The legal and accounting sector will create almost 5,000 jobs in the City over the next decade as highly skilled roles continue to be centred in London, according to a study from the City of London Corporation.
Over the next 10 years a total of 39,000 jobs will be created in the City and 145,000 in central London, the report says, with the legal and accounting sector accounting for 15% of the City’s growth.
Roles in London are expected to be increasingly highly skilled, while lower-skilled, back-office work is expected to continue to shift towards lower-cost locations elsewhere in the UK, suggesting the northshoring trend among City firms will continue.
Last month magic circle firm Freshfields Bruckhaus Deringer confirmed its plans to open a legal and business services centre in Manchester by the end of the year.
Herbert Smith Freehills and Allen & Overy were the first to kick-start ‘near-shoring’ in the UK by establishing support centres in Belfast in 2011.
Recruiters said the trend would accelerate. ‘To remain competitive, City firms have realised they must concentrate on complex high-end matters at the top of the value pyramid,’ Scott Gibson, director of legal recruitment company Edwards Gibson, told the Gazette.
‘The response to the triple challenges of globalisation, technology and regulator change from City firms has been the streamlining or outsourcing of back-office support and the jettisoning of whole chunks of less profitable business.’
But Jon Paul Hanrahan, associate director at Douglas Scott Legal Recruitment, suggested that the divide between London and the rest of the UK might not be as wide of the report suggests, with technology and transport links encouraging skilled positions to move to the regions.
‘There will always be high demand for highly specialised positions in the City however if the likes of Manchester can take advantage of HS2/3 and devolution attracts more business, the sentiment in the regions is that they can provide a credible alternative and resolve issues regarding the skill shortages suggested in the report.’
According to the report, the City generated £45bn in economic output in 2015. But it warns that the possibility of Britain leaving the EU, a lack of skilled employees, affordable housing and aviation capacity could threaten growth.