Monday, 06 November 2017

Future Law

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Future Law

The legal industry is undergoing an unprecedented period of change. How will the profession look when you qualify, and more importantly, which practice areas will be in demand? Kate Durcan asks leading recruiters for their predictions.

In the words of Obi-Wan Kenobi, “In my experience, there is no such thing as luck”. And so it is with legal careers: only hard work and sheer determination will secure an elusive training contract. It may also help to give thought to the future of the profession: will demand for lawyers grow or fall in an increasingly technological world? Which practice areas will be heavily recruiting over the next five-plus years? Will artificial intelligence and the mass production of R2-D2s, programmed with the entire collection of Halsbury’s Laws and the ability to bundle at speed, spell the end for trainee solicitors altogether, heaven forbid?

If nothing else, being clued-up on the developments in the profession will impress at interview; at best, it could put you ahead of the game. Of course, short of a crystal ball, it is very difficult to predict with certainty which legal disciplines will be in demand because the legal profession is so intertwined with the economy.

‘Legal services are driven by the economy and whether the economy is buoyant or not,’ explains Mike Smith, associate director at global legal recruitment agency Michael Page Legal. ‘There is always an appetite for corporate and commercial, real estate, construction and banking lawyers, for example, but in a downturn, the demand tends to be for employment lawyers, insolvency specialists and litigators.”

Put simply, when the economy is booming, companies actively invest by buying each other, creating lots of corporate transactions. In turn, transactions generate work in other commercial practice areas, such as real estate, finance, employment, intellectual property and pensions – all the ancillary legal issues when buying a business.

By contrast, during a downturn, companies seek to recover costs by suing each other, reducing expensive workforces via redundancies or even restructuring or breaking up the business altogether.

The B-word

Another issue making the jobs market difficult to predict is Brexit. Alison Pendleton, business director at leading recruiter Hays Legal, reveals: ‘After last year’s referendum, we lost 30% of our jobs overnight, although it has picked up again now.’
On the one hand, if companies, especially the major investment banks, decide to move their operations to Europe, it could have a devastating effect on corporate, M&A and banking work, for example. On the other, if the UK is unable to continue to attract foreign talent, there could be problems filling legal vacancies creating a rise in opportunities.

‘Whatever happens with Brexit, it will impact on the legal market,’ confirms Alison. ‘Presuming everything stays roughly the same for the immediate future, the market should remain steady over the next six months or so. But the major banks may go, in which case the law firms will follow.’

She expands: ‘When the banks do badly, everything freezes in the City; the big deals don’t get done and this spins off into other areas of practice. If things go badly, we’ll go back to how it was a year ago, with very few corporate roles in London.’

According to recruiters, the current practice areas with most vacancies are: financial services, particularly regulatory funds work; technology and media; and data protection, where the demand for lawyers currently outweighs supply due to the EU’s General Data Protection Regulations (GDPR) coming into force next year, creating a raft of work. Real estate is ‘making a bit of a comeback’, says Alison, who also notes a rise in banking and litigation vacancies, and ‘corporate is now busy, having dipped a while ago,’ she says. ‘It is already busy outside of London and coming back in London now too’.

Practice areas currently commanding the largest salaries are banking, commercial, construction and real estate, while corporate lawyers ‘with good academics and experience will always get a job with a good salary’, says Mike.

What the tech?

In terms of practice areas of the future, growth markets will most certainly be linked to the fields of technology, media and life sciences, as the world’s ‘fourth industrial revolution’ (‘Industry 4.0’) takes hold. New products are already hitting the market which create complex legal issues, such as robotics, biotechnology, 3-D printing, self-driving cars and the Internet of Things (think Amazon’s Alexa).

Technology will increasingly impact on more traditional fields of law too, such as insurance law, where cybersecurity is a growing niche specialism; and finance - fintech is already revolutionising transactions and new products, including bitcoin and blockchain - see box: The Lex guide to TTT (tricky tech terms).

Jonathan Chertkow is the graduate recruitment partner at Hogan Lovells and a financial services regulatory lawyer who advises numerous fintech companies and banks, for example. He says that the speed of development in his field can be challenging from both a technical and legal perspective: ‘You have to work out what [the product] is and how it works, and become an expert in it. The pace at which everything is changing is growing all the time.’

