On the lookout

Recruitment of solicitors is a hot topic, with rising salaries and the growth of headhunting firms.

jessica smerin looks at the us influences involved and how the regions are benefiting

Attention in the recruitment market is currently focused on solicitors who have been qualified for between one and five years.

In the present corporate boom, there is an urgent need for assistants - often described as firms' lifeblood, footsoldiers or deal fodder - to work the treadmill of back-to-back transactions.

But while young corporate lawyers are excited by the staggering salaries now being offered, there is a growing scepticism towards what is commonly called 'blood money'.

London offices of US firms may, on average, be offering 78,000 to a newly qualified solicitor on the most recent figures, but many are scared to accept it for fear of what is expected in return.

The result is a dearth of young lawyers in the sectors where they are most needed.

This includes all areas of commercial law apart from litigation, with particularly strong demands in banking, corporate finance and IT.

US firms are attempting to use London as their base for breaking into the European legal market, and accountancy practices remain committed to developing captive law firms.

Both sectors have aggressive recruitment strategies, with both US firm McDermott Will & Emery and KLegal - the legal arm of Big Five accountant KPMG - recently announcing their decision to grow organically to 500 fee-earners within five years.

Consequently, the recruitment market is buoyant but highly pressurised.

On the other side of the Atlantic, US firms are being put under stress by high-profile defections to dot-com companies.

This pressure is feeding through their London offices to magic circle firms, and from them through the City to the regions.

Even recruitment consultants themselves are feeling the effects of marketplace uncertainty and a new culture of disloyalty.

Two leading agencies, ZMB and QD Legal, have recently lost key players.

Founding partners Stephen Rodney and Adrian Fox left QD to set up their own headhunting consultancy, and 70% shareholder Gareth Quarry last month sold out to international recruiters TMP Worldwide.

Mr Quarry remains with TMP in a senior role.The growing acceptance of headhunting - or executive search - is a reflection of the Americanisation and mobility of the legal marketplace.

Many US firms and accountants effectively have their own in-house headhunters in the form of new recruits, who are encouraged to telephone their friends and persuade them to join the team.

Some are reported to be receiving bonuses for their efforts.

Recruits to US firms can also get a joining bonus of up to 40% of their first year's salary.

Headhunting is particularly important to firms which depend on the recruitment of well-known partners to bring in droves of assistants.

KLegal has been particularly successful in this respect, with the recent recruitment of rainmaker Nick Holt from US firm Weil Gotshal & Manges along with a host of other top partners.

Mr Fox, whose new consultancy Fox Rodney Search focuses on hiring people at partner level, says: 'To build a powerful practice from scratch, it's crucial to have a really credible strategy, not just large amounts of dosh.

'The strategies of US firms and accountants are being more and more closely scrutinised by City partners,' he adds.

'Assistants invariably follow the leads of these partners.

If you haven't got top names, you're unlikely to attract the names of the future.'

The assistant salary spiral started earlier this year at a small law firm in Silicon Valley in the US, which hiked salaries to $125,000 (80,000).

Other west coast firms followed suit and were soon followed by the big boys on the east coast, especially in New York.

Unsurprisingly, when the wave continued its eastward course and crossed the Atlantic in April, it happened at Clifford Chance, the only top-ten firm to have merged with a US practice.

The firm raised its pay for newly qualifieds by 27%, from 33,000 to 42,000.

It was quickly copied by the rest of the top-ten firms, while those beneath, which are often unable to match that level, have also had to respond with a variety of packages of financial and other benefits.

The City is not matching the salaries offered by US firms, but the current going rate of 42,000 for newly qualifieds - according to a survey last month by recruitment agents Michael Page Legal - puts the difference between the top tier and other City firms at as much as 5,000 for newly qualifieds, rising to approximately 20,000 at four years' post-qualification experience.

QD's recent survey of lawyers' motivations showed that money was the main reason for solicitors to switch jobs; but despite the money on offer, assistants take a passive attitude towards recruitment.

They may be placing their details anonymously on the new on-line recruitment sites now offered by several leading recruitment agencies, which are aimed at attracting young and IT-literate lawyers, but they are aware of their strong position and cautious about taking the heavy pay packets on offer.

There is a strong perception that firms offering these salaries are sweat shops - it came as no surprise when some firms that had raised their salaries began to do the same with billing targets.

The issue of US-imported bonuses in private practice - fast becoming the norm as profit-related pay is legislated out of existence - is also thorny.

Some City firms are now offering one-off bonuses of up to 30% of salary for certain practice groups.

Young solicitors are worried about what parts of themselves they might be expected to sell in order receive the money.

Trevor Goode, the chairman of the London branch of the Young Solicitors Group, is an assistant in the planning and environment department of City firm Berwin Leighton, which was one of the first mid-sized City firms to sense the way the wind was blowing.

