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Ian Roberts

02/09/2020 by Ian Roberts

The State of Play: Retention Rates & NQ Salaries

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A lot has happened since we reported on Spring retention rates in early March. Back then, while Covid-19 was clearly on the radar, nobody could accurately predict how the next six months would pan out. So, how has lockdown and the ongoing economic turmoil affected our leading law firms’ ability to retain the next generation?

Yours truly, for one, was expecting an absolute car crash in the run up to the Autumn retention rate season, and I’m delighted to admit that my prediction was overly pessimistic as the results announced to date indicate only a very minor deterioration. This holds for both large ‘City’ practices and national law firms.

In fact, one has to look very closely at the figures, and certainly consult a calculator, to see any difference between this autumn’s retention rates (85%) and the preceding three rounds – Spring ’19 (86%), Autumn ’19 (87%) and Spring ’20 (87%).

Scratch a little deeper and you’ll find that even this minor decrease of 1 or 2% depends on whether you count the offer of a fixed-term contract (FTC) to a newly qualified solicitor as a ’retention’ or not. If we chose to count an FTC as a retention, then there has been no fall in retention rates at all.

Honourable mentions:

Those performing particularly well include magic circle heavyweights, Allen & Overy and Slaughter and May, which both kept on 38 of 41 qualifiers (93%), Burges Salmon (29 of 30), Osborne Clarke (22 of 23) and Watson Farley & Williams (17 of 18).

Others British firms retaining at least 90% of their Autumn qualifiers include Ashurst (18 of 20), RPC (11 of 12) and Lewis Silkin (4 of 4).

US firms were well represented in the list of top performers with Covington & Burling (8 of 8) and Ropes & Gray (5 of 5) getting full marks and Latham & Watkins scoring an impressive 96% (23 of 24).

FTCs the order of the day?

In normal times law firms rarely offer fixed-term contracts to newly qualified solicitors; they have had two years to see their trainees in action and to work out whether they’re going to make the grade or not. But this year is far from normal, and while the number of qualifiers that have taken up offers of FTCs remain low, several firms have ‘retained’ at least one of their NQs on FTCs. Among them are magic circle firm Clifford Chance, City firm Stephenson Harwood, regional heavyweight Addleshaw Goddard and US firm Orrick, which offered FTCs to all 6 of its qualifying trainees.

What’s happening to NQ Salaries?

Should you be about to qualify at a large commercial law firm, the bad news is that several City firms have decided to cut NQ salaries with immediate effect.

Of the magic circle, only Freshfields have decided against cutting their NQ salary, while the others have all announced cuts of between 5 to 10%.

Other major players to announce a drop in NQ salaries include Norton Rose Fulbright, which has announced a cut of 5.5%, Reed Smith (12%) and Bryan Cave Leighton Paisner (12.5%).

While this will undoubtedly take a little gloss off for some NQs, we should remember that these law firms are simply reversing the significant hikes that they gave to their NQ salaries as recently last year, as we reported in our Autumn ’19 retention rate blog.

Looking ahead:

When you take a minute to consider everything that’s happened this year and the unprecedented economic impact of lockdown, this is a very positive set of results.

Now don’t get me wrong, tough times lie ahead, and those who have not been kept on are entering an extremely tough jobs market, but the fact that our largest law firms have chosen to retain NQs at essentially the same rate as the last two years is extremely encouraging.

It will be interesting to see what happens to those NQs who have accepted offers of fixed-term contracts and we will, of course, keep a close eye retention rates in the run up to March.

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Filed Under: Market Focus

27/02/2019 by Ian Roberts

Slaughter and May leads the way with impressive spring retention score

This is the first of our seasonal retention round ups as firms across the UK announce which of their trainees will be staying on as newly qualified solicitors. We tend to find that firms that reveal their scores early do so because they are keen to spread the good news, and this year is no exception.

