Route1 Market Report – The Impact of COVID-19 on the Legal Recruitment Market

30 April 2020

Route1 Market Report Q2 2020

Our Q1 2020 Legal Recruitment Market Report presents our findings from 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 (Q4 2019), and (ii) Q1 2019.

Key Highlights

  • Demand for lawyers has dropped significantly since the COVID-19 lockdown was applied, both quarter-on-quarter and year-on-year;
  • Practice areas were hit almost across the board;
  • Candidate seniority was also hit, although there was a bias towards hiring more junior associates in comparison to senior hires in a thinning market;
  • Trainee programmes have been postponed, which may lead to a rerun of the skills shortage and partner bottlenecks that characterised the impact of the Global Financial Crisis several years after its initial impact; and
  • Many firms have furloughed legal as well as support staff.

This quarter has not been an easy one for the recruitment market in general. While it was already clear that we were in the later stages of the economic cycle, nobody could have predicted at the start of this year that major parts of the global economy would be brought to an abrupt halt by the COVID-19 pandemic.

According to KPMG, after rising in the prior three months, all permanent staff placements declined sharply in March 2020, with the rate of reduction the sharpest since February 2009, leading many clients to cancel or postpone hiring decisions in response to the COVID-19 pandemic. Temporary billings in the recruitment sector were also hit, with a combination of the Coronavirus and pending IR35 policy changes leading to the quickest reduction in recruitment billings for 11 years.

Route1 Market Report Q2 2020

The Legal Sector

Q1 traditionally sees a significant increase in legal recruitment activity, as firms pay out bonuses and subsequently move to fill either calendar year budgeted new roles or to replace associates who have moved on. But at the end of this past quarter, there was a 55% reduction in vacancies compared with the same point in 2019.

Route1 Market Report Q2 2020

More nuanced examples of COVID-19′s effects are also beginning to surface in the market. We are noticing a significant change in demand across sectors, with restructuring not surprisingly showing a relative increase, and also niche demand from claims management companies. Almost all other sectors witnessed vacancy reductions across the board.

In terms of seniority, demand for mid-level lawyers remained strongest in Q1 2020, continuing the trend from the previous quarter. Our data tells us that 51% of total roles in the UK were in the 2-6 PQE range. There was also a slight increase in demand for junior lawyers, offset by a corresponding decrease in senior demand. However, we understand from our clients that almost all roles are on hold at present, so this insight is somewhat irrelevant.

One thing is for sure, in light of the current climate, we expect that junior lawyers – particularly summer 2020 NQs – will face a tough time securing employment, even when the relaxation of lockdown occurs. We also are aware of many trainee deferrals, and believe that this has the potential to lead into a rerun of the skills shortage and partner bottlenecks that characterised the impact of the Global Financial Crisis several years after its initial impact – assuming a recovery is in prospect.

What This Means For Route1

We believe that nimbler, leaner recruitment businesses such as Route1 will outperform legacy “traditional” recruiters through the COVID-19 pandemic and beyond. To quote Caroline Gleeson, CEO and co-founder of Occupop: “we will see the [pandemic cause] emergence of a new norm, including significant changes and innovations, plus the introduction of new processes in a historically traditional [recruitment] industry”.

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

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 if restructuring, employment and banking will be the first areas of significant demand. Route1 can use its technological edge to not only help you identify talent ahead of the competition in these key sectors, and help you engage with them ahead of time; we can also measure what the competition is up to in real time. It is at times like these, when “flow” business is off the table and traditional recruiters have lost their market, that a platform solution like ours provides clients with a powerful competitive edge based on real-time data. We also offer:

  • Value for money: we are significantly cheaper than its competition, posting jobs for free and only charging 15% of salary on successful hiring;
  • Speed to hire: we are much faster and more targeted than traditional recruitment methods;
  • Intuitive platform technology: we can target our 12,000+ users at the touch of a button, measuring engagement rates with your legal content, your marketing material, and can build candidate shortlists within hours of being retained; and
  • The only fully GDPR compliant player in the market: we never cold call candidates, and our candidates always remain in control of their data. GDPR remains a significant concern for firms, and the ICO. You may be interested in reading a recent article on this topic from Legal Week.

To conclude, we are fully configured to support your legal hiring needs remotely and to help you locate the legal talent you require at any time. In the meantime, stay safe and well.

The Route1 Team

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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