Polishing the old crystal ball…
It is difficult to know what 2023 is going to bring. Let’s be honest, the predictions of would-be Nostradamuses in January 2022 would have fallen apart in myriad ways. (Did anyone predict three Prime Ministers?) But, it does seem clear we are in recession and – if the IMF are to be believed – that a rocky twelve months lies ahead.
I asked Debbie Serota of our corporate team for her thoughts: “If the Pandemic has taught us anything it’s that we can’t predict what will happen with any great certainty, but clients are entering the market and dealing in a much more cautious manner.”
From a law firm point of view – and a corporate law firm point of view in particular – this will be concerning. Traditional wisdom has it that other teams, such as litigation and restructuring do well from recessions, while corporate and real estate feel their margins squeezed tighter at every turn. (Although that was all expected to happen when Covid struck too, and it absolutely didn’t – so who knows with traditional wisdom anymore?) Certainly, that was the case when we all last stepped on this merry go round in 2008/2009, so it seems likely it will happen again.
‘Reorganisation’ was, I remember, the buzz word from that time. With transactional teams at major law firms reorganising their personnel, which of course means some were given a sorry tap on the shoulder and a sad farewell. (Having said that, a quick search of The Lawyer’s archive sees such phrases as ‘staffing clampdown’ and ‘clear-out’, so not everyone was so pleasantly euphemistic.) The result is though that some teams – some of the larger teams in particular – will become leaner to deal with the difficult circumstances.
But as with all crises, there’s a sizeable portion of opportunity wrapped within it. Yes, there are larger law firms who have larger transactional teams and they will lose people. It will be absolutely horrible for those concerned. However, there are smaller teams who will be in a position to pick up more work from clients – also recession struck – who have decided to shop around a bit, and now have greater needs for experienced transactional lawyers.
And some of those lawyers leaving big law will undoubtedly welcome the opportunity to try something different. To go to a different type of law firm, or away from the drudgery of a commute into London. Yes, there will be those wedded to the idea of a straight-line trajectory of a career, who will be horrified that an upwards journey has veered off course. But there will be others who will use this as a moment to revaluate, to see what else is out there.
Obviously, every reorganisation or staffing clampdown or clear-out is traumatic. You don’t want it to happen to anyone. But if you have the right skillset, even in a tough market, there are homes out there. Good homes which will give you something different for your career.
As I said, I’m trying not to be in the business of prophesying the future. I fear that I would get a many great things wrong. But should the media and the forecasts prove correct and recession is here, then it will be a bumpy twelve months, but it will also be one which might bring opportunities.
Richard James is a talent acquisition researcher for partner hires at Irwin Mitchell.