It’s spring retention season and the early birds have already announced their latest retention scores. Earliest bird of all, as ever, was Mayer Brown, so let’s start with them. The firm posted its results before the Christmas trees were even up, revealing that all four trainees had accepted NQ positions starting in March. The firm’s full marks this round is an improvement on the eight out of 10 score it recorded last autumn.

First out of the blocks of the magic circle outfits was Slaughter and May, no doubt pleased to tell the world about its 97% score. Only one of its 35 March qualifiers is leaving the firm, a slight improvement on its already impressive 95% this time last year and 86% return last autumn.

Not shy of patting itself on the back, a spokesman commended the firm for keeping in line with previous years before adding that “we would like to congratulate all of our newly qualified associates”.

Slaughter and May is top dog so far of those magic circle firms to have announced, ahead of Clifford Chance’s 90% (46 out of 51) and Allen & Overy’s 83%. Clifford Chance has 51 trainees qualifying this spring, of which 46 will be staying on as NQs. This is an uplift from the Canary Wharf-based firm’s 77% last autumn and only a tiny dip from its 92% score in spring 2018. Clifford Chance takes the second most trainees each year, currently 95 to Linklaters’ 100.

Thirty-nine of Allen & Overy’s 47 qualifiers are staying with firm, giving it a score of 83%, which is in line with recent figures of 80%, 82% and 85%. Not stellar results, but consistent and highly acceptable nonetheless.

Linklaters and Freshfields have yet to announce and we await their results with interest.

Elsewhere, City firm Stephenson Harwood has proudly confirmed that all eight of this season’s qualifiers will continue their careers with the firm. Training partner Neil Noble was keen to emphasise that the firm continues “to place great importance on forming a strong pipeline of talent, as part of our ambitious growth strategy”.

Boston-based outfit Ropes & Gray is the first of the US firms to reveal its London spring retentions. The big news though isn’t that it is keeping on two of its three qualifiers (67%) but what that pair will be earning as NQs. They will start on a healthy £120,000, a rise of 4% that puts them in line with contemporaries at US competitors such as Davis Polk & Wardwell, Cleary Gottlieb Steen & Hamilton and Sidley Austin. The firm kept on all six of its qualifiers last autumn.

That’s it so far. We will post an update as and when the rest of the top firms release their figures. As always, we will be keeping a beady eye out for firms trying to hide poor results from media scrutiny.

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Filed Under: Market Focus

19/02/2019 by Ian Roberts

Staff well-being should be a law firm’s top priority

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Firms that focus on the well-being of their staff and partners are the ones that will increasingly attract and retain the top legal talent over the coming years. But what exactly falls within the definition of “well-being” and are firms currently doing enough?

It’s not exactly news that being a lawyer is stressful. On International Mental Health Day last October, The Times ran an article specifically about mental health and lawyers, saying: “While mental illness can strike anyone at any time, lawyers in high-stress positions are thought to be particularly prone to it.” This is due, says the article, to the fact that lawyers tend to be highly ambitious perfectionists who carry a lot of responsibility.

That’s not to say it is only those at the top of the legal tree with the most responsibility who are feeling the strain. A survey of junior lawyers by the Law Society’s Junior Lawyer’s Division (JLD) last year revealed that 82% of those surveyed felt regularly or occasionally stressed and 26% felt extremely stressed.

Most tellingly of all, two-fifths have looked for another job as a result of stress levels at their current job. Kayleigh Leonie, the JLD’s Law Society council member, said of the results: “The legal profession is at risk of losing some of its best talent if employers do not begin to embrace their employees’ well-being as a key asset for their business.”

Alarmingly, many junior lawyers feel unable to ask for help, thinking it will be perceived as a sign of weakness. As the Times reports: “One of the many privileges of being at the top of the hierarchy is that support is on tap if things get tough. More junior staff might not feel so empowered.”

Some firms are heeding the calls to do more on mental health. Reed Smith, for example, last year launched ‘Wellness Works’, a firm-wide programme aiming to promote and support the well-being of its lawyers and staff.

