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Partners and counsel fear for talent retention post-Brexit

Threat of losing fee earners to international players will be a big challenge to law firms and in-house teams

19 December 2016

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The results of a new survey highlight the concerns that both in-house lawyers and law firm partners share over retaining talent after the UK leaves the European Union, as well as how they are managing increased resourcing pressures.

The study from MLex revealed that nine out of ten partners of UK law firms are concerned about losing talent to international law firms post-Brexit. Until the UK’s exit agreement is agreed, legal teams will remain in the dark as to the barriers they may face when recruiting overseas talent.

‘The Immigration Act 2016, which imposes a charge on companies employing skilled foreign workers, was due to be introduced in April 2017, but this could now be brought forward following the result of Brexit, which will offer more clarity,’ said Robert McLeod, chief executive officer of MLex.

‘In addition to the threat of losing existing employees to international players, attracting new talent may prove challenging post-Brexit,’ he continued. ‘Non-British EU citizens make up between 10-20 per cent of the trainee intake in corporate firms located in London, so any change in their eligibility to work in the UK could have a negative effect on the recruitment of future talent. Recruiting and developing overseas talent is critical to remaining a global player in the legal market.’

The study also revealed that over half (58 per cent) of partners said they have plans to move elements of their operations to a jurisdiction within the EU after Brexit.

Relocation is also a concern for in-house respondents, more than four in ten of which (42 per cent) said their businesses would definitely relocate legal staff once Britain formally leaves the EU in order to offset the impact of limited access to skilled European labour.

Almost half (46 per cent) of in-house lawyers view HR laws and policies as their biggest concern as the EU and UK work through article 50.

In what will be seen as a boon for private practices, senior in-house lawyers at companies with over 500 employees said their businesses are increasingly turning to external sources for guidance.

Over half (58 per cent) of in-house counsel plan to change their overall legal spend in the next 12 months as a direct result of Brexit, and nearly eight out of 10 (79 per cent) said that they would be spending it on increasing their external legal advisers, which has resulted in an increase in new business enquiries for law firms.

Even despite long-term fears about staff retention, this influx in work has resulted in firms embarking on a rapid recruitment drive in a bid to manage increased demand for legal support. MLex’s survey found that 60 per cent of firms have hired additional staff to handle new requests for legal advice from clients as a direct result of the Brexit vote.

However, lawyers should be wary of the short-term impact of Brexit. ‘Spikes in recruitment levels to cope with the increase in workloads may be a knee-jerk reaction,’ warned McLeod. ‘Firms and legal teams will need to manage their headcounts carefully and ensure that they are aligned to the future level of business activity.’

John van der Luit-Drummond is deputy editor of Solicitors Journal

john.vanderluit@solicitorsjournal.co.uk | @JvdLD

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