Half of UK commercial law firms halt recruitment as credit crunch takes its toll

The pause comes after years of phenomenal growth and revenue generation in the legal sector

47% of the UK’s top commercial law firms say they are to decrease or keep staff levels on hold over the next year reveals research conducted by cvmail, a leading provider of web-based recruitment solutions to professional services firms. cvmail is part of Thomson Reuters, the world’s leading source of intelligent information for businesses and professionals.

Although only 8% of law firms polled by cvmail say they will actually cut headcount this does represent a notable pause in the phenomenal growth that the Top 100 law firms have experienced over the last decade.

Says Andy Eddleston, Commercial Manager at cvmail:

“The credit crunch has meant a slowdown in corporate finance, private equity and commercial property work for commercial law firms. However, commercial law firms will be much more cautious about cutting head counts than the banking community as they will be hoping to pick up more litigation, insolvency and employment law related work that is expected to be a by-product of the credit crunch.”

City law firm Reynolds Porter Chamberlain points out that litigation work is already on a rise with the number of High Court commercial law cases jumping 25% in 2006 (latest figures available) to 61,691 after six years of decline.

cvmail indicates that with their poll showing that the Top 100 law firms have an average attrition rate for staff of 11% even those law firms that are imposing headcount freezes will still need to be very active recruiters this year.

The cvmail research found that attracting a better quality of candidate would remain a high priority for 89% of law firms polled. 58% also said that controlling recruitment agency costs would be a high priority over the next year.

The research found that the average percentage of a hire’s salary going to the recruitment agency in fees is 20% for law firms. The highest percentage paid was 30% and the lowest 11%.

Comments Andy Eddleston:

“Over the next year HR departments will face a difficult task of both improving the quality of their hires whilst reducing their non-wage recruitment costs.

HR departments may be looking to make their savings from agency fees or advertising but just as importantly they will be looking to improve and slim line their own internal recruitment processes.

cvmail’s research found that the central role of recruitment agencies in sourcing legal professionals seemed secure with 85% of law firms saying that they get their most appropriate and best quality candidates from recruitment agencies. However, with the high margins that recruitment agencies command, HR departments will look to take more control over their recruitment.

Our research reveals a trend for law firms to make more use of internet based channels that they can control to draw talent into law firms.”

29% of law firms say that their own website will be an important or very important medium for communicating jobs in two years versus 21% now.

6% of law firms say that social networking sites will be an important or very important medium for communicating jobs in two years versus just 1% now.

The research also found that:

HR departments at the leading commercial law firms say that complying with employment law is their biggest concern over the next year with 92% rating it as a high concern. UK commercial law firms have typically attracted high levels of adverse publicity when they have been accused of breaching employment laws such as sex and age discrimination.

On average, law firms receive 52 CV’s for every vacancy, conduct 8 first stage interviews and 3 second stage interviews.

Top Law Firm Recruitment Priorities

Rank	Over the next year what is the biggest priority for your recruitment function:
Thomson Reuters business survey
1	Ensuring compliance with employment law	92.3%
2	Attracting a higher quality of candidates	88.5%
3	Controlling recruitment agency costs	57.6%
4	Achieving headcount targets	50.0%
5	Recruiting candidates within agreed wage band	46.2%
6	Controlling advertising costs	38.4%
7	Reducing time to hire	38.4%

ENDS



Note to Editors:

cvmail is an automated e-based recruitment solution. Acquired by the Thomson Corporation, now Thomson Reuters, in 2007, the service has a diverse professional services client base, including top 100 law and accountancy firms, throughout the United Kingdom and Asia-Pacific.

Thomson Reuters is the world’s leading source of intelligent information for businesses and professionals. It combines industry expertise with innovative technology to deliver critical information to leading decision makers in the financial, legal, tax and accounting, scientific, healthcare and media markets. With headquarters in New York and major operations in London and Eagan, Minnesota, Thomson Reuters employs more than 50,000 people in 93 countries. Thomson Reuters shares are listed on the New York Stock Exchange (NYSE: TRI); Toronto Stock Exchange (TSX: TRI); London Stock Exchange (LSE: TRIL); and Nasdaq (NASDAQ: TRIN). For more information, go to www.thomsonreuters.com.