According to Deloitte’s latest human capital trends survey, wellness is one of the top three trends shaping human capital. “As the line between work and life blurs, providing a robust suite of well-being programs focused on physical, mental, financial, and spiritual health is becoming a corporate responsibility and a strategy to drive employee productivity, engagement, and retention,” the report says.

There are some interesting points from the above quote and the report in general that law firms would be well advised to take note of:

Work-related stress is on the rise

Work-related stress is nothing new, but it is getting worse. This is largely due to the relentless pace of business today, driven by the always-on nature of digital devices and round-the-clock working styles. The endless stream of emails and messages means people find it virtually impossible to disconnect from their job, even on holiday. This is especially true of lawyers.

Well-being is not just about mental health

It is easy to think of well-being as being only or mainly about mental health, but it goes deeper than this. Deloitte lists “financial wellness, mental health, healthy diet and exercise, mindfulness, sleep, and stress management, as well as changes to culture and leadership behaviours to support these efforts” as falling under the wellness banner. To focus solely on mental health is partly missing the point. For example, research has found that student loan support is one of the most highly regarded well-being benefits for young people. Another is the opportunity to work as a volunteer during company time.

There is a substantial gap between what employees value and what companies offer

Deloitte says that two-thirds of organisations claim that the well-being of their staff is a vital part of their culture and brand. They recognise that it is a crucial measure of their ‘corporate citizenship’. We don’t have figures for law firms, but we would estimate that among the top firms most, if not all, would say staff well-being is an important issue.

What’s interesting is that there is a substantial gap between what employees value and what companies offer. For example, Deloitte cites the fact that 86% of employees would prefer a flexible schedule yet only 50% of companies offer one. Designated office space for wellness is valued by 70% of employees yet only 27% of firms offer it. There are similar discrepancies in relation to mental health counselling, the provision of healthy snacks, and reimbursement for well-being expenses.

Providing well-being benefits is an investment, not an overhead

Organisations that baulk at the potential cost of providing these well-being benefits are missing out. The report states: “There is growing evidence to support the idea that well-being drives performance. Research shows that the costs of lost productivity are 2.3 times higher than medical and pharmacy costs.”

Furthermore, a survey by Deloitte of major organisations has revealed that:

  • 43% believed that well-being reinforces their organisation’s mission and vision;
  • 60% reported that it improves employee retention;
  • 61% said that it improves employee productivity and bottom-line business results.

The upshot is that firms should make well-being a top priority because it is an expected trade-off for the 24/7 nature of work and is the right thing to. But if those aren’t reasons enough, there will be real benefits for their productivity, talent retention and, ultimately, their bottom line.


If you would like to take the next step in your legal career, or if you are looking to hire solicitors at NQ to 2 PQE, register now with NQ Solicitors or call 020 3709 9165 to find out more.

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Filed Under: Working Life

12/02/2019 by Ian Roberts

Law firms should be thinking more about social mobility than fit when hiring junior lawyers

Social mobility ought to be a top priority for law firms if they want to attract the best employees and help create a more diverse, innovative profession. 

As a recruiter, one of the words I hear regularly from hirers when recruiting junior lawyers at NQ to 2 PQE is ‘fit’. Will the potential hire be a good fit? How will they fit in with other junior lawyers at the firm?

To my mind, this is code for, “Are they one of us?” It is this type of thinking that leads to firms recruiting identikit lawyers who share the same background in terms of class, upbringing and education.

If you don’t fit the mould, there are invisible barriers that can reduce your chances of being employed by certain firms or even entering the profession at all. This is regardless of your abilities.

This type of blinkered thinking is not exclusive to lawyers. It crosses all sectors and has resulted in the UK being one of worst countries in the 37-member Organisation for Economic Co-operation and Development (OECD) for “social mobility”.

Social mobility is usually measured through income or social class. According to the Sutton Trust, a foundation set up to improve social mobility, income mobility compares parental income to the adult earnings of their children. Social class mobility examines whether individuals are in the same or different social class to their parents.

The goal is to break the link between someone’s parental background and the opportunity for them to reach their full potential in terms of income and occupation. A report by the Sutton Trust last year revealed that a small increase in the UK’s social mobility (to average western European levels) would add £39bn to the UK economy.

