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The clouds gather

12 December 16

Economic uncertainty post-Brexit, moderating pay rises, stressful work, and uncertain progress in the gender equality stakes – these are among the findings of this year's Journal employment survey

by Peter Nicholson

Solicitors are pessimistic about their business outlook, and Brexit is largely to blame. That, crudely speaking, is one of the main conclusions to be drawn from the 2016 Journal employment survey.

You might think that whether or not they supported the outcome of the referendum on EU membership, legal professionals would expect the vote to leave to mean a significant new source of advisory work for the foreseeable future. But a majority of our respondents expected Brexit to have an adverse effect on the prospects for their organisation – 45.1% suggested “somewhat adversely affected”, and 8.3% “very adversely affected”. Only 2.6% predicted any degree of improvement; the remainder were either “no real difference” (28.4%), or “don’t know” (15.8%).

This negative outlook is actually more pronounced among the larger firms, who might be expected to have most of the spinoff advisory work. Maybe they expect adverse economic consequences for their clients to feed through to levels of instruction. Certainly the sentiment is strongly shared within both private and listed companies from where few, if any, solicitors see an advantageous outcome. The same can be said of both local and national public sector organisations, which perhaps fear for the implications in terms of public spending.

Table 1 shows the effect on business confidence generally. This time last year, there was a positive balance in most sectors apart from public sector organisations, between those who thought the outlook for their organisation had improved and those who thought the opposite. This has gone sharply into reverse, perhaps most notably within the largest firms (21 or more principals), whose respondents recorded a 45% positive balance last year but a near 40% negative balance this time round. And, by a balance of nearly 30%, they expect matters to deteriorate over the next 12 months. However similar trends are evident across the board, including the public sector, whose solicitors have already had a pretty bleak view for the past few years.

Fewer pay hikes

It should be said that these sentiments have yet to be reflected in the indicators of business health shown in table 2, where most of the percentages show no significant change on last year and headcount growth (nearly 41% of those answering) remains the most frequently reported factor by a considerable margin. Pay freeze (slightly up at 21%) has, though, edged ahead of redundancies (unchanged at just under 18%) as the next most commonly experienced, and this year more people report bonuses being reduced or suspended than introduced or increased.

There has also been a cooling off in levels of pay increase. In 2015, 27.1% reported a rise of more than 5%, and 13.9% a rise of 2-5%. For 2016 these figures, which include those who changed jobs or were promoted as well as those position was unchanged, have dipped to 19.6% and 9.5% respectively. Conversely, 32.7% (up from 24.5%) have had an increase of no more than 2%, while those reporting no change or a decrease are up from 34.5% to 38.1%. Broken down, that last figure ranges from 70% in the case of sole principals, through 52% for those working in firms with two to five principals, 48% in local public organisations, to around a quarter both in big firms and national government or public bodies.

Stress levels exposed

A subject that has achieved greater awareness over the past year is the level of stress within the profession, particularly since a survey of their members by the Scottish Young Lawyers’ Association, publicised at Journal, April 2016, 12, found stress to be the biggest single issue of concern to them. Would the findings be reflected more broadly across the profession, and what degree of support do people have available?

On our findings, only 14% overall claim not to feel very stressed at work as a rule, but a 54% majority say that while they have a stressful job, they feel they can handle the stress. That still leaves 13.2% who say: “Stress can be a problem but there is someone at work that I can talk to about it”; a further 10.7% who have gone to someone outside the firm because of a problem with stress; and a worrying 8.1%, or about one in 12, for whom “Stress is a problem and I don’t know who to turn to.”

Breaking down that last figure, the percentage is nearly twice as high among those working for smaller firms (all categories up to 10 principals); there are also more who have to seek help outside their organisation. More junior lawyers are also more likely (12-15%) not to know who to turn to, though at all PQE levels the figure is at least 6 or 7%; and women are more likely than men to be stuck in this way, by about 2.5% on average. It seems likely that there are better support networks among larger organisations.

Differential progress

And so to that much discussed gender pay gap. What did we find?

