Lateral hiring in the U.K. is set for a slowdown in the second half of the year despite a busy first half, according to research by legal recruitment consultancy Edwards Gibson.
The analysis found there were a total of 264 announced partner moves over the first six months of the year, with 91 partner moves between May and June alone. This is up 14% for the same period in 2021, and up 18% from the cumulative five-year average.
Edwards Gibson director, Scott Gibson, explained the hiring boom was a continued consequence of post-Covid saving and heavy transactional activity.
He said: “Initially there was a major productivity boost from lawyers working harder and longer hours from home as well as cost savings from rent reductions and reduced travel. Firms benefited from this and the huge amounts of government money being pumped into the system creating a deals boom; unsurprisingly this enabled rapid growth.”
U.K. Top 50 firm Eversheds Sutherland hired the most partners over the first half of 2022, adding 10 partners (seven of whom were laterals) between January and June, according to the data.
The firm was closely followed by Addleshaw Goddard, Mischon de Reya and Pallas Partners, which all hired seven partners each.
Last year’s table-topper, Kirkland & Ellis ranked third alongside CMS and Stephenson Harwood having hired six partners
On the reverse, Norton Rose Fulbright experienced the most departures, losing nine partners since the beginning of the year. The firm has also suffered several departures in Australia. Despite the busy period of hiring in the first six months of the year, Gibson suggested that there would be a significant cooling in law firm partner hiring over the second half of the year. He said this was due to “the wider economy slowing” as a result of the effects of Ukraine war and the cost of living crisis. “Corporate activity is clearly reduced,” he said. “Unsurprisingly M&A is down on last year’s record, but there are no floats and a sharp hike in global inflation (and hence interest rates) has, we’re told, already impacted some private equity matters”. This slowdown in the hiring market has not come unnoticed by those in firms either. One partner at a top U.K. law firm commented: “Anecdotally speaking, there are not as many firms which are looking [to hire]. We had a successful period of recruitment, and we’re still getting a few CVs coming through the door but there are not as many spaces to fill anymore”.
A London partner at another firm added: “At the moment, we are still making hires but this will definitely slow down. Corporate activity is starting to flatten out, not dropping heavily, but there are definitely pockets of the city looking decidedly quiet so I think we will see a more measured approach.”
“When recessions do happen the market is surprisingly predictable so we should see a rise in the hiring of disputes and restructuring partners. I think it will take 6 to 12 months to really cool off. But yes, the really ambitious hiring spree will slow down.” However another senior partner was slightly more skeptical that the future was all doom and gloom: “I wouldn’t be surprised if there was a slight softening in anticipation of the downturn but I don’t think it will happen just yet”.
Indeed, Ed O’Connell and James Franklin, directors at recruitment agency, Search Consultancy, believed the market was in fact still showing a lot of promise, specifically recession friendly practices such as restructuring and disputes.
“There has been a drop off in corporate activity and banking which has lead to a slower hiring rate in those sectors but on the reverse side, we have seen a massive increase in the in-house hires as well as restructuring and even real estate” said Franklin.
O’Connell echoed this, emphasising there was still a lot of demand in certain areas: “Many organisations are looking for restructuring lawyers and there aren’t even enough candidates about. The market will remain busy, that hasn’t changed. It’s just what people are moving into that’s different”.