My comments at the start of this blog are certainly not true of all law firms. In fact, the profession dominated the 2018 Social Mobility Employers Index. This index “ranks Britain’s employers on the actions they are taking to ensure they are open to accessing and progressing talent from all backgrounds”.

Fourteen law firms were named in the top 50, with Bryan Cave Leighton Paisner (BCLP), in fourth place, the highest ranked. Others in the top 20 included Baker McKenzie, Linklaters, Herbert Smith Freehills, and Freeths. BCLP partner Tim Smith said of his firm’s placing: “It’s fantastic to have recognition for our approach to social mobility, which is opening up a broader and more diverse pool of talent. We know that diversity drives innovation, which is a key differentiator in the legal market.”

This focus on the benefits of diversity is a theme picked up by Jonathan Andrews, a lawyer at Reed Smith who in December was named Rising Star of the Year at the UK Social Mobility Awards 2018.

“When you encounter people who come from different backgrounds and have different views, it means they’re able to share their unique perspective,” he says. “If there is a particular strategy that you want to use, or a particular marketing or branding issue, you can make it more inclusive and relatable to a broader range of people by having those people in on the conversation. These are all really important in business to get your measures across.”

Jonathan, a trainee solicitor at Reed Smith, who was diagnosed with autism at the age of nine, went to his local comprehensive school before reading English at King’s College London. He followed this by studying at Cambridge University through the Queen’s Young Leaders programme.

He credits Reed Smith for recognising the importance of taking on people from diverse backgrounds, particularly those who think differently or have different experiences to contribute. “They launched a Disability Task Force in 2012, now called LEADRS, where people who have a disability can network and share their experience and understanding,” he said. “They recognised that it was a barrier that existed and worked hard to create a level playing field, so they were the firm for me.”

Other firms committed to improving social mobility have signed the government’s Social Mobility Pledge. This is an initiative launched by Conservative MP and former education secretary, Justine Greening. The pledge includes a promise to “adopt open employee recruitment practices which promotes a level playing field for people from disadvantaged backgrounds or circumstances. This could include a ‘name blind’ approach to considering applications (replacing names with numbers) or adopting contextual recruitment practices.”

There is no doubt the legal landscape is changing. AI is the disruptor on most people’s lips but one that could have an equally important impact, certainly from a hiring point of view, is social mobility. It will certainly be interesting to see how this is reflected in the recruitment of junior lawyers over the years ahead.

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Filed Under: Recruitment Advice

05/02/2019 by Ian Roberts

Is AI a blessing or a curse for junior lawyers?

Junior lawyers and paralegals have been described as an endangered species due to the rise of artificial intelligence (AI). But how true is this? In this blog, we consider the possible impact of AI on junior lawyers and ask whether its emergence is a blessing or a curse.

There’s a chilling quote in a recent paper by professor of law, John Flood. “In all probability elite big law firms will retrench to a model closer to the nineteenth century one,” he says. “There will be a small number of partners and a large cohort of mostly underqualified or uncredentialled clerks who have little or no possibility of rising through the firm.”

This, says Flood, who is professor of law at Griffith University in Australia, is because AI is now able to carry out jobs that involve high degrees of repetition and relatively simple processes. The result is that junior associates and paralegals are an “endangered species” and if they are culled from firms there will be no career path to partnership.

Last year, a report by the Law Society predicted that jobs within the profession will be “increasingly affected by automation of legal services functions”. It estimates that by 2038 total employment in the legal sector could be 20% less than it would otherwise have been, with 78,000 fewer jobs.

AI is already having an impact at some firms. In a recent interview in Legal Cheek, Travers Smith’s finance partner and co-head of graduate recruitment Danny Peel explained how AI products benefit the firm: “It might previously have taken several hours of intensive work to bring a 300-page loan agreement precedent to a point where you can start tailoring it to the transaction in question,” he said. “But with this software the same process can be completed much more quickly. Technology has been transformative — sometimes saving hours of time, making life easier for our lawyers and helping keep our clients’ costs down.”