First, a word of caution. A smaller number of respondents to this year’s survey means that figures for one or other gender at a particular PQE level, or in a particular type of organisation, may not be truly representative, so we hesitate to analyse the results too closely. However the bigger picture shows limited changes compared with the findings of the last year or two. As we found last year, there is a substantial percentage of women more than 20 years qualified (61%, though lower than last year’s 69%) whose salaries fall into the lowest four columns of table 3 – much higher than the 38% of men in the same position (table 4), and higher than the 51% of women 10-20 years qualified.

By comparison, worse off, again, are legal aid practitioners, more than 80% of whom – at almost any PQE stage – fall into those same four columns, even though the category includes some in general practice work.

There are still indications that men are moving up the pay scale that bit quicker – comparing table 3 and table 4 shows a bulge slightly further up the scale at most PQE levels. Overall, twice as many men have earnings in the six-figure bracket.

As regards job title, the women are making some headway. A quarter of those more than 20 years qualified from among our respondents have reached partner stage (equity or non-equity), compared with 38% of men, and roughly equal proportions of women and men have reached senior in-house positions. But men are still attaining more senior positions most likely a year or two ahead of their female contemporaries on average, judging by the pattern of job titles at different PQE levels.

Tempted to move?

What does it mean in terms of looking for alternatives? More women than men are actively seeking a new job, at both junior and more senior levels (11% overall against 6%), but the balance is the other way for “I would pursue a new job if the right one came up,” so that about 42% of both genders could be tempted to pastures new. And the vacancies are still there, according to recruiter Sharri Plimbley (sharri@plimbleyassociates.co.uk), who having recently returned to the legal market, has noticed “a vast increase” in the number of vacancies in private practice firms compared to 2013 when she was last involved.

She adds: “Post-Brexit, it is true to say, having spoken with several managing partners in varying sizes of firms, that the market has declined in terms of the number of commercial property transactions and corporate deals from this time last year, when finding a good solicitor within these areas was hard to come by. Inward investment from the south and general caution within the firm’s clients is primarily being blamed for this.”

Solicitor and senior solicitor roles can still be found across most disciplines, particularly at present in rural property and private client, she reports, as can in-house and public sector vacancies, but “Less seen are senior associate and partner positions, unless this level of person can move with a healthy following. The mergers and acquisitions over the last few years have made it difficult for some people to take their clients with them.”

On pay levels, Plimbley comments: “Salaries across all levels of PQE jumped quite significantly last year, to reflect the market conditions and in reaction to attracting candidates from certain areas. However, this has levelled out and I don’t imagine we will see any bigger increases for the next couple
of years.”

She concludes: “Although the outcome of Brexit and the general state of the world’s economy is uncertain, people are still looking to move for different reasons, and some firms are doing better than others by adapting and preparing for what changes may come. It’s still a buoyant market and until the outcome of what lies ahead is decided, the message I am hearing from all sections of the Scottish legal world is very much, head down and business as usual, until such time that you need to adapt to the changes that may or may not occur.”

Hardworking life

Thank you to the 571 people who took part in this year’s Journal employment survey – down on last year, but with almost identical proportions of women (62%) and men (38%), and also in-house lawyers (32%).

Also in line with last year, 42% work more than 45 hours a week, though only about 4% are contracted to do so; 23% say work encroaches “a lot” and 50% “to some extent” on their personal life; and 28% (up from 25%) do not expect to take all of this year’s holiday entitlement. One possible curiosity is that although 64% say they can work flexibly, either by contract or in practice, more men than women (74% against 61%) report being able to work from home if necessary.

A total of 82% have some form of CSR opportunity, whether fundraising (77%), volunteering (70%, equally split between in work time and in own time) or pro bono work (32%). The most commonly conferred employee benefits are shown in Table 5, along with last year’s positions.

For the most recent comparable reports, see Journal, December 2015, 12, and Journal, December 2014, 16.