Technology is also impacting upon how law firms are run and managed. Virtual law firms, such as Axiom, Lawyers on Demand and Keystone Law, are on the rise, enabling experienced lawyers to work remotely as freelancers, while even the most traditional law firms are embracing agile working, even for trainees.

Onshore low-cost centres owned by law firms, which simply means, cheaper satellite offices outside of London but still within the UK, are also on trend, as clients demand more cost efficiency; and the approval of alternative business structures (ABS) within the solicitors’ profession signals a rise in competitors to traditional law firms, such as accountancy and business consultancy companies, for example.


New Practice Areas – The Legal 500 UK, 2017 Edition

The following practice areas have been introduced by industry bible, The Legal 500, for the first time this year due to growth in client demand for advice. The directory lists leading firms and individuals in these fields – go to: www.legal500.com

Tomorrow’s people

While it helps to be aware of the areas of legal practice that will be in demand in the future, specialising too early in your career is not advisable. Keeping doors open for as long as possible makes you more flexible to change, and change is rapid.
Jonathan advises: ‘Come in and do a vacation scheme, talk to firms, see how they are set up – but don’t for one minute think that how the firm is set up when you arrive is how it will always be. The law is changing, technology is changing, client needs are changing and you need to be up for that challenge. It can be difficult, but it can also make the job fun.’

If you are genuinely interested in technology, give thought to the technology sector as a whole and the firms that lead in this field, rather than focusing on technology law itself.

‘As an undergraduate, think about what interests you,’ continues Jonathan. ‘If you’re interested in technology, for example, you don’t necessarily need to specialise in technology law; you can get involved in M&A involving tech companies or the regulatory issues they face. So look at firms in that field and more importantly, look at the different types of practice at those firms working with tech companies, because they can be very different.’

When it comes to recruitment planning for the future, law firms are unlikely to factor in predictions of growth areas, preferring to provide trainees with a broad base of training in the key areas of corporate, dispute resolution, banking and finance and property, for example, in keeping with Solicitors Regulation Authority rules.

In terms of trainee numbers, these tend to remain roughly static too, with firms appreciating that economic impact is cyclical: while there may be less need for young lawyers one year, there will be a greater need in subsequent years.
However, where economic impact does tend to bite is retention rates, which enable firms to be more knee-jerk reactive to business needs. This year, retention rates have been down at a number of leading firms, amid uncertainty in the market.

Futuristic trainee

But what of artificial intelligence – could trainee solicitors be replaced altogether by affable androids, happy to work evenings and weekends while never hungover or late back from the gym? Highly unlikely, say recruiters. ‘There is an awful lot of pressure these days to deliver a cost effective legal service and to fall in line with technology,’ admits Mike at Michael Page Legal. ‘But artificial intelligence, for example, will not strip out the demand for actual lawyers to deliver services.’

Hogan Lovells’ Jonathan agrees: ‘The role of the trainee has evolved and there will be even more change. Technology may take away the more mundane tasks but there will always be a real need for trainees to do the work that technology cannot do, and be the future of the firm. It becomes difficult if you say that tech can replace the bottom layer [of staff], because how then do you get the senior lawyers of tomorrow?'

If you’re an undergraduate now, by the time you commence your training contract the legal landscape may have settled, post Brexit. Technology will probably have transformed the way legal services are delivered and products that were once science fiction will demand expert legal analysis and advice. But at least trainee solicitors will always be required, luckily. Perhaps Obi-Wan was wrong after all.

The Lex guide to TTT (tricky tech terms)

AR – augmented reality (as opposed to virtual reality). Technology that provides a real-time view of surroundings enhanced by computer-generated graphics, ie, Pokémon Go.
Big data – large sets of data that reveal trends and associations relating to human behaviour and interactions.
Bitcoin – digital currency.
Blockchain – a digital ledger in which transactions made in bitcoin or another cryptocurrency are recorded chronologically and publicly.
Cybersecurity – of growing concern to companies, there is increased pressure to protect computers, data and networks from threats such as cybercrime and espionage.
Fintech – a branch of financial services that utilises and promotes technology for financial transactions.
IoT – Internet of Things. The connection of everyday objects to devices to enable the transfer of data. Eg, smart phone operation of household items such as lights and heating.
Machine learning – a form of artificial intelligence where computers have the ability to process so much data they can ‘think’ for themselves.
Unicorn – a start-up company valued in excess of £1bn.

Last modified on Monday, 20 November 2017 12:00