst adapting to the new way of working remotely. Contrastingly the UK’s financial services industry, and more specifically its underlying in-house legal sector, prioritised business needs and profits by pausing legal recruitment and restructuring to stabilise and manage the uncertainty of the market. The sum of these factors resulted in a high volume of qualified candidates contending for a limited number of legal roles within financial services. 

In 2021, subsequent to the dust settling post-COVID, in-house legal hiring recommenced. As firms grew concerned over their critical business requirements and revenue flow, the need for transactional and deal-focused legal positions increased. Lawyers with strong transactional experience, as well as digital payments and data privacy experience were in high demand. Due to the inactivity of the job market during the pandemic, the industry became a job-rich environment, forcing employers to reshape their hiring stance to appeal to candidates. Firms recognised the immense competition in the market resulting in improved offers and enticing incentives such as flexible working to attract and retain strong in-house legal talent. 

Candidates with specialist skills became extremely sought-after in the in-house legal market, especially those with knowledge of legal tech and finance systems. Due to firms quickly adapting to the new normal and hosting interviews virtually, strong active candidates found themselves in multiple processes at any given time, some of them going through 2-3 stages of interviewing in a week. In order to not miss out on quality talent, companies were quick on their feet, offering attractive compensation packages in a shorter amount of time than usual. The velocity of virtual processes, combined with the competition amongst firms over the recruitment of specialist in-house professionals, meant that strong candidates were in an advantageous position, with some obtaining counter offers.  

Migrating from Private Practice to In-House

We have seen a trend emerge, where private practice candidates are considering appealing in-house opportunities. Top firm lawyers will contemplate a move as long as the new working environment is considered equal to their practice and naturally, matches their career trajectory

Prestigious firm candidates who get paid eye-wateringly high salaries upon qualification have proven to be understanding of the fact that a move in-house might come with a smaller compensation package. It is worth noting that migrating to an in-house position will not necessarily translate into taking a substantial monetary hit. We have seen firms compensating private practice professionals fairly: some have been known to receive an uplift in salary after moving in-house.

Traditionally, candidates in top tier firms will be offered extra-large newly qualified (NQ) salaries. For example, US law firm Goodwin Procter, are paying London NQ associates a base salary  of  £161,500 a year and $215,000 to their stateside counterparts. Although the initial salaries look appealing, these figures remain stagnant for years, with bonuses also being pale in comparison to the in-house legal sector. These will range from roughly 8-10% in the private practice sector, whereas financial service firms can go as high as 40-50%, depending on experience and seniority of the role they are applying for.

COVID-19 Impact on In-house Legal Hiring 

Despite the financial impact COVID-19 had on firms in 2021, the Association of Corporate Counsel’s survey reported the majority of CLO’s participants anticipated their legal teams to increase in size or at least stay the same, with only a small minority predicting a decrease. Out of the CLO’s surveyed, up to 32% of in-house teams will be adding lawyers to their departments. 

The increased hiring of legal professionals demonstrates the desire to manage more workload in-house, as legal departments have been caught in a whirlwind of increased internal and external pressures. Although the global pandemic was a critical risk in 2020, 90% of CLOs, stated industry specific regulations and data protection privacy rules are now considered the biggest challenges for organisations going forward. 

Anticipating the impact the trends would have on organisations, concerns grew over the changing privacy laws in jurisdictions and increased threat of cyber attacks. To mitigate these risks, firms (depending on company revenue size) plan to invest in additional skilled specific professionals to defend against these challenges.

Environmental, social and governance, with a focus on diversity and inclusion gained momentum throughout the pandemic. During 2021, 72% of legal chiefs expected D&I efforts to increase, the socio-political issues highlighted during COVID-19, influenced a shift in conversation and strategies within organisations. With the increased attention surrounding ESG initiatives firms are taking calculable steps internally and externally in regard to equity and inclusion amongst staffing and hiring. 

The Future of Working From Home 

The future of remote working may be challenged in 2022, despite many firms trying to retain and entice new talent by offering flexible working arrangements. Failing to offer at least a hybrid working option may cause businesses to struggle with candidate attraction: it is not a one size fits all approach within the in-house legal space. Employers must establish a formula that works best for the team or candidates in play. The initiative should be specific to business needs, the level of collaboration within the team and factors such as seniority level. For future hires, companies may consider adapting their benefits package to align with long-term remote working.