First it announced that a bonus scheme hitherto only available to salaried partners would be extended to all fee-earners, and followed up with a string of lifestyle benefits, such as dress-down days and happy hours in a local bar for staff.

Mr Goode says: 'Some young solicitors are happy to go to a US firm in the knowledge that their salary may be huge but their quality of life may suffer.

Others are more concerned with getting a reasonable salary in a medium-sized City firm but also want to be able to enjoy the work.

It's a lifestyle choice.'

Although City firms may play on the fear factor with candidates who consider moving to a US rival - 62% of respondents to the QD survey perceived US firms to have a 'ruthless' culture - recruitment consultants say solicitors do not work harder at US firms.

US firms may demand 2,000 billable hours a year compared to the 1,400 or so hours common at City firms, but it only takes a number of major transactions a year for them to be billing 2,000 hours.

Gill Jones, the head of Taylor Root's international division, says: 'The US firms don't work harder than the magic circle - some work less hard.

They're not in the office every single weekend like you can be in the magic circle.

The difference is that UK firms have work churning through, and the US firms are establishing themselves, so assistants have got to go and get the work rather than sit there and plough on until three every morning on back-to-back transactions.'

Ms Jones believes the main difference between US and UK firms is not the billing targets but the culture.

She points out that the Americans only want the brightest UK lawyers, so she has to turn away many prospective candidates at the pre-application stage because they do not have a first-class degree and straight As at A-level.

She adds: 'US firms attract a certain type of lawyer, very self-confident, very bright and charismatic.

Not everyone wants that; some lawyers just want to sit behind a desk and be fed the work, in the comfort and security of a large UK firm.

They are worried about job security and long hours and whether the offices will just pick up and go, what their commitment is to their London office, what it will be like working for a branch.

Only some people are prepared to take the risk, and say "I'm good enough for that".'

UK firms are using fears about quality of life as a king's pawn in the game of recruiting and retaining young corporate lawyers.

The director of human resources at CMS Cameron McKenna, John Renz, says: 'We have to match the market, but we're not going to try to differentiate ourselves by virtue of our salaries.

I think we can differentiate ourselves by coming at it in a different way, by giving assistants a proper benefits package, career structure and showing that we value them, by investing in IT rather than just chucking hours on the clock, because there's only so much you can squeeze out of people.' CMS has introduced a benefits pilot scheme offering confidential external careers counselling and a concierge service to help busy solicitors manage their personal lives by, for example, providing someone to let an electrician into a solicitor's home during office hours.

The big regional players are hoping that disillusionment with London full-stop, whether at a UK or US firm, will lure more assistants with firsts and straight As into the provinces.

Chris Cayley, an associate director of QD, says: 'There are very good people moving out of London.

Big firms outside London are arguing that it will mean they can win more London-quality work.'

Unwilling to rely purely on the prospect of a better quality of life, regional firms are also hiking their salaries.

Last month, Birmingham firm Wragge & Co set a new benchmark for regional firms by rising its starting salary by more than 10% to 30,000.

US firm Brobeck Hale & Dorr - which is the first US firm to venture out of London by opening in Oxford - still holds the regional record, offering 50,000, but Eversheds and Hammond Suddards Edge have also been raising their regional rates for assistants.

There are more jobs than candidates in all the regions, with Bristol, Manchester, Leeds and Nottingham remaining popular destinations for environmental refugees from the Big Smoke.

However, for assistants wishing to combine a commercial salary with a decent quality of life, Birmingham is rapidly emerging as the location of choice.

Hammonds Suddards Edge has announced its intention to invest and recruit in Birmingham following this month's merger between Leeds-based Hammond Suddards and Birmingham-based Edge Ellison.

Assistants are casting off their preconceptions of the city and recognising it as a growing commercial centre which is a viable alternative to the Square Mile.

While moving in-house remains an attractive option for solicitors seeking greater benefits, fewer hours and more commercially focused work, commerce and industry is failing at the moment to enter the assistant bidding war by raising its salaries to levels which might attract the newly qualifieds in droves.

While the boom area of banking is able to offer newly qualifieds a magic circle-level salary of 42,000, in-house departments are choosing to recruit lawyers with a greater number of years post-qualification experience rather than woo the less experienced.

However, there is an option for young lawyers which gives what is arguably the best quality of life coupled with the best money.

This is working for the overseas offices of City firms.

Firms are busy recruiting to their offices in the Middle East, where the new stock exchange has sparked a rash of banking and corporate work, and a lack of native expertise has caused local firms to poach UK lawyers.

The magic circle firms are expanding fast in Europe.

And they pay UK salaries plus rent, incentiveness bonuses, and bonuses to compensate for the horrors of having to look at the lights of Paris from the office window at four in the morning.

Jessica Smerin is a freelance journalist