Identifying current market trends is not a part-time job. Many firms are chasing a few highly profitable areas of business and, consequently, a narrow pool of candidates - meaning only the soundest business cases and reasons for moving are being considered. It does, however, also mean that the opportunities for the most highly-qualified and experienced lawyers in certain markets has never been better. With the UK firms' increasingly conspicuous attempts to compete with the Wall Street and the Sweet Sixteen firms' historically tight grip on high yield debt capital markets for example, there are opportunities (whilst rare), for outstanding senior associates to move straight into the partnership of top-tier US and UK firms. The market for candidates in this area is finite to say the least, and attempting to break up the powerhouses could prove to be an expensive exercise. There are also whispers that the Private Equity sector will come to life in 2011, albeit not at pre-credit crunch levels. Specifically in relation to funds/hedge funds, we have also seen some activity at mid to senior associate level in relation to leveraged finance with many of the leading US firms in particular keen on high quality Magic/Silver Circle talent.
It's a similar situation in the financial services regulatory arena as both law firms and the in-house legal departments of financial institutions scramble to attract the minority of senior candidates whose experience and reputation in the regulatory sphere is sufficiently high-profile to give their firm or institution the level of representation they seek in front of their clients or regulators respectively. A similar trend is evident in litigation where demand for highly regarded directory-listed partners is very strong. Other areas experiencing significant attention from hiring firms are banking and finance with demand for broad brush experience, notably project finance for the Russian, CIS and other emerging markets. Energy and energy (project) finance continue to receive a great deal of attention and it is likely that the current preponderance of disposals will eventually yield a return to acquisitions by energy sector clients giving rise to renewed demand for M&A partners and lawyers with strong energy sector experience. The issue of law firm panels dominates the energy sector as much as the financial sector; if anything, firms need to be truly international to compete for work as energy sector clients require advice on the ground in all the countries in which they have operations. In order win a share of this market which is tightly held by the largest law firms, the next tier is likely to experience more mergers if they are to survive in a market in which the biggest firms have an undeniable advantage.
Risk is now widely accepted to be at the top of the agenda for financial institutions and other companies alike. There is a myth that litigators find it harder to make a business case and that litigation is by its nature less predictable than other areas such as corporate and commercial. The best litigation partners and teams are, however, currently in a very strong position: if they know their clients and their businesses well enough, they will almost certainly have invaluable experience of advising them in a pre-litigation context and will be well placed to assist them as hot-spots flare up, or threaten to do so. They will have an eye for which deals might turn sour and be able to step in to minimize the impact of any related litigation for their clients. So here again, it is in-depth knowledge and relationships formed over a long period of time which explains why senior litigation partners are so highly sought after in the more challenging economic circumstances businesses currently face. Whilst there has been a reasonable level of hiring litigation assistants, it is only a matter of time before recruitment at this level significantly increases. The desire to keep litigators fully or even overly-occupied (after a period of working at less than full capacity) will be replaced by a tipping point which will see litigation departments experience burn-out and assistants start to leave under the strain. The smart firms are already ahead of the game and have been building teams over the last few months (or even years); but even these firms are likely to bolster their teams further over the coming months.
James O'Brien is a Director of LPA Legal Recruitment (November 2010)