Facing the squeeze

Redundancy is not a word much associated with Scottish solicitors in the past, but times are not as they were. With the wheels having fallen off the housing market in the wake of the credit crunch, reports of legal firms being forced to lay off staff, fee-earning and non-fee-earning alike, are commonplace.

“The latter half of 2008 is obviously a very difficult time for many Scottish law firms”, says Eddie Docherty, head of legal recruitment at Hammond Resources. “The downturn in the property sector is having a drastic effect, especially on the small and medium-sized firms who were used to having a steady income stream from the conveyancing side of their businesses. Bigger firms too are seeing a slowdown as the construction industry is suffering and there is a lack of liquidity in the market: for this reason many firms have slowed their recruitment activities.”

Nor are the specialist residential property firms immune; quite the reverse. Member firms of the Edinburgh and Lothians Property Group, and leading property firms in Tayside and the north east, announced redundancies or short time working as this feature was in preparation.

At the same time we have heard occasional reports from small offices of broader based general practices that they have “never been busier”. So what is the real employment picture in the Scottish solicitor profession at present? Are there jobs, and if so where? The Journal asked its regular recruitment advertisers for their assessment of the situation.

Outlook: poor,with bright spots

Those who responded were more or less agreed that there is currently little joy in the property sector. “Prospects are pretty grim as the majority of the solicitors being made redundant, particularly within domestic conveyancing, have only ever worked in this area”, comments Sharri Plimbley of Search Legal. “There are very few opportunities for property lawyers in Scotland at present”, Liz Frost at Hudson adds. “There are occasional vacancies within the public sector. If there is a chance to retrain within their present firm this is definitely a good option.”

For paralegals the prospects are even worse, particularly in the central belt. Plimbley’s colleague Jill Cowan reports that the number actively seeking work in property greatly outweighs the available vacancies, and advises candidates to seek temp or retraining opportunities. However there are still some openings in private client/executries, and contract/commercial.

But some claim that the picture is not uniform across the country, such as Stuart Coull of G2 Legal: “Edinburgh has seen the knock-on effect of its large financial services client base and its close links to London. The Glasgow property market has been particularly badly hit. However Aberdeen has only recently been affected in any way and it is really only residential and commercial property that has seen redundancies.”

Liz Frost agrees that the north east is bucking the trend to some extent: “Aberdeen is still fairly buoyant due to the oil and gas industry. The central belt is definitely seeing a dramatic reduction in the number of opportunities in both private practice and in-house.”

Sharri Plimbley, while reporting that Search’s four offices “are all experiencing the same slowdown in the same areas, i.e. residential and commercial conveyancing, construction and corporate”, adds that they haven’t seen a lot of redundancies on the commercial property side, and where there have been, solicitors seem to have been able to diversify into construction roles, for example.

What’s on offer?

So what practice areas are still seeing activity in the current climate?

“There is still a demand for construction, projects and environmental and planning lawyers”, says Frost. Most others point first to court work. “Litigation is emerging as the growth area for legal recruitment”, claims G2’s Victoria Watson. “Both civil and commercial litigation (reparation, personal injury, construction and property), as well as employment law, corporate, corporate tax, oil and gas and PFI projects are still strong recruitment areas. Family and crime are fairly recession-proof, and debt recovery has had a new lease of life.”

Plimbley’s view is “civil litigation: personal injury, debt recovery, family, employment, insolvency etc; and in-house has been very buoyant this year and remains so”.

Eddie Docherty, while again pointing to Aberdeen as an area where the market is holding up quite well through the oil and gas sector (“Corporate departments there are still busy, albeit not as frenetic as they were earlier in the year”), adds: “Across Scotland there is still a shortage of good employment lawyers, and debt recovery and insolvency specialists are more and more in demand.”

Stuart Coull however sounds a note of caution over moving to another type of work. “Changing the area of law practised is always very tricky. Residential property lawyers often get sidelined into private client, and commercial property lawyers into property finance, construction or projects. However the nature of the market generally means that non-contentious work as a whole has been hit, and waiting for the market to bounce back might be the only option for most people.”

The rural picture

If lawyers are willing to move to where the work is, what about the more rural firms, the traditional poor relations of the recruitment market despite their best efforts to talk up the quality of life outside our cities? Or have they been just as much caught up in the downturn as everyone else? Again responses differ to some extent.

Liz Frost thinks they have: “Rural firms are most definitely also feeling the squeeze, due to their reliance on property and also due to the changes in the legal aid system. In some circumstances they are looking at merging with other firms.”

Sharri Plimbley paints a similar picture, knowing of quite a number of redundancies being made in Dundee, Perth, Inverness and outlying areas. However her colleague Jill Cowan, who generally takes a pessimistic view of the current prospects for paralegals, believes that “in general rural locations seem to be hit less hard and active [paralegal] candidates are more likely now to consider rural locations. That said, we are still recruiting for rural locations where there is a shortage of active candidates”.

