We saw many firms enter 2024 with cautious optimism. Macro-economic factors continue to add cost pressures, implications of a new government create uncertainty, a stronger focus on commerciality persists and the need to employ technology to work smarter heightens.
Although volatility across the economy means law firms need to be ready to adapt as demand fluctuates and client expectations grow, there is a huge amount of opportunity, especially across the transactional, financial and regulatory markets. The UK continues to be the epicentre for international trade evidenced by the rise in cross-border legal work. “The vast majority of UK-based clients (79%) have international legal needs, allocating between 30-40% of their legal budget to international work…almost all large companies (those with £3bn or more in annual revenue) have cross-border work to allocate” (Thomson Reuters: 2024 report on the state of the UK legal market).
With this in mind, what trends are we seeing across the legal job market in the second half of 2024, and what should law firms and in-house teams plan for?
Growth remains steady
Although law firms and in-house teams continue to experience internal cost pressures and sustained client demands, fee growth despite a fall in chargeable hours, remains steady. According to the 2024 Financial Benchmarking Survey report by LLP Hazlewoods, which collects financial data from approximately 147 law firms across England and Wales, “three-quarters (73%) of firms reported year on year growth in fee income" and “a third (34%) of firms saw growth of over 10%” (The Law Society: Financial Benchmarking Survey 2024).
Clients want business partners, not just legal advisers
As businesses continue to battle geo-political uncertainty, cost cutting and increased regulatory scrutiny, clients are looking for greater commercial advice.
Lawyers who have commercial acumen and are able to provide legal advice in light of market conditions, growth opportunities and business risk, are not only in-demand but are what clients now expect. Research shows that clients expect law firms to be strategic business partners, not just trusted legal advisers. Respondents to a survey conducted by Thomson Reuters cited commerciality as a priority with one client commenting, “The commerciality of the lawyers in the firm is an advantage for us because they provide advice that enables us to turn a profit. Also, they offer value for money because they are competitive with the rates” (Thomson Reuters: 2024 report on the state of the UK legal market).
Generative AI is transforming working methods
Whilst generative AI remains at a developmental stage for law firms, it remains a key driver for increased productivity, enhanced efficiency and potential cost savings for legal teams. Many legal teams are using it to automate routine tasks such as contract analysis and legal research, improve accuracy and streamline processes, all helping legal professionals to save time and focus on more complex and strategic work. Reuters report, “two-thirds of UK corporate legal staff [indicated] that they feel positive about its impact” (Thomson Reuters: 2024 report on the state of the UK legal market).
The integration of technology can also play a vital role in legal cases, with some professionals using it to anticipate arguments from the opposing side and analyse past cases to help predict the outcome of current legal proceedings.
It’s no surprise then, that legal employers are looking for professionals with a good understanding of AI and generative technology tools, not only for working practices but also to be able to advise clients on AI-related legal matters.
Legal teams who do not take the time to understand the impact, opportunities and risks of AI will clearly lose out to more forward-thinking legal competitors.
Demand is high for specialised roles
There is a high demand for solicitors who specialise in employment, technology and construction law. From our conversations with law firms, we know that many are looking for legal talent with expertise in commercial contracts, commercial disputes and data protection, and the change in government has driven a strong need for employment lawyers.
There is also an increase in corporate equity and M&A legal roles given the volume of activity in this market, with research predicting corporate transactions will likely pick up throughout the rest of the year.
Strong focus on Sustainability
The growing importance of sustainability for businesses has resulted in many seeking legal advice on sustainability operational matters.
According to Reuter’s report “five times more in-house legal professionals [cited] ESG as a priority last year compared to the prior year” (Thomson Reuters: 2024 report on the state of the UK legal market). Whilst governance has always been part of the General Counsel remit, growing legislation around climate change, diversity, equity and inclusion and, labour and employment, mean that companies need specific legal guidance to ensure compliance.
Adoption of interim lawyers
Due to economic and political uncertainty, there are cases where law firms and in-house teams are hesitant to hire permanent lawyers and so interim professionals are currently in-demand. Fluctuating workloads, cost pressures and changes in client cases mean that more employers are using interim lawyers as a way to maintain legal capabilities without long term commitments.
Although perhaps not the best employment option for professionals looking for security and stability, interim work does provide flexibility, a high earning potential and the opportunity to learn new skills. It’s also useful for those considering their career options and a potential move into a new legal role or sector, providing trial periods before an offer of permanent employment.
People want flexibility
Legal professionals are increasingly looking for more control over their careers and personal life. With concerns around burn out and cases of severe stress documented across the profession in recent months, it’s no surprise that professionals are asking for law firms and in-house employers for more understanding around the importance of a realistic work-life balance.
From the professionals our consultants speak to and published surveys, we know that many people would be willing to take a lower salary if they’re offered a hybrid working model that provides working conditions that align to personal lifestyle needs. This isn’t just about hybrid working, but requests for flexible hours, compressed working weeks and the option to work in different locations.
If you’re looking to grow your legal practice or in-house team, or would like information on the market don’t hesitate to contact our legal recruitment consultants who can offer strategic advice and support.
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