The effects of Covid-19 on the Legal Market: September 2020 Update

 

Introduction

In this article we briefly discuss and comment on the effects of the Covid-19 pandemic on staff at legal firms. Bear in mind that no two firms have the same business needs or office arrangements, so their practices and treatment of staff can vary widely. Here we consider items such as staff working from home, reduced working hours and pay, furloughing, redundancies, trainee retention/ NQ jobs and recruitment. 

Working from home

Covid-19 has impacted law firms in three main ways – the loss of revenue in some practice areas, an increase in revenue in other practice areas and the need to follow government pandemic guidelines. As a result, law firms and their staff have had to adjust to these new realities.  For instance, open office firms have had to adapt to large numbers of their staff having to work from home for many months. This requirement on individuals to work from home has had mixed results. Some individuals we have spoken state how they resent working from home because they feel isolated and miss the person-to-person contact in an office.  Interestingly, some other candidates we’ve contacted now want to permanently remain working from home in some capacity. It remains to be seen how these preferences among lawyers will impact their ongoing work and possibly their own job prospects, and to what extent any permanent working from home policies affect them in the long-term.

Other Norfolk legal firms have offices which are not open plan. In some of these firms fee earners and support staff have their own individual offices. Because these office environments are generally safer, there has been less need for home-working and as a result, less overall impact.  In fact, some smaller firms have never had staff working from home at all.  

Reduced hours and reduced pay 

Because of reduced business activity, some firms have offered their staff the opportunity to reduce their hours and pro-rata their salaries accordingly. In other firms there has been an across-the-board pay cut for certain groups of staff. Of course, some firms have done neither of these. In cases where we have spoken to people about these cutbacks, there have been both positive and negative responses. Some people who wanted to go part-time and now have been able to, are happier. A few others feel it has caused unrest/ill feeling amongst staff as they really depend on their salaries.  

Use of the Furlough scheme 

Most local firms have made use of the government’s furlough scheme – especially for non-fee earning staff. However, one problem here has been the apparent inconsistent decisions in furlough use. Some staff we have spoken to have been relieved at being furloughed. Some even requested it. (One reason for requesting it has been to home school children/a lack of childcare.)  Others, however, have been very unhappy about being furloughed as they feel that there was no adequate explanation on why they were furloughed while others in their team were not. And then there are the staff working in busy areas who were not furloughed, whilst their colleagues were, and in some cases these people have also had a pay cut too.  So law firm response has been very different. 

Redundancies

So far, there have only been a handful of redundancies in Norwich itself.  However, in some of the surrounding areas there have been large numbers of redundancies. The good news is that lawyers who have been made redundant have in most cases found new jobs quickly in the same practice area.  However, redundant legal secretaries have had a tougher time. There are currently very few legal secretarial jobs and more available candidates than before the pandemic. So finding jobs is tougher for them.  (See below for some comments on legal secretarial positions and what this means for firms and employed legal secretaries.)

Trainee Retention/NQ Jobs. 

Some qualification dates for solicitors have been pushed back to November instead of September to reflect furloughed periods in training contracts. We think that most firms are looking to retain their lawyers since the recruitment of lawyers in certain areas remains a challenge. For trainees not being kept on, there are very few opportunities for NQs in the current climate. 

It remains to be seen what the impact on the retention of lawyers will be in 2021. It also remains to be seen if there is any impact on future training contracts to commence in 2022/2023 and beyond, and in particular the number of them.  

Recruitment of lawyers 

Overall recruitment has slowed down and there are fewer opportunities – particularly in the areas of commercial property and corporate compared to this time last year. Junior lawyer and paralegal positions are particularly scarce (perhaps because new hires need supervising and so cannot help ease any burden of an increase in work in some practice areas).

On the other hand, Covid-19 has now had a positive impact on the work demand for conveyancers and employment lawyers.  So candidates who work in one of these areas are currently in short supply with a lot of firms recruiting.  Lawyers with the magic 3+ years of experience, who are competent, do not require supervision, and can bill/generate an income in their own right are particularly in demand. This means lawyers working in these practice areas are now in a strong position to negotiate on pay both by remaining at their firm or by moving firms.  Firms recruiting in these areas are finding it tough to attract candidates – this benefits candidates who have improved leverage to negotiate their rate of pay. If lawyers working in these areas choose to leave their firm, their firm is likely to find hiring a replacement tough (and expensive). 

It should also be noted  that any senior person or partner with a following of clients (in any profitable practice area), can carve out their own opportunity to move firms and perhaps join one which has better longer term prospects if they have a convincing (and accurate) business case to present. 

As a passing comment, our experience shows where firms are recruiting they are still looking to meet candidates in person (sometimes in addition to initial Zoom calls). 

Legal Secretary Recruitment 

There are far fewer opportunities for legal secretaries than there were this time last year.  Several legal secretaries have been made redundant due to the pandemic and are looking for new jobs. This means that employers, should they have a need for a legal secretary, in theory should be able to fill their vacancies and have some choice of candidates in doing so. 

For those legal secretaries who remain employed, there are two potential issues in these uncertain times. Firstly, poor or under performance in their job may be dealt with more harshly than before the pandemic because finding a replacement legal secretary is easier for firms.  And secondly, pay increases may be frozen because the available out of work talent pool may be less expensive than those currently employed.    

Contact Us 

If you would like to discuss the market and what this means for you or your firm, or you would like to share what measures your firm has implemented or is considering implementing, do get in touch.