G2’s Stuart Coull, who takes a particular interest in rural positions, maintains that rural firms are still recruiting – “although they can now be more choosy as to who they take, and in any case (as is ever the case) will not take someone on unless they are convinced, and the candidate can prove, that they have either links and/or an affinity with the area that is going to be more than a stop gap whilst the market recovers”.

Tougher for the NQs

If it’s a buyers’ market, how does that reflect in the type of candidates being sought? The majority of our recruiters claim that the lawyers most in demand at present are those with some years’ experience, and preferably a client following. “Senior lawyers with a real following rather than a ‘black book’ of contacts will always be sought after”, says G2’s Watson. Liz Frost  of Hudson reports that “Many of the private practice firms across the central belt currently have a recruitment freeze in place for all staff, unless a candidate has outstanding experience or has a specialist discipline which is hard to source, such as pensions/tax… the majority of vacancies across Scotland (although few) are at four years’ pqe+.”

While Frost believes that most 2008 qualifiers have secured positions, there have been those whose expectations of having a job to go to have been rudely shattered by their prospective employers having second thoughts – a situation reflected in that of a number of intending trainees. Other recruiters acknowledge that this will prove to be a tough year to qualify in.

“The jobs market for newly-qualified solicitors is as bad as it has been for many years”, Hammond’s Docherty comments. “Many NQs are being informed that the job they had been due to start has been scrapped as a result of the downturn. If you are a newly-qualified solicitor looking to work in property then this really is a tough time.”

Victoria Watson notes: “In times like these we see a polarisation in the market – firms tend to side with expensive, senior and cast iron, or lower level, cheaper and low risk. This creates a vacuum quite often in the NQ-five year market and NQs this September are going to find it incredibly tough.”

Sharri Plimbley of Search sees less of an imbalance: “The picture hasn’t really changed in that respect. We still have senior roles for solicitors in the areas of private client, family, employment and in-house, but we have also been busy at NQ level although there will be a higher number of 2008 qualifiers who struggle to secure their first assistant’s post this year.” Looking at the overall picture she agrees that there is currently a surplus of candidates: “Up until six months ago if you hadn’t worked within commercial property but had an interest within this area you were being given a chance, whereas now firms will wait to get their absolute ideal.”

But it isn’t the case, as some appear to think, that you have to keep up your practising certificate or come off the roll altogether – see the panel (pp 10-11) with the information from the Law Society of Scotland about breaks in employment within the profession.

Ex-pats return?

What about opportunities for those prepared to look down south? As is well known, the property market in England & Wales has if anything suffered an even sharper reverse than in Scotland, and Sharri Plimbley relates the feedback from her English colleagues as indicating that “the number of Scots relocating to the south has dramatically declined, and it is more the reverse, people wanting to come back up to Scotland”.

Eddie Docherty on the other hand believes there are still openings: “London is a huge market, and while the effects of the downturn are being felt there too, there are always jobs for good lawyers, especially in the banking, corporate and IP/IT areas.”

G2’s Watson dares to hope that England & Wales may already have seen the worst. “Outside Scotland things have levelled out. In England (where we have six offices) I think we have seen the bottom and firms have emerged from the frankly ridiculous state they were in six months ago where some firms panicked and put recruitment on hold…. I think lawyers have realised that outside of property and some finance disciplines it really is business as usual – people are still having accidents, getting divorced, committing crime and dying. No doubt that will filter northwards over time. Dublin (where we also have an office) has still got a strong market for corporate, PFI projects, construction litigation and tax.”

Liz Frost however warns that “if the economic slowdown continues, the number of 2009 qualifiers [in Scotland] being retained within their present firm or securing new jobs will be very limited”.

To the four corners

Asked about prospects even further afield, our recruiters report an overall downturn in activity but a few continuing hotspots. Frost notes: “The most common locations for Scottish lawyers to relocate in the past few years have been Australia, Asia, Dubai and London. Due to the fact that the economic slowdown is a worldwide issue, there has been a decline in the number of opportunities overseas (with the exception of Dubai and Eastern Europe).” Even property lawyers, she reports, are still in demand in Asia and the Middle East.

And Eddie Docherty says Hammond is currently “assisting international law firms who are very active in Dubai, Abu Dhabi and in Eastern Europe and they are finding it very difficult to recruit lawyers with strong experience in corporate, banking, commercial property or IP/IT. If you are a good lawyer with experience of working for a big firm then there are fabulous opportunities out there”.

A longer view

So, taking as the bottom line question “Are there enough jobs to go round?”, the answer appears to be, not if you are in property, in the short term at least, and not without being prepared to migrate if necessary in search of work. As Victoria Watson puts it: “There are enough jobs around unless you are in one of the ‘hit’ areas. If you are in residential or commercial property it just needs confidence to return and I think there will be a surge in roles, given that firms have been so cautious over the past few months.”

