FEATURE | working abroad >>
overseas opportunities Part 1: United Kingdom
London’s magic To move or not to move? In the first of a three-part series, ALB looks at the opportunities available overseas for Australian lawyers. This month, we examine whether the UK is still an attractive destination in the current macroeconomic climate
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awyers might be thinking twice about seeking work in the UK in the midst of the global credit crunch, but recruitment specialists say their clients are still keen to see top Australasian talent. Lynne Beggs, regional director at recruitment firm Hays Legal in Sydney, says the UK market has become much more competitive in the last six months, but there are still roles for lawyers with good experience from reputable firms. “While it’s true the market is tougher, there are still some great opportunities available in London and the rewards of working there remain exceptional,” she says. The UK continues to lure Australasian lawyers with the prospect of high quality work, good salaries and the life experience of living in Europe. However, with the credit crunch biting, firms are taking a more cautious approach to hiring. “Firms are taking one of two approaches,” says Jonathan Benjamin, director at the London office of Laurence Simons, a leading legal recruitment agency. “Either they’re battening down the hatches and preparing to ride out the storm, or they view the current downturn as an opportunity to raid the talent pool. Some mid-tier firms are now picking up top-notch lawyers that they wouldn’t get in boom times.”
Experience counts
With fewer roles available, candidates with no UK experience must have good experience with a well-regarded Australasian firm. “The quality bar has been raised,” says Benjamin. “Australasian candidates really need two to three years’ training with a leading law firm and have a strong academic background.” Louise Leecy, the Sydney-based director of First Counsel, an agency dedicated to placing Australasian lawyers into roles in the UK, agrees: “There used to be an expectation among even very junior lawyers that they’d secure an excellent job with a large
salary. This has all changed since the credit crunch. Candidates need more experience and must come from a toptier firm background.” However, there is hope for lawyers from smaller firms. Ricky Mui, director of the legal division in the London office of Robert Walters, one of the largest global recruitment agencies, says that experience in the current climate is all important. “You have better chances coming from a big firm than from a small provincial firm. But good local law firms with the right experience can also be marketable.” So is it worth leaving your secure job ‘down under’ and packing up your bags to try your chances in the UK in these uncertain times? Young Australian lawyers who are working in London believe so. They can be working on international deals of enormous scale and scope on Friday, in a café in Paris or a beer hall in Munich on the weekend, and be back at their desk in London on Monday morning. Jonathan Stewart, formerly of Blake Dawson in Melbourne, says these were deciding factors in his decision to accept a position as an associate with prestigious London law firm Slaughter and May. “The work here runs at a different pace and you’re expected to take on a lot more responsibility at an earlier stage. I always wanted to get that professional development from working in a firm like Slaughter and May, and so far it’s been very rewarding.” He adds that he is about to meet up with friends in Paris and spend a week roaming northern France. “You definitely want to take advantage of the closeness to Europe while you’re here.”
Know your firms
Slaughter and May is one of just five firms considered to be in the Magic Circle, a term used to describe those firms widely considered to be the leading London-based law firms. Four of the firms are among the largest in the
“Firms are taking one of two approaches [to the credit crunch]. Either they’re battening down the hatches and preparing to ride out the storm, or they view the current downturn as an opportunity to raid the talent pool” Jonathan Benjamin, Laurence Simons www.legalbusinessonline.com
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►► Magic Circle firms Allen & Overy www.allenovery.com Clifford Chance www.cliffordchance.com Freshfields Bruckhaus Deringer www.freshfields.com Linklaters www.linklaters.com
world. The smallest of those, Slaughter and May, was reported by the Evening Standard in August 2007 as the second most profitable large law firm in the world. Magic Circle firms are the most likely to recruit lawyers directly from Australia or New Zealand. Recruitment consultants bundle the remaining firms into Silver Circle, West End and City firms. Silver Circle firms are viewed as an elite group of firms servicing a premium UK client base but without the broad international reach of the Magic Circle. West End and City firms are smaller, with a more boutique base of clients. In a category of their own are US firms with offices in London, and these are also categorised according to their origin. “The first thing a candidate needs to know about a US firm is where it’s headquartered,” says Benjamin at Laurence Simons. “There’s a distinct cultural difference between New York-based firms and the Jonathan Stewart, others, categorised as Slaughter and May mid-Atlantic firms.” 54
Billable targets for associates at mid-tier firms start at around 1,400 hours per year, rising to 1,650 and more at Magic Circle firms. Associates should expect to be available around the clock at a US firm which is, in theory, compensated by earning the highest salaries on offer in the London market. The benchmark for salaries set by the US firms is typically up to 15% more than Magic Circle firms. However, Benjamin warns against getting too excited over the pay rates on offer at US firms. “They do pay more, but people tend to forget that UK firms have better bonuses and better benefits packages. Also, by the time you assess the tax implications, there’s probably not that much in it.” Bonus schemes differ from firm to firm, but are usually paid as cash to associates on top of their salaries in May or September. They tend to range between 10% and 40% of salary and are linked to various targets set for the individual, team or firm. Some top-tier firms simply pay a blanket bonus at a set rate of 15–30%. As well as cash bonuses, there are a number of standard benefits offered by City firms. These include a pension scheme, gym membership, private health care and holidays ranging from 22 to 30 days per year. Opportunities for increasing salaries in the current financial climate are limited. A number of firms have frozen pay packages and the rest have limited rises to 2–5%. This is a marked change from 2007 when salaries rose across the city by 15–18%. Grant Burley, the London-based director of recruitment firm Absolute Global, says that new arrivals should revise their salary expectations. “Salaries are reasonably static. And it’s unrealistic to expect to receive the same remuneration as your peers who have been working in the UK market for years.”
