Majority of UK managing partners say war for talent is biggest business concern, study finds

Byfield survey shows managing partners are also worried about hybrid working and rising costs
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Recruiting and retaining staff is causing headaches for managing partners Shutterstock

A majority of UK managing partners say recruitment and retention issues are topping their list of business concerns, according to a new survey from legal reputation management consultancy Byfield.

As many as 95% of managing partners cite the so-called ‘war for talent’ as one of their top five concerns, according to Byfield’s survey of UK law firm leaders.

"We're finding it hard to retain our best talent, which is against great economic uncertainty. That combination is hard to manage," admitted one managing partner.

Just under two-thirds of respondents (64%) flagged the challenges around hybrid working as another primary business concern. Managing rising costs, associated client pressure on fees and culture, and conduct issues were equally crucial as key business issues.

However, only 9% cited diversity and inclusion targets and objectives relating to gender and ethnicity as a significant business concern, although 42% agreed such issues were reputationally substantial for them.

Byfield director Michael Evans said the main findings were no surprise, adding: "People-driven businesses need the right people to function and grow."

With increasing alignment between business and reputational concerns, Evans noted multiple pressure points, such as "record-breaking NQ salaries, compression in the middle ranks, an increasingly adverse business climate, high inflation and an incredibly strong dollar that hands an even greater advantage on the face of it to US firms.”

Gautam Bhattacharyya, a partner member of Reed Smith's global board, said: "Clients are wary of big hikes of salaries in their law firms. If a firm increases its associates' salaries in a big way, someone is going to pay for it. It's a concern for clients."

One anonymous law firm partner added that higher wages might not be a panacea. "Not all firms offering that level of salaries have a good reputation – it is only attractive to a small number of talents with certain traits, and often people tend to only stay for a short period," the partner said.

Leadership teams were keen to strike a better balance on hybrid working. Fieldfisher managing partner Robert Shooter said: "Junior lawyers can learn a lot by working together with experienced lawyers. If everyone works too much from home, we will lose our cultural identity.”

Evans suggested the lower levels of concern around diversity and inclusion potentially reflects the fact many firms are making steady progress. One partner said they were "broadly confident [in dealing] with cultural issues and our commitment to ESG/EDI targets and how we tackle those matters. I'm more concerned about matters outside our control in the global environment."

Julia Hayhoe, who like Evans is a former senior executive at Baker McKenzie, said that firms cannot afford to lose the war for talent or “leave untapped the creativity and insight derived from a more diverse and inclusive workforce.”

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