Solicitors looking for work will certainly be hoping that Chancellor Alistair Darling’s remarks about the downside risks facing the economy, which hit the headlines shortly before the Journal went to press, will prove unduly pessimistic. But perhaps their employer firms too need to take a longer view. As Liz Frost reminds us, “In the early 1990s the UK suffered a recession which resulted in not enough lawyers being trained or graduates moving into the profession. As a result, when the market improved and until very recently, the legal market became very candidate-tight in many disciplines, such as private client, corporate, projects, construction, pensions, tax and employment. Law firms need to be careful that history does not repeat itself.”

Tailpiece

What can firms do to keep their staff motivated during a downturn? Working in partnership with a charity called Challenges Worldwide (CWW), Hudson-Legal is offering some ideas to help their legal clients continue to invest and develop their people and brand. Hudson helps to source and place Scottish based lawyers for short-term international assignments in NGOs to benefit some of the world’s poorest people. The assignments are legal roles which not only improve their own personal and professional development, but can enhance their existing legal skills which in turn will benefit their employers on their return. To find out more, contact Liz Frost, Hudson-Legal on 0131 555 9913.

For more information on Challenges Worldwide and the central resource created by the Law Society of Scotland for firms hoping to become more involved in corporate social responsibility opportunities, see Journal, March 2008, 28.8

Keeping the door open

Some solicitors have found themselves in the unfortunate position of being liable for the annual levy to the Scottish Legal Complaints Commission while having been made redundant. One asked the Journal whether they had to have their name taken off the roll of solicitors in order to avoid this, and if so, how easy it was to get back on.

In fact not all solicitors on the roll hold a practising certificate. Bruce Ritchie, Director of Professional Practice at the Law Society of Scotland, confirms that there are two other options: 

(1) Become a non-practising member at a cost of about £170, which gives you the Journal, President’s circulars, and the right to attend and vote at General Meetings. This way you can keep in touch and still be a member of the Society.

(2) Simply be retained on the roll at a cost of about £65, for which all you get is an annual request for the retention fee.

As long as you stay on the roll you can apply for a practising certificate at any time, and the Society is assuming that a certain number who currently hold a practising certificate but do not at present need one, will not renew in the autumn when it falls due. The crucial date for liability for next year’s levy will be a date in December 2008, to be confirmed. All those who have a practising certificate on that date will have to pay the levy in 2009. (Solicitors intending to retire from practice should note that their practising certificate requires to be surrendered prior to the relevant date; it is not enough simply to retire from their firm.)

If more than 12 months elapse since the last practising certificate was held, s 15 of the Solicitors (Scotland) Act 1980 gives the Council discretion to refuse (hardly ever exercised) or impose a restriction from practising as a principal or being a nominated solicitor on a legal aid certificate (almost always done). That restriction is normally for a year.

Waiting for that traineeship

For those who find themselves currently unable to complete their professional training, Liz Campbell, Director of Education and Training at the Society, has this advice:

There is no time limit on the validity of an LLB degree. However, we do check that everyone coming into the profession has the up-to-date professional requirements in undergraduate subjects. If there has been a particularly long gap between degree and Diploma, there may have been changes in the professional subjects. Anybody in that position is advised to check with the Diploma provider they intend to apply to and the Education and Training Department.

The Admission as Solicitor Regulations set a time limit for commencement of a training contract of two years from 1 January in the year following the year in which the Diploma was completed (in other words a period of about two and a half years). However, it is possible to apply for a waiver of that regulation (reg 8). A first application for a waiver is considered administratively under delegated powers. In a waiver application, we would expect to see the reason for a training contract not having been commenced, evidence of seeking a traineeship if appropriate (for example, if somebody has been completing a masters degree or PhD, they would not have been looking for a traineeship), evidence of relevant work in the period since finishing the Diploma and evidence of their efforts to keep their knowledge of law up to date.

A waiver, if granted, will usually be for one year. Any further waiver application(s) will be referred to the Admissions Committee which would be looking for the same type of evidence. The committee may impose conditions in granting a waiver.

LawCare waits to support

“At LawCare during the last quarter we have noted a significant increase in the number of callers affected by the current economic climate,” says Trish McLellan, co-ordinator for Scotland and Northern Ireland, “all the more unnerving as all jurisdictions and types of practitioner have been afflicted.

“Our role is to support those dealing with the trauma of redundancy on both an emotional and practical level, and to try to ensure that the shock of the situation which individuals find themselves in, does not prevent them from thinking laterally, and using all available resources to secure alternative employment on appropriate terms.

“Despite the economic downturn and the inevitability of the situation, many people, lawyers particularly so, feel there is still a huge stigma attached to unemployment. Left unchecked this has the potential to lead to problems with self-esteem and self-confidence. Consequently those answering calls are fellow lawyers trained in telephone counselling skills and, where appropriate, can refer to relevant health professionals for counselling. Often the support of a lawyer volunteer who can provide additional ongoing support on a more personal level is suggested.

“We also have a wide range of helpful information materials.

“The service is completely confidential and free of charge.”

www.lawcare.org.uk

Freephone helpline 0800 279 68699