The Evolution of the Law Job Landscape
Law job opportunities continue to expand and in the United Kingdom a recent report shows a notable trend with an increasing number of lawyers are departing from traditional law firms to join fee-share practices, with one such entity surpassing all others in recruitment numbers last year.
According to findings by the tech group Codex Edge, assisting law firms and recuiters with data on lawyers and the profession, the migration from conventional firms to fee-share or ‘platform’ law firms was more than double the opposite movement in the previous year.
Fee-sharing companies and law firms that utilize remote workers to provide legal services have become increasingly important in the legal profession in several jurisdictions, particularly as the industry adapts to technological advancements and changing work environments.
The use of remote workers allows for a more flexible and cost-effective approach to delivering legal services and has become a key business model for many law firms and in-house lawyers seeking greater efficiencies, along with maximizing work-life balance and hybrid working opportunities that technology (and Covid) has hastened.
Setfords, headed by Chris Setford, (pictured) emerged as the leading recruiter in 2023, hiring close to 150 lawyers, outpacing firms like DWF and DAC Beachcroft.
Setfords, founded in 2006 and a Lawyer 100 law firm in the UK, has over 450 ‘consultant lawyers’ across the UK along with 130 in a central team supporting the consultants in their work, providing both flexibility and efficiency in service delivery. Notably, the Setfords-style delivery avoids high-cost office rentals through its use of remote workers to permit lower fees for clients.
Among the top hirers apart from Setfords were also Taylor Rose MW, which operates both a traditional and a platform practice, along with Gunnercooke.
Researchers noted that a significant portion of the departing lawyers from traditional firms to fee-share setups were experienced professionals, many with substantial client followings, constituting a substantial loss for their former employers.
The Fee-Sharing Leaders
The most prominent platform firms in terms of headcount, including Setfords, Taylor Rose, Keystone, and gunnercooke, maintained a considerable lead in size, boasting upwards of 400 lawyers each.
Following them were mid-tier firms like Spencer West, Excello Law, and Nexa Law, along with smaller consultancies like Temple Bright, McCarthy Denning, Davitt Jones Bould, and Bexley Beaumont.
Law firms like Bexley Beaumont and Spencer West showed the highest compound annual growth rates in 2023 among the larger entities. In contrast, Woodstock Legal and Studio Legal emerged as the fastest-growing among the smaller fee-share firms.
In total, over 3,500 lawyers are currently employed across various fee-sharing platform firms in the UK. Codex Edge, using its ATLAS software tool, observed that platform firms primarily sourced talent from smaller practices and other platform setups, with approximately 40 lawyers transitioning from the top 50 firms.
The Fee-Sharing Transform
The research highlighted a persistent shift towards the platform model among lawyers in traditional firms, except for those in ‘magic circle’ firms and in-house roles. Interestingly, in-house lawyers displayed a net outflow from the platform sector, likely due to the emphasis on bringing a substantial client following when transitioning to fee-share setups.
Despite the challenges associated with adapting to a fee-share environment, the larger platform firms achieved impressive retention rates exceeding 85 percent, while smaller firms boasted a perfect retention rate for consultants numbering less than 50.
In terms of legal specialties within platform firms, residential and commercial property dominated, followed by commercial litigation and corporate law. Other prevalent areas included employment law, commercial contracts, family law, and private client services.
Chris Hume, CEO of Codex Edge, underscored the sustained growth and significance of the platform model in the UK legal landscape, anticipating increased regulatory scrutiny in the coming years. He also predicted a trend towards specialization within the sector, akin to traditional law firms, with firms like Davitt Jones Bould, co-founded by former Government Property lawyers over 25 years ago, leading the way by focusing solely on real estate law.
Fee-Share Legal Growth
The UK trend towards fee-share law firms is certainly not confined to the UK. Such platforms are succeeding in the US, Australia, New Zealand and elsewhere, harnessing the move and often the requirement for remote work, or hybrid work opportunities from lawyers.
The growth of such fee-share law firms is a reflection of broader trends toward remote work in the legal industry, which has been accelerated by the COVID-19 pandemic and law tech changes.
The Law 2.0 Conference made the now well-established point that remote employment can result in significant financial savings for law firms and legal professionals.
A recent article from a leading US recruiter LawCrossings showed how virtual law firms are transforming the way legal services are delivered, bringing a range of advantages to the legal sector.
The adoption of hybrid work models, which combine in-office and remote work, is also making law firm offices more flexible and modern. But the trend towards working in fee-share firms will continue to grow for reasons both relevant for lawyers and their law firm and client fee-payers. They meet multiple objectives in a manner that suits all parties, as reflected in the UK reports with the hybrid work platform used by law firms with increasing enthusiasm.