This all sounds rather dispiriting for aspiring lawyers, but there are two sides to every coin and from another perspective AI can be seen in a different light.

For one thing, despite the fact that 85% of law firms of all sizes say that automation is important, according to a recent report in The Times, only 20% of UK law firms have actually invested in AI to date. It seems that those firms that are adopting AI are largely those from the top end of the market. A survey last year revealed that two thirds of the 30 largest UK law firms were conducting paid work using AI.

Interestingly though the report in The Times also revealed that firms were focusing on three core areas for AI: time recording for billing, improving budgeting accuracy, and identifying opportunities through “relationship mapping”.

In other words, for the most part the focus at the moment seems to be away from automating legal work currently done by people. This is despite the fact that AI already has the capability to transform the provision of legal services. Areas in which it is already making a difference include:

  • Document review by using keyword analysis.
  • Legal research by identifying relevant cases and legal precedents.
  • Discovery by scanning huge amounts of data digitally.
  • Contract creation, review and management by scanning contracts in a matter of seconds and interpreting loan agreements. JP Morgan now has a programme that it claims will save 360,000 legal and compliance man hours a year.
  • Predictive analytics by analysing historic data from case law, judges’ rulings, the legal strategies of opposing counsel and winning arguments and determining the likelihood of their claim succeeding. LexisNexis’s product Lex Machina is one such example and is already widely used in the US.

These are just some of the ways AI can and already does improve lawyers’ lives, undoubtedly for the better. The important thing when looking at this list is to recognise that AI is merely an aid. Many remain steadfast in their belief that AI cannot replace a lawyer’s critical skills: the ability to provide strategic advice in complex cases and to understand and respond to a client’s needs.

Rather than seeing AI as a threat, lawyers should welcome it. AI can eliminate some of the mundane, time consuming aspects of the job, freeing them up to apply their legal skill and expertise at a more advanced level (and at a higher chargeable rate).

This is something even Professor Flood recognises in his paper, despite his seemingly pessimistic prediction for the profession. He concludes that the relationship of trust between client and advisor will become critical, something no machine can ever replicate.

“Trusted advisors and trusted brokers will be in high demand in a world wracked with populism and nationalism; someone must be able to communicate over these boundaries and connect with those on the other side,” he says. “Lawyers, because their basic tool is language are ideally suited for these roles.”

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Filed Under: Working Life

29/01/2019 by Ian Roberts

The new SQE – a disaster for aspiring solicitors or a bright new dawn?


In our first blog about the new Solicitors Qualifying Exam (SQE) we asked whether it will meet the SRA’s goals of driving up standards, reducing costs to students and creating a more diverse profession. In this blog, we look at the new ‘super-exam’ from the viewpoint of aspiring solicitors and ask five key questions to determine whether it represents a bright new dawn or is a disaster in the making.

No one knows yet exactly how the new SQE rules will play out as many of the details are still being resolved. This hasn’t deterred us though from answering five key questions of keen interest to would-be trainees. Some of what follows is speculation based on what we know so far, which we will be updating as more information emerges.

1. Is this the end of the training contract?

Well, yes and no. Technically, students need ‘work experience’ rather than a training contract and firms no longer need to be registered with the SRA as training providers.

There are four ways a student can gain working experience: as an apprentice or paralegal, at a student law clinic, through a sandwich placement or, yes you guessed it, through a training contract.

Given the law’s reputation for being slow-moving, one might expect that the good old training contact won’t be disappearing any time soon. However, we have heard that many large law firms are looking at ways of significantly reducing the cost of recruiting and training lawyers. Firms are said to be seriously considering taking on aspiring lawyers as apprentices or paralegals rather than trainee solicitors and cutting the salaries paid accordingly.

On the flip side, one could argue that the most prestigious law firms will use the promise of a traditional training contract (and commensurate salaries) as a way to attract the best trainees.

