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Brighter at last

16 December 13

A clear shift in mood has emerged from the Journal's 2013 employment survey, with many more solicitors believing that prospects for their businesses are finally looking up

by Peter Nicholson

On present indications, 2013 will come to be seen as the year when the UK economy finally returned to a steady, if unspectacular, path of growth and recovery out of the recession. Has that been reflected in the outlook for Scottish solicitors?

On the evidence of the Journal’s 2013 employment survey, the answer is yes. Whereas this time last year, most secators (by type of employer) were still reporting, on a balance of responses, that things had got worse over the previous 12 months, this year’s figures show a marked upturn. As table 4 shows, across the private sector (practice or in-house), considerably more solicitors believe the picture has improved for them this year than claim the reverse – and that this is set to continue in 2014.

Better or worse?

The balance of sentiment was more neutral among the relatively small number of respondents from sole principal firms, and it should be said that at least half of those in each category said the outlook had stayed “about the same” over the past year, with a similar number replying to the same effect, or “Don’t know”, regarding future expectations, but there is no mistaking the change in overall mood – the percentage of those expecting things to get worse over the next 12 months is down to single figures.

What a contrast to those still enduring successive rounds of spending cuts in the public sector, where the negative balance of 58.1% for the past year is not much smaller than last year’s return of 65.5%, and there remains a negative balance of expectations for 2014, of 36.2% (last year 48.2%). Here too, 72.7% report that they are still subject to a pay freeze (last year 84.2%), compared with around 20-30% in most of the private sector – and lower in the larger legal practices.

Which benefits do you currently receive

There are still some compensations for working in the public sector. They are the most likely to have a contractual right to flexitime (67.1%), and only 4.3% said they were unable to work flexibly even without that right. (The latter figure compares with over 40% across private practice, and between a quarter and a third in the in-house commercial sector.) They are among the least likely (12.9%) to find their working hours encroaching “a lot” on their private life (generally the figure was between 20 and 30%). Almost 55% have more than 25 days’ holiday a year, excluding public holidays (survey average 38%) – though one third don’t expect to take all their holidays this year (survey average 26.4%). And 76.2% are still in a final salary pension scheme.

The ground shifts

Overall, 56.3% secured a pay rise of some sort, which for 10.3% was over 10% and a further 8.8% was in the 5-10% bracket – but 11.6% still endured a cut in earnings (the highest figure here was in 2-5 partner firms, where 21.9% reported a decrease). A change in pay was linked to a change in job (including promotion) for 30% of those reporting change.

The brighter economic outlook has taken some time to be reflected in the number of vacancies advertised, and it is notable that there remains a higher percentage reporting redundancies in their organisation in the past year (33.4%) as compared with those reporting headcount growth (31%), though the gap has narrowed (last year 36% as against 26.4%). For the public sector, redundancies outweighed headcount growth by 32.4% to 5.8%.

Which benefits do you currently receive

Mergers have continued to feature regularly in the news, and just under 16% of respondents said their organisation had experienced a merger or takeover in the past year, a similar figure to last year – but although it is commonly predicted that smaller firms will be forced to merge for economic reasons, the pattern was the opposite in our survey: only 1.4% of those in 2-5 partner firms had been involved in a merger or takeover in the past year, compared with 10-12% in medium sized firms, and almost a third (32.7%) of those from firms with 21 or more partners. The in-house private sector was close to the average figure (listed companies, 17.4%; private companies, 15.8%), whereas the public sector figure was a mere 2.9%.

Looking for a move?

The Society’s “Profile of the Profession” survey, which reported at the end of October (Journal, November 2013, 10), attracted a bigger percentage response from the profession, but our survey also bears out the trend of men reaching partner status at an earlier stage in their careers than women. For example, in the 11-20 years post-qualified bracket, 16.4% of male respondents compared with 11.4% of females were partners, despite the men having the higher percentage of in-house lawyers. As for earnings in this bracket, 38.6% of women who work full time, but 64.2% of men, said they were on £60,000 or more. At over 20 years qualified, these figures were 44% for women and 70.3% for men – though it should be said in this case that a higher than average proportion of women respondents were employed in-house in the public sector.

Are people happy where they are? In all sectors, the number who said they were actively seeking a new job was between 5 and 10% – except for sole practitioners, of whom none checked this box and fewer than one in seven said they would apply if the right job came up. But almost half (48.3%) of those working for listed companies said they would go after a tempting opportunity, compared with 42% in firms with 21 or more partners, 37.4% in the public sector, 20-30% in private companies and mid-sized firms, and 18.2% in 2-5 partner firms.

Junior lawyers, perhaps not surprisingly, are somewhat more likely to be actively in the hunt, though 15.6% was the highest for any band – the newly qualifieds (on a relatively small sample). Only 3% of those qualified more than 20 years are actively looking.

Salary concentrations by PQE

That said, there is relatively little difference in levels of satisfaction with salary, though behind the average of 63.9% “satisfied” or “very satisfied” lies a range from 57-59% at the recently qualified level to almost 67% at 10-20 years qualified. There is a wider spread where benefits are concerned – more junior lawyers appear less likely to receive benefits, and reported only 47% satisfaction, compared with over 76% at 20+ years qualified.

So the picture by and large is of a profession having pulled through the worst, though we never seem to be far from the next exhortation to adapt or die. The economy is not the only challenge, and it will be interesting to see how the changing landscape for providing legal services affects the balance of optimism – if and when the new regime finally arrives.

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