The rapid rise in secondment arrangements between firms and their clients that has flourished during the market downturn will dwindle as the economy improves, as less lawyers are left sitting around "underutilised".
Balance Legal managing director Ken Jagger, who specialises in providing secondees to in-house clients, said in the past 18 months, big firms had "sent out more lawyers than they've ever sent out before" on secondments.
Jagger said this was because they had "underutilised lawyers" as a result of the market downturn, which left many firms with lawyers "sitting around", despite having executed redundancy programs in some cases.
As business picks up, this trend will reverse, Jagger said. "The big firms will withdraw as things improve," Jagger told Lawyers Weekly. "If the good times roll again, they won't have the people available to send out."
Big firms have been amenable to secondment arrangements with their clients because of the relationship and subsequent business benefits this should bring, as well as the career opportunities it offers their associates.
However, the arrangements are not financially profitable. "They are losing money each time they send someone out," Jagger said. "Especially if they send senior lawyers, who they may charge out for $500 an hour - they can't get that on secondment. It's only sustainable as a relationship device," he said.
Jagger, who left the Freehills partnership to set up Balance Legal 18 months ago, said the big firms "became competitors" to his business during the downturn, as they sent out more lawyers on secondment.
However, he said "from my experience it comes and goes with the economic times - what dictates it is how utilised their lawyers are," he said. "If the boom comes back, they won't be sending them out to secondments."
- Ben Abbott
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