Irons in the fire

While city firms have tightened recruitment belts, Emma Vere-Jones finds that alternative work in the regions need not be the graveyard of ambition - and regional firms have been less affected by the city downturn

The first six months of 2001 was a great time for legal recruiters.

'If it had a head, two arms and two legs, then it got an interview,' says Penny Terndrup, director of EJ Legal.

But good times cannot last.

Even before the terrorist attacks on the US last September, there were signs that things were on a downward trend.

Soon the heady summer days were replaced by a winter of discontent.

Hiring freezes and caution on the part of law firms and their clients has led to a certain malaise in the recruitment marketplace.

'There is no doubt that 11 September did cause law firms to have a serious look at themselves,' says Scott Gibson, a manager at Hughes-Castell.

And, in an attempt to reassure potential candidates that they had plenty of work, 'some firms were purporting to have vacancies which they didn't really have', he adds.

There was hesitancy on the part of both firms and candidates during the second half of last year, particularly those at a more junior level.

'Many assistants felt it better to keep their heads down, wait for their bonus and then review things,' says John Garrett, a director at Garrett McCarroll Knowles.

But while times are definitely tougher, they are not as bad as the recession of the early 1990s.

'In the last recession, there was a knee-jerk reaction.

The hatchets came down and everyone was made redundant,' says Dominique Graham, a founder of Graham Gill, and a specialist in partner moves.

'Firms got rid of all their property lawyers - four years on there wasn't one to be found.'

This time around, Ms Graham maintains that firms are taking a more long-term approach to the downturn.

Practices with a good strategy are not going to make rash decisions she says.

'The acid test is that if there is any blip in the market, a firm with a good strategy shouldn't see many changes apart from a slowdown in growth.'

In-house recruitment has followed a similar pattern to that of private practice.

'A lot of organisations were suffering at the end of last year.

Everything was put on hold.

A lot of in-house departments held their breath to see how things would pan out,' says Mr Gibson.

However, things are slowly on the mend.

He says a good indicator is that 'the banks, although not going crazy, are hiring again'.

It is about the same level of work they had four or five years ago, he adds.

'The in-house sector has remained relatively unscathed in many areas,' agrees Melanie Butler, in-house specialist at Graham Gill.

'Certain sectors, such as pharmaceuticals and healthcare, are now looking at a period of growth.

Other sectors such as insurance, finance and travel have had to consolidate over the past six months, but many of these have now emerged with strong and adaptable legal teams.'

However, the recession has brought two types of candidates into the recruitment market.

'There are those lawyers who've been made redundant, and those who've had little work and are maybe sitting round feeling they're not getting the experience they want, or are worried that they don't have enough work to do,' says Fiona Bennett, business manager at Hays ZMB.

In periods where the workload is suddenly reduced, lawyers may have more time to reflect on their current situation and this can be the impetus for a move.

As work from the big City firms has slowed, medium-sized practices in the Square Mile and regional firms have been providing a greater proportion of recruiters' work.

Regional firms, which are less dependent on big-ticket, high-value work, have not been hit by the downturn to the same degree as their City counterparts.

And 'regional firms can cope better with pulling in the horns than City firms can,' says Keith Miles a consultant with Graham Gill.

Indeed, many regional practices have seen this as the opportunity to recruit aggressively top lawyers who may be having more difficulty getting work at City firms.

'They [regional firms] are saying, "let's get our hands on some of these elusive London lawyers", 'says Kirsty McLeod, a senior consultant at Hays ZMB.

Increasingly, recruiters are suggesting candidates consider work outside the City.

'It's partly a process of education - particularly if they've trained and worked all their life in London.

We have to explain that working outside London is no longer a graveyard for their career,' Ms McLeod adds.

Liz Neser, partner specialist at Graham Gill, argues that it is not necessarily a lack of choice that is convincing lawyers to move out of the City.

'Over the last few years, the gap between City and regional law firms has closed dramatically,' she says.

'The phenomenal success of the national law firms, together with the growth of prominent single-site regional firms, has helped dispel for ever the perception that big-ticket work is the sole preserve of City firms.'

Over the past six months, Graham Gill's partnership team has acted for an increasing number of City partners who are making positive career moves out of London.

'Rather than spelling a lack of ambition,' Ms Neser continues, 'a move out of the City can often kick-start a partner's career.

By moving to the regions, ambitious partners can enjoy earlier input into departmental and firm-wide strategy, with the potential rewards of rapid progression through the equity structure.'

Regional offices are now attracting strong lawyers, says Russell Bowyer, head of the technology media and telecommunications unit at Osborne Clarke's Thames Valley office.

Mr Bowyer, formerly a partner at Frere Cholmeley Bischoff (now part of Eversheds), worked in the City for 14 years before joining Osbornes in 1998.

'Do we regard ourselves as a step down? Absolutely not,' he says, adding that in the TMT [telecoms, media and technology] sector, most of the large service providers such as Microsoft and Oracle are based in the M4 corridor anyway.

'We've got some fantastic lawyers who've come from such firms as Herbert Smith or Slaughters,' he says.

The move has certainly been good for his career; he has moved from an IT department of three to heading a team at Osbornes.

Regional firms which can also offer quality work at cheaper rates because of lower overheads are now attracting larger clients.

Therefore, there has been a marked increase in the quality of work regional practices can now offer potential candidates.

'Some City law firms are responding positively to this trend,' notes Ms Neser.

'For example, Barlow Lyde & Gilbert's entry into the Oxford market should allow them to safeguard existing client accounts, by offering a more sophisticated range of fee options as well as attacking the lucrative Oxford market.

The calibre of lawyer we are recruiting for Barlow Lyde & Gilbert in Oxford is exactly the same as for its City office.'

The downturn has had another positive spin-off for recruiters.

Those who hunt merger partners or whole teams of lawyers as well as individual candidates have reported a significant increase in business.

'We're increasingly retained for mergers,' says Ms Graham.

'In this area, we were incredibly busy last year.' In the last recession, firms contended that big was not beautiful, she adds, but this time round practices are more actively looking for a partner to give added strength.

She warns that 'there's a danger of firms feeling vulnerable in these times to retrench and do a lot of navel gazing'.

Instead, such firms should be looking for constructive ways to bolster their practice.

'The cost of not merging can be losing major clients,' points out Ms Terndrup.

'Last year, there was plenty of activity,' she adds.

'For some firms it has been defensive mergers.

For others, it's been a wake-up call and now they're looking to move forward.

They're asking: "How can we lift off into the next tier?"'

The general feeling is that the next six to nine months will continue to be more and more active across the board.

Although there will be something of a time delay between increased work for law firms themselves and an increase in work for headhunters, the indicators are looking positive.

Hiring freezes have come off, and both the large UK and US firms are actively recruiting again.

'While we may have well stayed at home in January,' says Ms Terndrup, 'things are now looking up.

There is a thawing on the part of candidates as well as clients.

People are now starting to see that the world hasn't ended.'

Emma Vere-Jones is a freelance journalist