TWO YEARS ago the London legal market had its doors held wide open to Australian lawyers, and Australian lawyers — lured by the prospect of travel, big deals and even bigger bucks — flocked abroad to fill the demand.
Fast forward one year to when the credit crunch was beginning to take its toll, and UK law firms had started to seriously tighten the reins on recruitment — particularly for lawyers from overseas. Reports of lawyer redundancies started rolling in and concerns about job security began to mount, and the UK stint quickly went from being almost a rite of passage for young Australian lawyers, to a far less certain bet.
And now, finally, the pressure is starting to mount in the Australian legal market as the flow-on effects of the credit crunch begin to bite.
“It’s the same as we’re seeing over here in the local market,” says Matt Harris, a recruitment consultant at Taylor Root in Sydney.
“The firms, to be frank, are concerned about how busy they’re going to be and they’re concerned about how busy they are right now. They’re becoming very anal about the recruiting they’re doing — unless it’s really right and there’s a real need, they’re just not taking chances.”
While gaining employment overseas is not an impossible feat, the recruitment slowdown is certainly making things tougher. “There’s not a great deal of appetite [for lawyers wanting to work overseas]. I think it’s hard to sell to these firms because there isn’t that urgency there.”
However, as to be expected, the downturn hasn’t had the same effect on all practice areas. “I think the general trend is that there’s been less appetite for corporate and banking lawyers than there was, and there’s been more appetite for commercial litigators, insolvency and restructuring lawyers,” Harris says.
“Obviously the firms are either starting to see that kind of work, or are expecting more of that kind of work to come their way if things continue to go downhill.”
A lawyer who can attest to the rise and rise of insolvency work is Daniel Butler, who’s now a senior associate in Blake Dawson’s commercial dispute resolution team.
Butler first moved to London to undertake a Master of Laws, and upon completion, he took up a position at the London office of US firm Mayor Brown, specialising in litigious insolvency matters.
In contrast to his counterparts in transactional teams, Butler saw his workload really ramp up as a result of the credit crunch. “The insolvency work really stated picking up from about August last year,” he says.
“The number of instructions coming through on that front really started going through the roof, and I believe that it has continued ever since.”
In contrast, his colleagues in corporate and finance saw their workloads decline, to the point where they had to make strategic shifts in their areas of expertise.
“Some of their traditional workbase did dry up during that period, but they ended up moving sideways and often doing different sorts of transactions than the ones they’d previously been doing,” he said.
James Lawrence, now a senior associate at Mallesons Stephen Jaques, also experienced the change in mood in the London market firsthand. Lawrence returned to Sydney in April this year after having spent two years in the London office of Wragge & Co.
When he first moved to London in 2006, Lawrence found the recruitment process “relatively easy”, and he was able to line up his position at Wragge & Co - which he describes as a “top-tier IP firm” — before he left Australia.
“I didn’t find it that hard,” he says. “Back in ’06 I remember there were loads of [job] ads around … back at the beginning of my stint, it was pretty busy.”
Lawrence said that even post credit crunch, his workflow remained fairly steady, though it did begin to “dip” towards the end of his time in London.
He recalls, however, that some lawyers weren’t so fortunate: “For example… Citigroup in London made their entire — or a substantial portion of — [they’re] legal department redundant. That was huge. I remember that when it happened it created a bit of a stir,” he says.
While Lawrence himself remained relatively insulated from the effects of the credit cruunch, he said that events like this led to a general feeling of uncertainty surrounding job security in the legal market. “The Citigroup was a big thing at the time, and there were a lot of reports of lawyers being made redundant,” he says.
According to Harris, the anxiety that hit the London market hard is now starting to show in Australia. “I think [Australian firms] are busy now, but more of the concern is how busy they’re going to be in six months’ time,” he said.
This feeling, he said, has resulted in Australian firms taking a much more cautious approach to recruitment. “[Their policy ] is ‘Look, we need someone right now, but let’s not panic and run headlong at a candidate, because if things do slow down we may end up having over-recruited’,” he says.
“I think everyone is assuming it’s going to get worse … I know there’s this assumption of ‘doom and gloom’ — it’s all over, we’re all going to be unemployed, and that’s causing some of the problems. It’s unfortunately a bit of a snowball effect”
Harris believes there’s a way to go — both in the UK and Australia - before the market starts to swing the other way. “I think the uncertainty will continue and if you’ve been through a stage where everyone is a bit anxious it tends to leave a bit of a shadow and it takes a while for them to climb out of that and think more positively about things again.”
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