The collapse of Lehman Brothers in September 2008 and the resulting global economic fallout continues to impart a strong braking force on the legal recruitment market both in London and the UK regions.
Scores of newly qualified solicitors have not been retained upon completion of their training contracts and large numbers of senior associates laid off in the widespread culls of spring 2009 still remain out of work (although for many this has at least given them the unexpected windfall of both time and opportunity for a mid-career gap year traveling the world with the aid of previous years’ healthy bonuses).
The market in the Channel Islands remains stubbornly buoyant and resilient in comparison however and a cursory inspection of the structural differences between City law firms and their Island cousins quickly reveals why.
Firstly, the sheer size of the big London firms means that their much higher staff headcount is always going to suffer more by way of cost-cutting than at the smaller and leaner firms in Jersey and Guernsey.
Secondly, junior lawyers at the NQ – 3 PQE level make up a smaller percentage of the workforce in Channel Islands firms than at the London firms (approximately 20% as against 40% in London), and by extension island firms thus tend to have a proportionately higher percentage of senior assistants, whose greater experience means they are more able to turn their hand to different types of legal work in a downturn and continue to be able to generate fees for their employers.
Thirdly, lawyers at City firms tend to be far more specialized and operate in much narrower areas of work, unlike their Channel Island counterparts who handle a broader range of work and so again are better placed to take on different types of work in a downturn.
In addition, a number of Channel Island firms also have fiduciary and fund administration businesses as part of their revenue stream which helps to offset any drop in their legal business revenue.
Interestingly, Channel Island firms also appear to have weathered the recession better than their Caribbean competitors. Here, slightly different forces appear to have come into play –
(i) the majority of the main Channel Island players have not pursued a strategy of global expansion and so have not found themselves hampered by the attendant costs of such a strategy in these hardened times;
(ii) the Channel Islands secured inclusion on the OECD’s White List (of countries using internationally recognized tax standards) sooner than their West Indies competitors and their law firms were therefore better able to reassure nervous clients that their offshore status was not threatened by zealous regulators, and in addition the Caribbean jurisdictions unfortunately seem to have been singled out for a larger number of hostile comments from national governments, in what could be seen by many as largely being a game of political point-scoring.
As a lawyer seeking employment in the extremely tough and highly competitive London market, the Channel Islands seem therefore to have increasingly become a relatively safe port in the legal recruitment storm.
