08 Feb Hiring Trends: The Current State of the Legal Jobs Market
As we begin to depart from lockdowns, mandates, and working from home the job market is exploding with potential. A variety of factors influenced the global economy in the past few years, and it is safe to say the rebound is on the horizon.
According to Totaljobs, the final quarter of 2021 showed a 38% increase in businesses seeking to hire candidates. This comes directly after the 2021 third quarter that showed a whopping 43% of businesses recruiting and hiring. Of all the businesses surveyed, 78% were actively recruiting throughout the waning months of 2021. The Legal Industry had the fourth-highest recruitment rate of all industries in Q4 2021, with 43% ramping up their recruitment. It is important to note that these stats define the increase in hiring efforts from firms, meaning the number of vacancies and endeavours to fill them is at a record high.
2022 has dawned, and the large volume hiring trends are remaining, albeit slowing down slightly. There has been a shift in the perspective of these hiring firms- from quantity to more of a quality focus. Firms are reporting that skills shortages are the top priority moving forward, and the forecast shows an increased concentration of external applications.
The increased demand for skilled employees has led businesses to improve their application processes as well as review and better their employee benefits and engagement programs. These programs include long term hybrid working environments, employee health and wellness, upgraded reward packages, and further development of learning initiatives.
In addition, there is a massive wave of industry switching- as 71% of job seekers are open to working in different industries. The top three desires for workers in 2022 are defined as higher salaries, improved work-life balance, and an increased sense of fulfilment.
The major growth areas in the legal jobs market focus on technology, real estate, and private equity areas. These stem from the lowered interest rates in the pandemic incentivising investment. Energy, government, and employment law have remained quite stable throughout the pandemic and have shown substantial growth towards the end of 2021. Corporate law saw a decrease in headcount in 2019 and 2020, but is projected to bounce back as a result of new and higher interest rates. It is estimated that the legal industry in England & Wales needs to recruit roughly 7,000 lawyers this year, which is a need unmet by only 3,100 graduates and 3,300 returning lawyers. These numbers contribute to the salary trends we see as well.
Simple economics tells us that excess demand drives prices up, which we see in the salaries being offered in the legal industry. Based on statistics from 2019 and the end of 2021, the boost in salaries is across the board. There is an average 30% pay increase for NQ lawyers and 20% for 3-5 PQE lawyers. For 6+ PQE lawyers, the salary increase equates to roughly 20% as well.
We’ve discussed how the labour market has changed, but it is apt to note why this increase in demand for skilled workers is occurring. The candidate shortages can still partially be explained by Covid-19 and the impact restrictions and cases have on individuals’ daily lives. Paired with this, the UK has seen higher inflation and cost of living as a result of The Bank of England raising interest rates. These rates have grown from 0.1% to 0.25%, and 0.5% to 5.4% respectively. These factors, individually, can explain demand however when paired we get a better sense of why businesses are yearning for talent. As a candidate, it is a great time to look for suitable roles at quality firms.
All in all, the legal jobs market has seen a surge in demand. Overwhelmingly, the desire for good people with high calibre characteristics is at an all-time high. With inflation and wage increases inspiring candidates to start looking, there is no better time to take advantage of what the jobs market has to offer before the market begins to calm down. As we specialise in pairing people with top tier firms that suit their needs, we can assist and relieve pressure from the stressful process of finding a new job. Please get in touch to learn how we can support you.
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