 

Table 1. Better or worse? The outlook for your organisation
(balance of responses, better v worse, last year’s return in brackets)
Type of employer Over the past 12 months Predicted for next 12 months
Sole principal –29.5% (–3.3%) 0 (0)
2-5 principals 0 (+12.9%) –13.5% (+20.0%)
6-10 principals –12.5% (+22.6%) –6.2% (–6.5%)
11-20 principals –40.0% (+13.4%) –30.0% (+21.2%)
21+ principals –39.5% (+45.7%) –28.9% (+31.5%)
Private companies –5.0% (+4.7%) –20.0% (+9.0%)
Listed companies –26.3% (–1.8%) –5.3% (+21.2%)
Public sector (national body) –58.8% (–42.2%) –54.9% (–50.0%)
Public sector (local body) –84.6% (–75.0%) –79.2% (–72.2%)
Table 2. Has your organisation experienced any of the following over the past 12 months?
(all sectors)
  % % change on 2015
Headcount growth 40.6 –1.5
Pay freeze 21.2 3.8
Redundancies 17.9 –0.2
Merger or takeover 14.3 0
Bonuses reduced, suspended or scrapped 13.8 5.1
Bonuses introduced or increased 10.5 –5.8
Benefits reduced, suspended or scrapped 9.2 0.7
Benefits introduced or increased 7.2 0
Compulsory overtime 3.1 1.1
Reduced working hours/days – voluntary 3.3 1.9
Reduced working hours/days – compulsory 1.8 1.5
Don't know 19.1 1.6
Table 3. Salary spread, in percentages, by years’ PQE: female
(full-time or self-employed, all sectors)
Years’ PQE < £30,000 £30,000-39,999 £40,000-49,999 £50,000-50,999 £60,000-69,999 £70,000-79,999 £80,000-89,999 £90,000-99,999 £100,000-£149,999
0-2 25.7 65.7 5.9 2.9 0 0 0 0 0
2-4 7.1 53.6 25.0 3.6 7.1 3.6 0 0 0
4-10 1.7 25.0 45.1 15.0 5.2 3.3 1.7 0 3.3
10-20 0 20.0 14.3 17.1 20.0 11.4 5.7 2.9 8.6
>20 4.1 22.4 12.2 22.4 10.2 2.1 4.1 8.2 14.2
Table 4. Salary spread, in percentages, by years’ PQE: male
(full-time or self-employed, all sectors)
Years’ PQE < £30,000 £30,000-39,999 £40,000-49,999 £50,000-50,999 £60,000-69,999 £70,000-79,999 £80,000-89,999 £90,000-99,999 >£100,000
0-2 11.8 58.8 17.6 5.8 5.8 0 0 0 0
2-4 0 36.4 45.4 9.1 9.1 0 0 0 0
4-10 2.6 18.4 31.6 21.1 7.9 0 7.9 2.6 7.9
10-20 0 21.6 13.5 8.1 8.1 16.2 10.8 5.4 16.2*
>20 7.1 7.1 7.1 17.5 10.5 12.3 1.8 1.8 35.0**
* Breakdown is £100,000-£149,999: 10.8%; £150-£199,999: 2.7%; £200,000-249,999: 2.7%
** Breakdown is £100,000-£149,999: 13.9%; £150-£199,999: 3.5%; £200,000-249,999: 5.2%; £250,000+: 12.3%
Table 5. Which benefits do you currently receive?
(top responses, all sectors; last year’s position in brackets)
1 More than 25 days' holiday per year (excluding public holidays) (1) 45.0%
2 Smartphone/tablet/computer (4) 37.9%
3 Private health care (2) 30.2%
4 Life or health insurance (3) 27.2%
5 Cash bonus (individual performance) (5) 26.6%
6 Pension (other than as below) (10) 25.0%
7 Training support (work related) (6=) 24.8%
8 Ability to buy/sell annual leave (6=) 23.6%
9 Childcare/crèche or vouchers (9) 23.6%
10 Pension (stakeholder) (11) 21.2%
11 Cash bonus (firm performance) (8) 20.6%
12 Assistance with transport (including season ticket loan but not car allowance) (14) 19.2%
13 Pension (money purchase) (12) 16.9%
14 Pension (final salary) (13) 16.7%
  No benefits 6.6%

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