Market Intelligence: Talent in Legal

Please note: Sources for all data cited in this article can be found in this presentation.

On Monday 21 January 2020, Nottingham Trent University (NTU) hosted the seventh workshop in our series of sector-focused workshops, with Market Intelligence: Talent in Legal.

The workshop, delivered by Gradconsult, saw in-depth discussions and dialogue between representatives from companies in the legal industry across Derby, Derbyshire, Nottingham and Nottinghamshire (D2N2) on the topics of:

• the state of the graduate market nationally and locally
• key challenges for the sector over the next five years
• the skills, knowledge and behaviours businesses need graduates to have
• challenges faced by SMEs in recruitment and retention
• how NTU can work with local business to help address the above and ensure our talent pipeline meets the future needs of the industry

The graduate market nationally

To begin with, data shows there are not enough young people entering the workforce. This leads to more vacant jobs than there are graduates to fill them as older workers retire. Brexit may complicate this due to a reduced migrant workforce.

However, at the same time, graduate unemployment is at its lowest since 1979 at 5.1%, and 87.5% of graduates are satisfied with their careers after three-and-a-half years.

In the UK, the graduate market is not regulated in the same way as other countries such as Germany or the USA, meaning the provision of university degree places is not linked to workforce requirements, creating a highly non-linear graduate market. This means that many graduates undertake careers in roles that are not directly linked to their area of study.

When considering their prospects, 48% of final year students are still undecided on their future career and are therefore open to influence from business.

While the perception is that a high proportion of graduates will be drawn to London, the majority (69%) actually go to work in the region where they grew up, with a further 13% moving away to go to university and staying there. What may be surprising is that London is the only city in the UK where there is an oversupply of graduates. However, business students have shown an increased willingness to travel for a job.

Additionally, despite a rising perception that degrees don't offer benefits in the same way they used to, those with a degree still earn significantly more than non-graduates over their working life, with undergraduates and postgraduates earning £10k and £16k extra per year respectively on average.

As a profession, law is a salary outlier as it generally pays better than other sectors with which it is grouped. With salaries ranging from £17k per annum for apprentices, to £22k for interns and £40k for graduates, it is often split out from other averages.

Data from LinkedIn shows that a relatively low proportion of law graduates go on to work in the profession – between 30-35%. Latest NTU figures stand at 50% conversion.

The graduate job market locally

Some key facts about the graduate market in Nottinghamshire and Derbyshire are that:

• there are a lower proportion of managers, directors and professional occupations available in both Derby and Nottingham compared to the UK nationally, although Derby fares slightly better.
• Nottingham comes in at 7th-best UK city for disposable income when comparing graduate starting salary to cost of living
• Derby tops the table in the same study, although this figure may be attributed to the increased proportion of high-value engineering companies resident in the area
• the East Midlands has the lowest proportion of residents with a degree in the UK, leading to more demand for skills, but also creating a potential barrier to development and progression

To help attract top talent, businesses can apply and champion these positive messages through their attraction and recruitment of talent in the area, collaborating with NTU to help further advance prosperity and opportunity within the local area.

Sector trends and threats

Sector trends identified by Gradconsult were:

• New types of legal service and delivery
• Technological advance
• Increasing amounts of work relating to Brexit-related regulation
• Competition from new entrants and US/Chinese law firms
• Increasing work from non-UK clients following the depreciation of the pound
• The Law Society’s estimates of the growth in real turnover for 2017-2020 remain buoyant
• Legal aid cuts

Around social mobility and equality, the largest firms (those with 50+ partners) have seen positive trends between 2014-2017 in increasing numbers of women partners (4% increase) as well as an increase in state-educated partners (10% increase).

A similar trend has also been noted in the smallest forms (those with just one partner) with a 8% more BAME partners and 2% increase in partners who are the first generation in their family to go to university.

Gradconsult also identified a number of sector challenges and threats:

Technology

High-volume work such as contract analysis, due diligence and e-discovery) will increasingly be carried out by technology and AI. Firms will need to ensure they are harnessing new technologies to

Development

Junior legal professionals tend to develop and start their careers carrying out this kind of administration activity, so the increased use of technology poses questions about talent pipelines and career progression.

Housing market

Housing transactions are slowing down significantly since the beginning of 2018. This is expected to continue in the short- to medium-term with slow growth of the UK economy.

Perceived threats

Law firms are most concerned with how Brexit, shortage of talent, and cyber threats will impact their future growth ambitions.

Recruitment challenges

Brexit

Brexit is influencing the market, alongside domestic reforms and an increase in personal injuries vacancies. Conveyancing talent is also in short supply, as well as demand for legal talent increasing outside London.

Increased demand

Increased demand for legal services means that firms are struggling to keep up with capacity. Many firms are looking for innovative ways to increase their talent pool.

Reducing graduate/trainee intakes

Most law firms cut graduate/trainee intakes between 2008-2012, which has results in low numbers of solicitors with two to five years post-qualified experience.

Skills versus knowledge

In the UK, the education system is focused more on the acquisition of knowledge that the acquisition of skills. Academic-type learning will need to be conjoined with opportunities to apply new knowledge and skills.

Diversity in the workforce

Just 3% of lawyers identify as disabled compared with 10% across the UK workforce.

3% of lawyers identify as LGBT+ compared with 5-7% of the population.

22% of lawyers attended fee-paying schools compared with 7% nationally.

36% of partners in the largest firms went to fee-paying schools.

59% of partners are the first generation from their family to attend university.

For advice on recruitment, including attraction, selection and retention, email talent@ntu.ac.uk.

Horizon scanning

The NTU talent pool and how SMEs can get involved

NTU currently has 2,561 undergraduate and postgraduate students on law degrees in the 2018/19 academic year. NTU are also to start delivering a barrister training course in the near future which will run over six months (or 9 months for masters-level).

There are plenty of opportunities for businesses of all sizes to engage with students from NTU. A selection of these opportunities include:

• Year-long placements
• 10-week placements
• Nottingham Law School employer challenges
• Mentoring schemes
• Attending the annual Law Fair
• Employability support and advice including assessment centres, employers boards, etc.
• Connecting with students offering pro-bono activities with the Law Advice Centre

To explore any of these options, or to access other support around recruitment, contact the Employability team at NTU at  talent@ntu.ac.uk.