Route1 Market Report – Q2 2020

16 August 2020

Our Q2 2020 Legal Recruitment Market Report presents findings from our platform analytics for the past quarter, enabling us to reflect on the opportunities and challenges facing the UK legal jobs market. The Report summarises legal vacancy and employer data nationwide, compared to (i) the previous calendar quarter (Q1 2020), and (ii) Q2 2019.

Key Highlights

  • Demand for lawyers has dropped by over 50% since the COVID-19 lockdown was applied;
  • Practice areas were hit almost equally across the board;
  • Candidate seniority demand, such as it was, reversed from Q1 2020, with many more junior lawyers and paralegals looking for roles than senior staff; and
  • Many firms have furloughed legal as well as support staff, and it is unclear how the ending of government support measures of this nature will play out, although it is clear large numbers of firms are cutting NQ numbers and deferring trainee contracts.

 
Q2 2020 saw firms hunkering down for a prolonged recession and waiting to see how and when they should reinvest in headcount. Q2 traditionally sees a slight decrease in legal recruitment activity, as the moves that were prompted in Q1 after firms paid out bonuses take place. A time lag generally takes place between leavers working their notice and firms interviewing and accepting their replacements. However, this year this decrease has been broadly just over 50% down on the prior quarter and spread fairly evenly across practice groups. This compares with a 37% decrease generally in London and 48% decrease outside London in white collar jobs, with 27% in banking and 17% in risk and compliance, according to VacancySoft.

Route1 Market Report Q2 2020

In terms of seniority demand, job seekers trended much more towards the mid and junior level lawyers, with almost a threefold increase for paralegals compared to the prior quarter.

Route1 Market Report Q2 2020

We believe this significant seniority demand inversion is due to several factors. As we predicted in our Q1 report, in light of the current climate, junior lawyers – particularly summer 2020 NQs – are already facing a tough time securing employment, despite the relaxation of lockdown. This increase in junior lawyer job seekers is most likely due to fewer NQs being taken on at the end of their trainee contracts. The dramatic increase in paralegal job seekers is probably due to deferral of traineeships in many firms. Firms are also more willing to let junior staff go in times of crisis, given that they are more easily replaceable and have enjoyed lower levels of investment and client exposure than their more senior colleagues.

Relative in-house vs. private practice demand did not significantly change, with 32% to 68% in Q2 2020, as opposed to 27% to 73% in Q1 2020.

What This Means For Route1

Nimbler, leaner recruitment businesses such as Route1 will outperform legacy “traditional” recruiters through the recession resulting from the CV-19 pandemic, particularly as our fee proposition is up to 40% lower than our traditional agency competitors. Our gross operating margin is probably one of the highest – if not the highest – in the sector, enabling us to pass on more value to our candidates and clients. We have been practicing dispersed working since our inception, we regularly interview candidates online for our clients and so the “new normal” of Zoom has always been a feature of our business, and we regularly conduct market analysis remotely from both our data analytics platform and third party services like LinkedIn. We do not rent offices or employ large numbers of cold callers, and we continually work to enhance our sales channels through collaborations with third parties.

At Route1 we are already there. As the leading technology platform for legal recruitment, we have been practicing dispersed working for years, regularly interview candidates online for our clients, and can conduct market analysis remotely. Our figures for the past quarter bear this out, with our strongest results since our launch. We grew our candidate pool by 6% and vacancies by 9%, with applications remaining steady and strong revenue growth. Despite the strong headwinds facing the rest of the industry, we are on course in Q2 2020 for our strongest quarter to date, with the number of successful hires likely to be a strong multiple over prior quarters.

Route1 Market Report Q2 2020

We believe our KPIs for the past quarter bear out our relative outperformance, with strong candidate growth of 2439 (18%) YTD (or 21% year-on-year) as we continue to make placements to new and existing clients. We also reached a key KPI milestone at the end of Q2 2020, acheiving a total of 15,000 candidate sign ups to Route1 – a testament to the hard work of our marketing and onboarding team.

Another interesting feature of the recent market is the growth in contract demand, particularly for paralegals, as firms use lower seniority contractors to flex to demand as the need arises. We have onboarded three new major clients in Q2 2020 who wish to use us for contract paralegal and junior associate staffing, and we see contractors as a key growth opportunity for us.

What This Means For You

You may be a client whose recruitment is likely to be on hold but wanting to position yourself competitively for when the economy starts its route to recovery. You may have furloughed your internal recruitment staff, but are wondering how to target stellar restructuring, employment and banking candidates as these key practice areas return to growth. You may wish to flex a team to fill roles for a particular transaction without adding the burden of a long-term hire in an uncertain business environment.

Route1 uses its technological edge to not only help you identify talent ahead of the competition in these key sectors, but helps you engage with it ahead of time. It is at times like these, when “flow” business is off the table and traditional recruiters have lost their market, that our platform solution provides clients with an efficient, fast and cost-effective hiring solution. Route1 offers:

  • Value for money: we are up to half as expensive than the competition, enabling employers to post jobs for free and fill roles at only 20% of salary on successful hiring;
  • Speed to hire: our platform is much faster and more targeted than traditional agency recruitment methods; and
  • Intuitive platform technology: we can target our 15,000 users at the touch of a button, measuring engagement rates with your legal content and your specific marketing material, enabling us to build shortlists of qualified and engaged candidates within hours of being retained.

 
Route1 is an award-winning marketplace for legal talent. For any questions, please contact our Engagement Team or visit our Contact Us page for more information.

About

We have big ambitions to permanently change the way people hire and get hired, both in the legal and other white collar sectors, using GDPR compliant, content-rich, value-added recruitment techniques. We place transparency, charity, and candidate control at the heart of our model.

Route1 was founded in the UK in 2015 and is headquartered in London. Our founders and investors include experienced lawyers, digital entrepreneurs, recruitment consultants and HR professionals.

Route1 is an award winning marketplace for legal talent. For any questions, please contact our Engagement Team or visit our Contact Us page for more information.

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