With less merger and acquisition (M&A) activity in the banking sector, demand for legal experts in this area has dwindled. This is due in part to banks lending less to business, as well as red tape restricting law firms’ international expansion plans. Candidate numbers have therefore risen and international placements have also been adversely affected.

“Without the lending, there are less transactions on the practice side,” says Nick Harrington at Eximius Law. “If the banks are not lending to help companies with M&A and transactions, there is less demand for lawyers to advise on the acquisitions and so the sector is stagnant.”

Naomi Birch, recruitment and resourcing manager at law firm Osborne Clarke, says that following the recession a great many candidates are on the market.

“Sourcing lawyers in specialist areas remains a challenge - you really have to wade through a good number of CVs before finding the best ones.”

Naveen Tuli, managing director of legal recruiter Laurence Simons, told Recruiter that the sector is currently short of lawyers with experience. “If you are a lawyer with four to six years’ experience with a good firm, you will find companies are interested in you. The trouble is it has to be a convincing proposition to get them to move.”

Paul Wingfield, managing director of William James Recruitment, adds that commercial lawyers also remain in short supply. “There is a shortage of senior level talent. Lawyers with commercial, employment law and corporate commercial are also in demand. There is a real shortage of commercial litigators with five to 10 years plus experience.”

And while there has been an increase in vacancies in the sector, overall candidates already in roles are more cautious about leaving for pastures new, according to Jemma Tack, recruitment team manager at Freshfields Bruckhaus Deringer. “While there’s been an increase in the number of vacancies across fee earning and business services throughout the legal sector, some caution still remains. The market is certainly more competitive, while candidate behaviour has changed because there are now more choices open to them.”

Despite this, margins remain tight. Tack operates a preferred supplier list and negotiates rates, while Birch told Recruiter that agencies and headhunters have had to be far more flexible on fees.

Future growth in the sector appears to be overseas in emerging markets but currently restrictions to entry for UK law firms into countries like India and Brazil apply, according to Tuli.

“In countries like India and Brazil, there are restrictions on international law firms opening up shop. Once they are lifted, you’d have a huge influx of US and UK law firms into those markets. A lot of US and UK law firms are looking for growth internationally rather than domestically.”

And in-depth knowledge of such international markets is where recruiters can really prove their worth, says Tack. “Freshfields is always looking for an agency that understands who we are looking for, has a strong network of candidates and excellent customer service. As Freshfields is an international law firm, it is beneficial to work with agencies that also have an international network.”

Tuli says: “Our primary USP is our international network. If a client is in London and looking to grow its business into Latin America, India or China, we have to have an office on the ground to cater for their international expansion plans. That is where our business adds value.”