Will the waiting game being played by many banks and financial institutions create a New Year’s rush to recruit?
"As opposed to compliance/regulatory hiring which has been and remains extremely active across the financial services sector, the run-up to Christmas has seen more limited recruitment for lawyers," says Matthew Lawson, Manager of LPA Legal Recruitment's In-House and Banking division. "In some cases organisations' growth plans dictate that they proceed with key hires, but th majority of investment banks have very few roles that are being progressed between now and the New Year. Client enquiries are increasingly centering around the impact of the changes to the regulatory regime for the banking and financial services industry has prompted lawyers to take stock of their current situations and career aspirations. The immediate effect of the changing regulatory approach is that, particularly among the larger investment banks, base salaries have seen significant increases this year to compensate for curbs on bonuses, and further increases are likely in the first and second quarters of 2011. The compensation negotiations taking place in the 'bonus season' are one reason why candidates are getting in touch - they want to know how their compensation stands up to the market and how to handle the negotiation process - but candidates are seeking much more guidance than simply how to get the best deal for the coming year. The uncertainties created by changes to the regulatory regime, in particular the directives on clearing, MIFID II and BASEL III, as well as AIFMD, have led many candidates to begin the process of examining how best to position themselves in order to meet the likely requirements, in terms of skill-set, of the banking and financial services industry for the next three years.
For many lawyers, flexibility has been the essential ingredient in navigating widespread restructuring of legal departments over the last twelve months. Flexibility on geographical location in some cases; in others, on the area of business they support. I am generally impressed by the number of candidates getting in touch who recognise the need for them to change with the changing world of financial services and by their realisation that this period is when they need to discuss what opportunities they might realistically explore to further their careers.
Several conversations recently highlight the importance of new regulations governing derivatives clearing. The work involved in falling in with the new regime is considerable and is certain to give rise to some interesting issues over the next two years at least as investment banks attempt to balance the need to provide their clients with the tailored products they demand whilst satisfying new regulation. Candidates are conscious that the experience they have gained in drafting ISDA documentation, for example, could be transferable to new roles in this area and want advice on how to capitalise on such opportunities and how to present their credentials effectively in applying for them.
The backdrop for these conversations is positive. Trading volumes are up pretty much everywhere – enough to keep everyone busy – and the feeling is that it is sustainable. As far as hiring of lawyers goes, aside from re-filling positions vacated due to resignations and those positions created by specific projects such as specific pieces of litigation, there is a sense that institutions have their fingers poised over the 'start button'. OTC derivatives, specifically equity derivatives is likely to be an area of strong demand in early 2011 and candidates with European languages (and in some cases qualified abroad in Europe) might well have the pick of the roles.
The private wealth management industry is still active and is likely to become even more so in the first quarter of 2011. Several clients are recruiting lawyers with good business-facing risk management experience at a senior level. In terms of geographical hotspots of activity, London, Hong Kong and Moscow have stood out recently.
Clients are equally looking for advice. They need to know where they stand in the market. Are they competitive? Which institutions should they be benchmarking themselves against and which should be discounted as being way outside of sensible sustainable parameters? What ammunition do they have when countering the offers their people or candidates receive from institutions offering way over market compensation? There has been an increasing focus recently on how to look after their people well which takes into account the whole range of issues from benefits packages to career progression. Advice around offering and closing candidates has always been a significant part of our service, but all the indications are that in the first quarter of this year, this advice will take centre stage if clients are to avoid the consequences of multiple offers being turned down and the resultant time lost by senior management.
Matthew Lawson, LPA Legal Recruitment (January 2011)