In 2021 we expect the backlog of roles, put on hold during Coronavirus, to rear its head. "
This demand should grow over the coming months, and below we look at how this might manifest by industry sub sector and position:
Financial Services - Like the market itself, benchmarking salaries and predicting areas of hiring is very tough to do. The following is based on regular candidate and client conversations and explores the main areas of practice applicable within a few core sub-sectors of the in-house legal and the financial services market.
General Counsel, Fintech & Payments - the position of general counsel became exceedingly popular in 2010 and has continued to rise in popularity throughout subsequent years. Changes in regulations and business management styles have led to companies hiring in-house lawyers at very early stages of company growth. This is particularly true in the payment and fintech market, where we have seen notable growth over the past few years, where cost saving proves to be a choice when looking to hire in-house legal counsel at early stages rather than outsourcing legal work. With this in mind, it’s important to note that key commercial attributes are required for general counsels in the start-up and scale-up markets, another key skill is risk management. I predict this area to pick up in the coming months.
Company Secretary, Financial Administration and Outsourcing businesses - the typical in-house company secretarial appointments have been in decline over the past few years, with fewer limited companies choosing to make this instruction and more businesses offering excellent ‘outsourced’ co-sec services. With this in mind, I’d predict that the businesses we predict continued growth for company secretarial positions in financial administration companies.
Legal Counsel, General Commercial (low-mid PQE) - hiring at this level is often a favourite for heads of legal and general counsels across all of the in-house FS market. Taking the view that candidates who’ve had a great technical grounding at a top 10 firm will be able to directly transfer their skills to the commercially minded in-house teams. Though this strategy often works, it certainly has its pitfalls. Q1 2021 will see a push on hiring from private practice as technical skills become more desirable. Though the real battle starts when marking sure the incoming candidates have the commercial acumen needed to succeed in-house.
Brexit Lawyers (Global) – as mentioned above, the impact of Brexit on the in-house legal FS market can certainly be seen as a positive, especially as more businesses start expanding their teams to include specialist lawyers within separate legal jurisdictions. We expect to see this impact take several years to fully establish around what the requirements will be. With this in mind, cross-border counsel and dual-qualified lawyers could be in higher demand through the year.
Positively, it’s going to be a good H1 for in-house lawyers, certainly in comparison to all of last year. In a nutshell, the pending market growth will be down to an uptake of confidence about hiring amidst the pandemic, meaning the recruitment market will be able to pick up on the roles put on pause through 2020. In light of a hopefully improved market, where will we be focusing our attention?
In Q1&2 will be focusing on senior positions in the start-up/scale-up markets and the consumer-focused fintech market. We will also be focusing on low to mid-level PQE commercial lawyers looking to step out of the practice environment. Armed with this knowledge, we will continue to be reactive to the market as we proactively provide our recruitment and search services to our clients and candidates, and offer career advice to anyone looking to move roles or expand on their teams - find out more on our legal team here.
Employees in the United Kingdom can be categorised as full-time, part-time, casual, freelance and contract workers, with the self-employed bracket now making up 15% of the entire working population. The number of self-employed workers jumped from 3.3 million in 2001 to 4.8 million in 2017, with a corresponding fall in the unemployment rate showing the overall boost in jobs growth from the rise in self-employment. However, the attractive market for freelancers and contractors has been hit with some uncertainty in recent times, thanks largely to the 2018 Autumn Budget’s announcement of IR35 tax reforms. Here’s what the new IR35 rules could mean for you and your business: What is IR35? IR35 is a piece of legislation originally introduced to the UK in 1999. Its purpose is to differentiate between those workers who operate as genuine contractors and those who work as ‘disguised’ employees to avoid paying tax. It came about to challenge contractors who were taking advantage of the tax efficiencies of working through a limited company, with the aim of defending both the Exchequer from lost taxes and protecting workers’ rights from unscrupulous employees. However, the IR35 has proven to be ambiguous for many, with some contractors taking advantage of loopholes and a lack of clarity. Hence, the new IR35 rules aim to tighten up the contractor market and ensure tax avoidance loopholes are closed. How does IR35 work? There are three principles that can help to determine employment status and whether a contractor falls inside or outside IR35: Control (the degree of control the client has over the work a contractor does and how and when they do it) Substitution (whether the worker needs to do the work themselves or if they could send a substitute in their place) Mutuality of obligation (whether the employer is obliged to offer work and the contractor is obliged to accept it). Additionally, the contract type, provision of equipment and whether a worker is “part and parcel” of a business can all help to determine whether someone falls inside or outside IR35. The change in IR35 rules shifts the responsibility to determine tax status away from the contractor and onto the business that takes them on. Until now, contractors have been able to self-determine their status, however as of April 2020, when the new rules come into effect for the private sector, companies will risk being fined if they don’t make the correct assessment. How will IR35 impact contract workers? It’s anticipated that many contract workers who have been enjoying the tax benefits of working outside IR35 will fall under the legislation when employers are tasked with determining their status. This will see more contractors having tax and National Insurance contributions deducted from their pay. However, if you operate as a legitimate small business and are determined to work