That will almost certainly not be the case for smaller or high street firms, many of whom may ditch formal training contracts entirely. We can see a situation where students will gain sufficient work experience at different practices to satisfy the two-year rule, at the end of which they will take SQE2 on a self-funded basis in order to qualify.

2. Will the SQE change when trainees are recruited?

We think it is likely that many law firms will decide to delay their recruitment until after an aspiring lawyer has completed SQE1. However, the timing of the recruitment process from a would-be trainee’s point of view may well depend on whether or not SQE1 forms part of their undergraduate law degree. While many universities will be keen to include SQE1 as part of their course, some may prefer to continue to teach from an academic point of view rather than a vocational one and not include it.

3. Will it cost students more to qualify or less?

There is still plenty of uncertainty over the combined cost of SQE1 and SQE2. However, we have heard that the estimated combined cost of £3,000 – £4,500 may be a little lower than the final outcome.

If one assumes that large commercial law firms will continue to offer traditional training contracts, (regardless of whether these aspiring lawyers are called apprentices, paralegals or trainee solicitors), then it doesn’t really matter to these trainees whether it costs more or less, as the law firms will continue to cover the cost.

What will matter to these trainees, is whether they are remunerated as well as trainees under the current system. And, whether they are asked to cover the cost of SQE1 if law firms, as we suspect, decide to delay their trainee recruitment until after this paper has been completed.

For those aspiring lawyers who would previously have needed to self-fund the LPC and will under the new system gain the required experience without the benefit of a ‘training contract’, then the process will almost certainly cost less than under the current system. (As things stand currently, students can pay upwards of £16,000 to undertake a year-long course without any guarantee of a training contract at the end.)

The greatest benefit to those looking to qualify without a formal training contract is that by splitting the exam into two parts we should avoid a situation where it is possible to pass the LPC and then fail to land a training contract. Having said that, students will need to consider the pass rates for both SQE1 and SQE2 and the cost of retaking the exams. What they won’t want to do is pass SQE1 and gain the necessary work experience, but then fall at the final hurdle by being unable to pass SQE2.

4. Will firms give trainees time off to prepare for SQE2?

As we have said, SQE2 is likely to be taken at the end of the two-year work experience. This is a major shift from the current system whereby trainees complete their exams before their training starts. It means in practice that trainees will either need to take time off from work to study or do so in their spare time. In this respect, the system will be similar to the way doctors and accountants do their final exams.

We see a giant red flag here. Will firms give trainees the time off they need? Or will trainees be expected to cram in studying and exams around what might for some already be a crushing workload?

5. Will SQE improve a trainee’s chances of landing an NQ role?

Some critics have suggested that SQE will shift the current training contract bottleneck to the point of qualification. The thinking is that firms currently limit the number of trainees they take on for two main reasons. First, because of the salary commitment; it has been estimated that it costs City law firms around £400,000 to train someone to NQ level. Second, because they know that at the end of the two years training contract they are expected to keep on as many trainees as possible. In other words, they keep an eye on their all-important retention rates as they know these influence their ability to attract the best candidates.

We can envisage a situation where firms take on a vast number of graduates onto their ‘training programme’ at paralegal-level salaries. Graduates will be happy to do this in order to satisfy the work experience requirement. Firms will then pick and choose their NQ solicitors from those who pass SQE2 at the end of the programme.

If this happens, larger commercial law firms may move to a situation closer to the way the big accountancy practices work. People may join as relatively poorly paid trainees, with a lower expectation of being kept on after qualifying. Concern over retention rates will be a thing of the past, which could lead to a glut of NQs seeking alternative employment every year.

Conclusion

Clearly, there is plenty of speculation at this stage about how SQE will operate and the SRA and its chosen exam assessor, Kaplan, are still working out all the details. As such it is too early to say where the SQE places on the ‘disaster’/‘bright new dawn’ scale. That said, as you can see from the above, there are a number of concerns and it would be helpful if the SRA would address these sooner rather than later as we edge closer to the introduction of the SQE in 2021.

We will update you with further news and additional thoughts in due course.

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