At a glance, it may seem that flexi working is only beneficial to candidates, however clients also stand to reap the benefits from this incentive. In the past two years, we have seen a number of firms downsizing, saving on higher rent and utility fees. It has also been reported that employees are overall more productive, working longer hours and taking less sick days due to them being at home - again resulting in companies saving money.

Looking Ahead 

As the year progresses we find ourselves coming full circle in terms of recruiting. Many employers have reverted back to pre covid-19 hiring processes. In person interviews have steadily been reintroduced, especially when employing for collaborative and senior positions.

Face to face interviews have meant slower employment processes, both candidates and clients can only offer up to two free days a week to complete interviews and practical tests. Causing two or three stage interviews to span over the course of a month in comparison to the week or two it took mid pandemic. 

Although the world is slowly reverting back to its conventional practices, we predict a hybrid working model to be the most favourable option amongst clients and candidates in 2022. Maintaining a traditional 9-5 working environment can prove to be a huge misstep in a candidate-led market, affecting your organisation's chances of attracting the best talent.

Salaries

Hedge Funds

PQE

Basic Salary Per Annum (£)

NQ - 2 years

70 - 100K

2 - 4 years

100-120K

4 - 6 years

105 - 135K

6-8 years

130 - 150K

8 - 10 years

150 - 170K

Head of Legal

180 - 250K

Managing Director

220 - 350K

Asset Management

PQE

Basic Salary Per Annum (£)

NQ - 2 years

65 - 95K

2 - 4 years

85 - 110K

4 - 6 years

95 - 120K

6-8 years

100 - 130K

8 - 10 years

130 - 150K

Head of Legal

180 - 250K

Managing Director

220 - 350K

Private Equity

PQE

Basic Salary Per Annum (£)

NQ - 2 years

70 - 95K

2 - 4 years

85 - 115K

4 - 6 years

95 - 130K

6-8 years

130 - 160K

8 - 10 years

160 - 190K

Head of Legal

180 - 250K

Managing Director

220 - 350K

​​

General Banking/Finance/Corporate

PQE

Basic Salary Per Annum (£)

NQ - 2 years

70 - 95K

2 - 4 years

95 - 105K

4 - 6 years

105 - 120K

6-8 years

115 - 135K

8 - 10 years

125 - 145K

Head of Legal

150 - 200K

Managing Director

220 - 350K

Retail/Consumer Lending

PQE

Basic Salary Per Annum (£)

NQ - 2 years

60 - 75K

2 - 4 years

65 - 80K

4 - 6 years

75 - 95K

6-8 years

90 - 110K

8 - 10 years

95 - 115K

Head of Legal

110 - 140K

Managing Director

150 - 220K

Brokers/Exchange/Market Infrastructure

PQE

Basic Salary Per Annum (£)

NQ - 2 years

60 - 75K

2 - 4 years

75 - 85K

4 - 6 years

80 - 100K

6-8 years

90 - 120K

8 - 10 years

120 - 145K

Head of Legal

130 - 170K

Managing Director

150 - 250K

Fintech

PQE

Basic Salary Per Annum (£)

NQ - 2 years

60 - 75K

2 - 4 years

65 - 90K

4 - 6 years

75 - 100K

6-8 years

85 - 105K

8 - 10 years

90 - 125K

Head of Legal

115 - 175K

Managing Director

170 - 250K

Payments

PQE

Basic Salary Per Annum (£)

NQ - 2 years

60 - 75K

2 - 4 years

65 - 80K

4 - 6 years

70 - 95K

6-8 years

90 - 110K

8 - 10 years

90 - 115K

Head of Legal

110 - 160K

Managing Director

150 - 240K

Insurance

PQE

Basic Salary Per Annum (£)

NQ - 2 years

60 - 75K

2 - 4 years

70 - 85K

4 - 6 years

75 - 100K

6-8 years

85 - 105K

8 - 10 years

95 - 120K

Head of Legal

115 - 160K

Managing Director

150 - 240K