Still in demand
While recruitment specialists have noticed a downturn in roles available in the property and financial services sector, they say that most areas are continuing to recruit, although not to the same extent as prior to the credit crunch. “Some areas such as corporate finance have slowed down, but in other areas it’s business as usual. Construction is
►► Magic Circle Firms Salary Survey May 2008 ( Laurence Simons, London) Experience (PQE)
Range (£)
NQ
65,000–66,000
1
68,700–73,000
2
82,000–86,000
3
89,000–92,500
►► Mid to Large City Firms Salary Survey May 2008 ( Laurence Simons, London) Experience (PQE)
Range (£)
NQ
51,000–65,000
1
55,400–70,000
2
62,000–81,000
3
66,000–90,000
still very busy, as are projects, tax and pensions, and there’s a big upturn in litigation,” says Benjamin. “There’s been an increase in restructuring work as a result of the credit crunch and I expect there’ll be more insolvency work in six months’ time.” Areas of specialisation are also recruiting strongly. Mui says he is seeing a particular shortage of lawyers with funds and private wealth experience in the London market. While financial services have slowed or frozen their recruitment programs, commerce and industry is continuing to hire lawyers with strong corporate and commercial experience in IT, IP, media/publishing, telecommunications and energy. “A three- to five-year Australian qualified project or energy lawyer from a top Australian firm would have no problem getting a job,” says Benjamin. So with competition strong for the available roles, how do Aussie and Kiwi lawyers stack up against their UK counterparts? Recruitment consultants are unanimous in their view that Australian and New Zealand lawyers have a reputation for being hardworking, adaptable and well trained. Burley says he gets consistently positive comments about the integrity and strong work ethic of New Zealanders and Australians. “This is a huge advantage and can be viewed as a distinct point of difference between applicants,” he says. However, recruiters advise that UK firms generally discount up to two years from Australasian lawyers’ experience Australasian Legal Business ISSUE 6.8
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due to the two-year training period UK lawyers are required to complete prior to being admitted. “So it’s the newly qualified lawyers from Australia or New Zealand that would find it very difficult to get a job in the current climate,” says Benjamin.
Settling in
Despite Australasians historically being a good cultural fit for UK firms, most lawyers report an anxious first few months as they find their feet. Alexandra Smyth, an associate in the corporate department at Magic Circle firm Freshfields Bruckhaus Deringer, says that lawyers generally are given more autonomy than in Australia. “This is a little scary at first, but being more directly responsible to clients and other external advisors is a good thing and forces you to develop more quickly than you would otherwise.” Scott Keown, who practises in a commercial property team at large Scottish firm Dundas & Wilson, agrees: “There’s no allowance made for the fact that you haven’t practised in this jurisdiction before. The first few months can be a bit nerve-wracking as you have to bring yourself up to speed. But I don’t know anyone who hasn’t managed to do that.” These lawyers also note that their role is viewed differently in the UK. Stewart at Slaughter and May says the legal profession tends to function alongside commercial business in a much more participatory way than in Australia – a difference also noted by his colleagues at Freshfields. “You’re more of a commercial
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advisor as opposed to having a purely legal advisory role,” Smyth says. The move to the UK was relatively easy for these lawyers. All used recruitment agencies to secure positions at Magic Circle firms before leaving home. They had Scott Keown, the certainty of a wellDundas & Wilson paid job at the end of a plane trip paid for by the firms. But is it worth bypassing the agencies and sending your CV directly to firms? Leecy at First Counsel says that top-tier law firms can receive as many as 50 applications a day and therefore tend to focus only on CVs they receive through trusted agencies. Her view is echoed
skill sets and personality match the firms’ requirements to avoid disappointment. Keown, originally from Minter Ellison in Brisbane, reaffirms the need for candidates to also conduct their own due diligence before committing to a role. As a commercial property specialist, he found he was not getting the type of work that he expected. “Talk to lawyers in the firm working at your level and find out the kind of work they’re doing and the expectations of them. Don’t be blinded by the names and the money. I think you really need to focus on the type of work and London experience that you want.”
Outside the firms
Magic Circle firms are one category of a vast legal services market. Australasian
“[Firms in the US] do pay more, but people tend to forget that UK firms have better bonuses and better benefits packages. Also, by the time you assess the tax implications, there’s probably not that much in it” Jonathan Benjamin, Laurence Simons by Beggs at Hays Legal, who says that by using an agency with strong relationships with UK firms, candidates are more likely to get interviews and find a perfect job match. But with the market being more competitive than ever, candidates may be tempted to accept any job on offer. Mui at Robert Walters counsels against this strategy, stressing the importance of an agent’s role in ensuring the individual’s
lawyers typically corner the lion’s share of the contract positions which are mostly with local authorities and in-house with large multinationals. These are good options for lawyers willing to take a drop in salary and gain some work-life balance. Burley at Absolute Global also reports a growing trend towards more temporary vacancies in private practice as firms repackage permanent roles as contract positions. Mui advises Kiwis
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and Aussies on working holiday visas to carefully consider the contract market. “These contract roles can be lucrative and very tax effective depending on how you approach it.” Benjamin advises candidates to broaden their search outside London. “There are opportunities outside London in smaller firms and in commerce and industry. One UK market often overlooked by Antipodeans is Ireland,” he says. “There are some top-tier firms in Dublin with fantastic work, and they love Kiwis and Aussies.” Mui says the skills and experience gained in the UK will stand lawyers in good stead if and when they decide to return home. “The international experience and high level of responsibility make these lawyers highly marketable ‘down under’.” So should lawyers be put off by the credit crunch? Mui is emphatic in his response: “No! Come over and get some good experience, and when the markets pick up, capitalise on it.” ALB
next issue: working in middle east
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