Legal Market Round-up: August 2012

No comments, posted on August 8, 2012

The UK government has announced it will be pouring £1m into a new apprenticeship programme
which will allow wannabe lawyers to train as paralegals without the need for a degree.

The paralegal programme, to be provided by Pearson, will be open from next year. Students who sit the 18 month course will combine their studying with working as paid apprentices in law firms, according to a Legal Week report. The idea is to train paralegals for a wide range of work in a variety of firms from international giants to small high street outfits. It will be left to the firms to decide how much to pay the paralegals, although they’ll have to stump up at least £2.60 an hour (the national minimum wage for apprentices). Pearson says it will be encouraging firms to err on the side of generosity.

The scheme seems well-timed, now that three years at university will cost £21k even before such luxuries as food and rent. By providing school leavers with an alternative route into law that’s also paid (however stingily), Pearson hopes more people from disadvantaged backgrounds may enter a career previously open only to graduates.

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The Welsh government is offering City law firms incentives to open back-office operations in Cardiff. Wales will today make its pitch as a new onshore venue where City law firms can cut their costs by locating back-office operations.

At a lunch for City lawyers at the Law Society, Wales business minister Edwina Hart will highlight the fact that Cardiff recently became the UK’s first and only dedicated financial and professional services enterprise zone.

The Welsh government says it offers “generous training and recruitment support for new and growing businesses” locating in the area.

In April, accountancy firm Deloitte became the first to take advantage of the enterprise zone, choosing Cardiff to open a hub for its risk operations team and create 100 jobs. It is receiving £400,000 for “enhanced training support” over the next three years.

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ABSs and stagnant economy pushing big firms towards merger, Deloitte predicts. Its latest research on the state of the top 100 firms found that they achieved a 6.6% increase in fee income for the financial year ended 30 April 2012 – with increased fee-earner headcount one of the key reasons – and foresee income growing a further 5.7% in the coming year.

The 26-50 tier enjoyed the highest rate of growth at 9.7%, boosted by merger activity and the recruitment of lateral hires, Deloitte said. Firms with an international presence saw some of their offices outside of the UK, particularly in emerging markets such as Asia, perform well. Furthermore, some firms achieved very strong results, despite the downturn, due to their focus on specific practice areas, such as litigation.

Despite a small decline in chargeable hours per fee-earner, the figures for the final quarter of the financial year suggested a slight increase in rates has been achieved compared with the prior year.

Deloitte’s research found that on average law firms are expecting growth to continue in the current financial year. They are forecasting an increase of 6.7% for Q1 and an annual fee income increase of 5.7%.

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Norton Rose and Allen & Overy have topped a Legal Week poll of the firms associate solicitors would most like to work for. Other highly ranked firms included Slaughter and May, Clyde & Co and Berwin Leighton Paisner.
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Firms have well-publicised diversity programmes – but they’re not working, InterLaw finds. The vast majority of legal professionals feel their firms have well-publicised and effective equality and diversity strategies.

The results from an InterLaw Diversity Forum survey of lawyers and non-lawyers are particularly surprising as the overall data shows that such programmes are not having the desired affect.

As The Lawyer reports today, the authors of the report have made strong recommendations on the back of the findings, calling for firms to introduce diversity targets with financial incentives or penalties if they are met or missed.

Yet, the survey of more than 1,700 legal professionals found that 90.5 per cent of male and 83.4 per cent of female lawyers (86.2 per cent overall), as well as 88.1 per cent of male non-lawyers and 85.3 per cent of female non-lawyers (86 per cent) said that their firm has a publicised equality and diversity strategy.

A further question on the effectiveness of such policies revealed that 72.5 per cent of male lawyers said it is, as do 62.9 per cent of female lawyers, plus three quarters of non-lawyers.

The report’s findings have highlighted that the further away an individual is from the white male ‘norm’ in the legal sector, the less money they earn and the less satisfied they are.

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Law firm interviews just go on and on, these days. It is a stereotype universally acknowledged that lawyers can be a little lacking in the personality department, so it is bemusing to learn that ultra-cautious senior partners are conducting personality tests on potential hires in the pub.

Yet, shock horror, candidates who believed they had the job in the bag are being rejected after going for a drink with their potential employer.  So prevalent is the trend that David Crollick of recruiter Noble Legal is advising candidates not to drop their guard until they are through the door on their first day.

Previously, post-interview drinks were seen as a formality, but Crollick says he has heard of firms taking two or three associates out to be scrutinised by their peers. “This is now part of the interview process,” says Crollick. “They may not be alone in reaching that stage, which was previously the assumption.”

Candidates may have a glittering CV and sail through a three-stage interview, but partners want to know if this is someone they want to spend their working days with. While no details are available on the personalities of those carrying out the tests, their verdicts in some cases have been damning.

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Linklaters opens summer vacation schemes to non-law students. Linklaters is to allow non-law students to apply for summer vacation schemes in their penultimate year for the first time.

The move comes as part of a revamp of the firm’s graduate recruitment programme that will see an additional summer placement and the removal of the two-week winter scheme.

Graduate recruitment manager Faye Wimpenny said: “Students are becoming more savvy and we’ve found that there’s a real appetite from non-law students to get into law firms earlier.”

The magic circle firm currently runs two four-week summer vacation schemes that are available for law students only and a Christmas scheme for third-year non-law students.

For the 2012-13 academic year, the firm will run three three-week summer vacation schemes that are open to all and a two-day insight programme in the winter.

Non-law students who undertake the vacation placement will also be able to take part in the training contract interview process that takes place after the summer schemes, allowing them to secure a position three years in advance.

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High level of consumer satisfaction with legal services providers, says research. Satisfaction with legal services providers is high, major new research has found, with those using solicitors likely to get a better result than those who sought advice from other providers.

The Legal Services Board (LSB) survey of the legal advice ‘journey’ of 4,017 people found that when confronted by a legal need – ranging from serious matters to more trivial issues, such as faulty goods – 44% of consumers took some form of professional advice, 12% sought advice from friends and family, 27% handled the legal need without help and 14% did nothing.

Of those who sought advice, 42% went to solicitors and 12% to Citizens Advice Bureaux; in all, regulated providers were involved in 47% of legal needs that required advice, and provided the majority of advice in areas such as conveyancing, probate, divorce and will writing. Unregulated providers are more likely to help with money and benefit problems, neighbour and property disputes as well as will-writing. Only 20% of legal needs were reserved legal activities.

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There’s a mixed outlook for career prospects in law as firms report retention rates up, but graduate vacancies down. Those hoping to become solicitors received a mixed forecast this summer as law firms posted improvements in their retention rates, while reporting that graduate vacancies are set to drop.

So, while the outlook for newly qualified (NQ) lawyers continues to improve, the situation for current graduates is distinctly more changeable.

The biggest improvement in NQ retention so far reported is that of SNR Denton, which posted an 83 per cent retention rate. This far exceeds the 60 per cent it achieved in March 2012 and 52 per cent it reported in September 2011.

Both Farrer & Co and Jones Day achieved retention rates of 100 per cent, up from 90 per cent and 80 per cent respectively this time last year.  Another firm that has seen a rise is Ashurst, which reported a rise to 83 per cent from 78 per cent in March.

Slaughter and May, the only magic circle firm to report so far, delivered a retention rate of 87.5 per cent, a slight drop from its March figure of 90 per cent, although that figure was slightly skewed by the resignation of two trainees from the firm before offers were made.

US firm Shearman & Sterling, with an intake of fewer than 10 trainees per year, also saw a slight drop to 87.5 per cent from the 91.5 per cent it achieved in September 2011.

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