outside of IR35, you will not be affected by the rule changes. How will IR35 impact employers? The major change for businesses is that they will now be responsible for determining the IR35 status of any contractor working for the company. The new rules will only apply to medium and large sized businesses, so contractors who work for small businesses can continue to set their own IR35 statuses. Those businesses that the IR35 rule changes do apply to will face paying back taxes and fines should they be found to be noncompliant. What should I do to prepare for IR35? Contractors may wish to speak to an accountant or personal finance expert to determine whether IR35 will impact them and if a move to permanent work may prove to be more beneficial after the rules come into effect. For many, contracting will remain appealing regardless of increased tax responsibilities, however it’s important to factor in any change in income that IR35 may bring about. Businesses are being warned not to make blanket assessments that cover all their contractors, as this can leave workers without a fair assessment and risk them paying unnecessary taxes without equivalent employment rights. Instead, businesses should consider IR35 status on a case-by-case basis or they may risk losing out on top talent. The HMRC has released a consultation document for businesses to prepare for the IR35 changes, recommending identifying and reviewing current contract workforce status and putting processes in place for taking on new workers. At Marks Sattin, we pride ourselves on keeping abreast of all industry legislation, updates and changes that affect our candidates and clients. Speak with us about how we can help you. References: https://www.bbc.co.uk/news/business-44887623 https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/articles/trendsinselfemploymentintheuk/2018-02-07 https://www.contractorcalculator.co.uk/what_is_ir35.aspx https://www.axa.co.uk/business-insurance/business-guardian-angel/how-ir35-changes-will-affect-freelancers-and-self-employed-contractors/ https://www.telegraph.co.uk/business/ir35-rules/new-contractor-tax/ https://www.telegraph.co.uk/business/ir35-rules/how-will-new-rules-impact-business/ HMRC consultation document
How failing to recruit and retain a diverse workforce may lose you the next big mandate, a contribution from Chelsea Bruno and Meera Savjani on behalf of Women in Fund Finance. Although hard to believe, there are still some who do not understand the value of diversity. Despite countless studies providing strong evidence that the most successful companies are those that employ a diverse group of individuals, many maintain homogenous workforces with no intention of diversifying. Although this approach has long gone unchallenged, there is now a growing consciousness within many corporate cultures which is driving companies to hold their external counter parts and service providers accountable for failing to address the issue. It comes as no surprise that some of the more “traditional” industries such as law and finance have been slower to progress in building diverse talent pools, and the clients of these firms have started to notice. In January 2019, more than 170 general counsels and corporate legal officers in the United States signed an open letter to big law firms which criticised these firms for the lack of diversity at the partner level. The letter, which was signed by companies such as Heineken, Vox Media, and S&P Global Ratings, stated that going forward these companies (many of which operate globally) would prioritise their legal spend on those firms that commit to diversity and inclusion. The letter went on to state “we applaud those firms that have worked hard to hire, retain and promote to partnership outstanding and highly accomplished lawyers who are diverse in race, colour, age, gender orientation, sexual orientation, national origin, and religion and without regard to disabilities”1. Although the letter does not set out how these firms plan to measure such level of commitment, it’s clear that these firms are serious about holding their legal counterparts accountable, and when taking a closer look, it’s clear that emphasis on diversity does not stop at these 170 corporations. Across the Atlantic, industry groups in the UK are also pushing to hold big corporates accountable for failing to make meaningful progress when it comes to diversity. As reported by the Guardian in May 2019, the Investment Association (IA), a trade body which represents UK investment managers who in aggregate manage over £7.7tn in AUM, has confronted 94 publicly listed companies for failing to make sufficient progress on gender diversity. The IA has written to each of these companies and raised concerns about the lack of gender diversity in leadership positions. A list of companies which received the highest level of warning from the IA was recently published in the Guardian and confirmed by IA2 , and although some of these companies have responded with statements emphasising efforts to address such issues, it’s clear that shareholders and potential investors will be looking for measurable progress going forward. In line with such expectations, some investors are taking accountability into their own hands, as evidenced by a change implemented by ILPA (the Institutional Limited Partner Association), the global industry body that represents the interest of private equity limited partners. ILPA recently expanded its standard due diligence questionnaire (DDQ) to include a section related to diversity and inclusion, and requires firms fill in a template which aims to measure and report the gender and ethnic diversity of teams by seniority and role. It also includes a section of questions designed to help investors understand a firm’s policies and procedures in areas such as hiring, promotions, family leave, mentoring, and harassment and discrimination. When asked about the updated DDQ, CEO of ILPA Steve Nelson stated “ILPA believes that diversity and inclusion is a strength that all stakeholders within the private equity ecosystem should embrace and promote in meaningful ways,” said Nelson. “The due diligence questionnaire expansion and Code of Conduct guidance represent an opportunity for general partners (GPs) and limited partners (LPs) to have conversations about these important issues, in the spirit of a stronger and ever improving workplace for everyone. We look forward to advancing these ideals which serve as the foundation for a healthy, prosperous industry.”3 As with the other industry groups discussed herein, ILPA is sending a clear message that diversity is no longer an optional. Changes such as the updated