As with any new system of government, the new Labour government’s policies are poised to affect many sectors and professions across the UK, including the legal sector. The government’s budget, which emphasizes investment in public services, environmental policies, and new demands from employers, will change the market for solicitors and firms. This article examines some key areas of change, growing sectors, and the opportunities and challenges that the new government will present.
Challenges the Budget and Reforms Poses to the Legal Market
One of the first key considerations in the market is the new national insurance contributions. For law firms, these requirements drive up the overall costs of employing new staff, making each hire a serious consideration as the tax contributions may demand a higher level of profitability from the position than before. This has a subsequent effect on prospective employees, with the new demands on employers intensifying scrutiny during hiring, as firms are likely to become more selective to mitigate risks and costs. This could mean firms adhering to stricter recruitment strategies and a potential dip in hiring whilst the new laws come into place. For lawyers, job opportunities may diminish, with greater competition, particularly for NQs and juniors, making it crucial to adapt career goals to factor in the current needs and in-demand areas in the market. However, the legal market does remain buoyant, and firms are generally still receptive to strong solicitors particularly those with a business case or contacts etc.
Another key reform is flexible working. The new government expects flexible working to be a standard for new employees. Therefore, firms will need to factor this in when recruiting, as the trend now firmly places flexible working as a standard as opposed to a benefit.
Surge in Demand for Property, Planning and Environmental Law Specialists
One of Labour’s key reforms was the plan for the development of 1.5 million homes in the UK during their leadership, which resulted in an almost inevitable increase in property roles in commercial, developmental, and residential positions. As the government pushes for stricter environmental regulations, planning and environmental work is also expected to increase in demand, as Labour’s commitment to emissions targets and tighter corporate accountability standards will likely drive the demand for skills in the various sectors related to property and environmental matters.
For law firms, this creates a recruitment challenge, both in terms of hiring and keeping staff, as the increases in the work will likely drive up salaries and offerings to those with strong skills and experience. Competing for these specialists will likely mean firms need to enhance their recruitment offerings, from salary increases to benefits packages, and the potential for career progression. From a lawyer’s perspective, this means more opportunity and we are already beginning to see more roles in real estate and planning at various levels. Lawyers across property and planning should be ensuring they’re receiving the most competitive salary and best career development as these skills become more in demand.
Increased Competition for Private Client Lawyers
Labour’s new budget, which includes tax adjustments targeting high earners and corporations, is expected to drive up demand for lawyers specializing in tax law, wealth management, and estate planning. Firms with private client practices and in-house teams focused on tax and wealth management are likely to see or are already seeing increased workloads as clients respond to new regulations, tax thresholds, and compliance requirements.
For law firms, this heightened demand for tax and wealth management specialists could make recruitment increasingly challenging. Private Client law is already a competitive area in the Southeast, and the new budget may lead to a surge in client demand that further narrows the talent pool. Firms may find it necessary to adopt targeted recruitment strategies, including lateral hires, to secure tax law talent. Firms competing for top-tier tax and wealth management lawyers may also need to offer signing bonuses or progression/partnership opportunities. Again, if you specialise in private client law both contentious and non-contentious, now is an excellent time to explore your options.
Adapting Recruitment Strategies to the New Laws
The Labour government’s budget is forcing law firms to rethink their recruitment strategies, firms are likely to experience challenges in balancing budget constraints with the need to offer competitive packages. The need to also provide flexible working options as standard to new employees can also prove challenging for smaller practices that perhaps don’t have the infrastructure in place to make this work.
Firms might also need to adapt to a shifting candidate mindset, particularly among younger lawyers who are increasingly seeking positions that align with their values. Labour’s policies on social justice and environmental sustainability may appeal to candidates who prioritize purpose-driven work, providing law firms with a potential recruitment edge if they emphasize these attributes in job offerings.
For candidates, the new laws mean that a stricter recruitment agenda for firms is likely due to new employee-focused measures. It is crucial in the market to be transparent about your individual needs, but also to understand that firms also have various considerations, particularly with the new reforms, therefore, a reasonable and considered approach to ensure your needs and the firms are met is essential to securing a new role.
To discuss the market in more detail, including opportunities and recruitment strategies, do get in touch with Will Webster at Chadwick Nott:
(T): 0117 945 1634
(M): 0773 370 0509
(E): willwebster@chadwicknott.co.uk
