2022 to witness battle for talent in the legal sector as 85% of UK law firms plan to increase staff numbers – survey reveals

• Survey of UK Law firms shows increased sector recruitment driven by growth plans and new service offerings
• Firms in bidding wars to secure best employees as talent pool shrinks

A new national survey from MHA, the top 12 accounting group, has revealed that 85% of UK law firms are planning to increase staff numbers in 2022 and a resounding 93% of UK firms are not currently planning to make any staff reductions.* Consequently, this year will see firms embroiled in bidding wars for new employees, with average salaries across all ranks rising by 5% at a minimum to attract new talent and to adapt to higher inflation.

The legal sector’s recruitment drive is predominantly the result of UK firms expanding their current services in 2022, particularly regulatory services due to an increased regulatory environment across such sectors as professional discipline and data security. Beyond this, property litigation is a major growth area as more clients look to invest in real estate as part of their private wealth and retirement plans. Contentious probate services are also seeing strong demand as clients become more aware of how to challenge the contents of a will.

However, the sector is also seeing a diminishing pool of prospective employees which is contributing to a very competitive labour market and increased wages in 2022. Many employees at UK law firms have been switching sides and going in-house for greater job-security and more flexible working patterns, while others have changed careers and left the sector altogether during the pandemic to find less stressful and demanding jobs.

Salaries were already trending upwards in previous years. The survey found that in 2021, the cost of employing a fee earning lawyer ranged between £85k and £105k up from between £82k and £95k in 2020. The pace of change is only likely to increase in 2022. Law firms may need to conduct two pay reviews during the year just to keep up with staff expectations.

The survey also revealed firms plan to get ahead in the talent war by offering employees a more flexible working experience. Ninety six percent hope to offer some form of agile working to their staff, where home and office working can be combined. There is also a real push to be more accommodating of flexible hours and part-time contracts. Some firms plan to go further to attract talent, with 31% intending to redesign their office space along more modern lines. These firms are looking into open plan offices as well as implementing hot-desking.

Karen Hain, Head of Professional Practices at MHA, said: “Our survey results show that the majority of legal firms across the UK have come through the hiring difficulties posed by the Covid-19 pandemic of the last two years, and are now set to significantly ramp up recruitment in line with expansion plans and new service offerings.

“While it’s highly positive to see many firms are executing growth plans in 2022, this year will be a challenging environment for recruitment with many already leaving the sector or starting new roles that provide higher salaries or more flexible working packages. In an environment where the talent pool is shrinking, firms will see a bidding war for fee earners as upward pressure on wages increases.

“To best position themselves to retain and attract the best talent, firms should undertake staff surveys and review competitor offerings to understand what is important to employees and create dynamic employment packages, rather than simply focus on a salary increment. Firms should also consider concrete steps such as ensuring client charge out rates are reviewed in relation to salary rate increases, and take simple steps to reduce overheads such as adopting greater automated internal systems to add further money to their recruitment pot.”