DDQ make it increasingly difficult for firms to completely ignore the topic, and although the potential consequences are meaningful in all industries, the cyclicality of fundraising in private equity means the risk associated with failing to adapt could be both severe and expensive. While few would doubt that the conversation around diversity and inclusion has evolved significantly over the past two decades, many are now suggesting that the time has come for the conversation to expand into action. Although just a few examples are discussed herein, it's almost for certain that there will be more letters and questionnaires to come. With the rise of such accountability, the cost of failing to adapt may soon weigh heavy on firms and maintaining the status quo of a homogenous workforce may come to feel like a burden in itself. Thus, firms must ask themselves whether the status quo is worth the missed opportunity that will result. The 10th edition of our highly regarded Market Insight Report represents the views of over 1,100 professionals, and contains insights from our specialist consultants and key business partners on market and employment trends. If you’re looking to find out more on salary benchmarking and the motivations driving the modern workforce today, download our full report which contains key contributions from Western Union Business Solutions,Seddons Solicitors, Intoo UK & Ireland and Breaking the Silence. Cited https://www.law.com/americanlawyer/2019/01/27/170-gcs-pen-open-letter-to-law-firms-improve-on-diversity-or-lose-our-business/ https://www.theguardian.com/business/2019/may/13/investor-group-warns-almost-100-firms-over-lack-of-gender-diversity https://www.pr-inside.com/ilpa-publishes-diversity-and-inclusion-resources-f-r4704476.htm
A good interview is often overlooked by experienced lawyers, with the view that they are somewhat straightforward. For example; my client has seen my candidates CV thus my candidate knows that they’ve got the skills required. This seems simple, but it isn’t always the case, particularly as more and more businesses are choosing to bring their legal function in-house.They need to get it right the first time, interviews can be lengthy and tough for the candidate and expensive for businesses. With this in mind, I’ve penned my top tips for candidates interviewing for GC positions. Though these tips apply to anyone, they’re most relevant to General Counsel and Head of Legal when interviewing with C-Suite and non-legal stakeholders. Research goes a long wayThis goes without saying. You need to know everything you can about the business you’re interviewing for, your recruitment consultant will put some literature together for you, although it’s important to do your own research. For example; what’s the strategy of the business and do they have an existing legal function? Who’s interviewing you and what’s their background? Recent trading history and are they currently raising capital or going through M&A? All of the above will help you brush up on any particular technical areas that may arise. As ever, the more you research, the better prepared you’ll be. Showcasing your technical skillsYou’ve made it this far in your in-house career and it’s clear that your technical capability is going to be on-point. Nonetheless, you can fully expect to be thrown a curveball in an interview. Most of the time (when being asked a technical legal question by a non-legal stakeholder) their line of questioning will be influenced by recent activity or communication that they’ve had from their overpriced external counsel. So, how do you prepare for this? It’s a simple one, a large part of preparing for an interview is to research your potential new employer’s recent trading history. This will give you some big clues as to what legal advice they’ve taken. Perhaps they’ve been involved in some tricky M&A work, maybe the not-so-recent changes in GDPR had a delayed impact or they’ve expanded their business to operate overseas. All of the above can be easily researched and a consultant will put together information for you to reference, making your research much easier.One key skill you should be learning TODAYIn my opinion, the following skill is one of the most important attributes of in-house counsel, a skill that you’ll learn early in your in-house career and one that will never leave you. This is your ability to respond to a scenario with three options, varying in risk, and advise on which option will yield the best outcome. Your interviewer may choose to present you with a scenario, wanting your advice. This is a great opportunity for you to exhibit your excellent and eloquent verbal communication capabilities (incredibly important to C-Suite).What to provide:Provide the interviewer with three succinct responses to their scenarioTheorise each response advising on the levels of risk associated with each. Then advise on your preferred routeThis applies to EVERY ad hoc advice you’re asked to provide throughout your career. I’m so confident with how impressively important this skill is, that in some cases, I advise creating your own scenarios to display your advisory and reasoning skills. " Show how you can add valueIf you're being interviewed by a CFO, you will need to show the interviewer that you’re going to represent a huge saving versus the rates the existing external law firm is charging them. There are multiple ways of doing this:Look back at a time in your career where you’ve provided advice that would have cost your previous employer in external feesGive an example of noticing a change in regulation that would have resulted in a fine or having to instruct a specialistTalk about your value add in a business capacity, it’s likely that you’ll be stepping away from providing technical advice and that you’ll be working in a strategic role, much like a COO.Having an extra head in an operational sense adds exponential valueThe main thing to remember here is; QUANTIFY! Put a monetary figure by each of your examples. This massively lends perspective to your interviewer and can look very impressive. Interpersonal skills are keyThis is often overlooked as an important skill in an interview, as some lawyers rely on their immense IQ to carry them through an interview process. However, GC’s can regularly become one of the most talked to people in a business. As all streams of an organisation may choose to contact you for ad hoc advice. Being able to quickly build a rapport with your interviewers will be a good representation of your ability to do this across the business and may be what sets you apart from others interviewing.For more general interview advice visit our career advice hub.