TOP performing lawyers are finding themselves in greater demand as firms battle to poach key teams and partners from each other amid a skills shortage.
With the sector enjoying a strong rebound in business following the long downturn, lawyers are lured away to join rival firms on better terms, often taking their clients and support teams with them.
Malcolm McPherson, senior partner at HBJ Gateley, said that competition is building for a small pool of successful lawyers who are increasingly willing to jump ship in order to progress their careers.
Speaking to Scotland on Sunday after revealing that the firm enjoyed a surge in turnover last year, McPherson said he finds it easier to grow by attracting successful teams into his firm than by mergers and acquisitions.
He believes more firms will adopt such tactics as the dust settles after the wave of consolidation that has swept the sector north of the Border.
“I think there will be more of that [consolidation] but not as much as before,” he said. “Most of the firms that want to be national are national. We find that lateral hire [the tactic of luring rival staff into a firm] is an easier way to grow than mergers. Encouraging teams to come here and having a strong financial model is part of that. Of course, other firms are also looking at that model.”
His comments came after rival Maclay Murray & Spens (MMS) said it was open-minded about jumping on the consolidation bandwagon, whether through a larger merger or bolt-on acquisitions. However, chief executive Kenneth Shand said MMS was also looking at the option of lateral hires.
Already, the competitive atmosphere means that salaries for trained lawyers below partner level are increasing. McPherson said that with the recovery in full swing, picking up new business was less of a problem than finding staff to do the extra work. The shortage has been exacerbated by the fact that many firms closed their trainee programmes during the recession.
McPherson said that HBJ Gateley plans to grow turnover by about 50 per cent over the next five years, to roughly £30 million, and the key to that will be hiring the right people.
McPherson said he keeps an “open door” policy and regularly talks to lawyers thinking of jumping ship from a rival.
“People don’t now believe that a partnership is for life, which it once was,” he said. “Individuals in firms can be more successful than the firm itself.”
HBJ Gateley reported a 9.3 per cent increase in turnover from £16.2m to £17.7m in the year to 30 April. It posted a 15 per cent uplift to its profits, from £7.1m to £8.4m.