In both the UK and US legal sectors, talent markets have continued at pace over the course of this year – and with US firms establishing a larger share of the London market, there are some interesting comparisons to be drawn around hiring strategy, culture and compensation between each region. While the nature of each market makes it difficult to compare like for like, overall it remains a close race between the US and UK as to which is ahead in terms of hiring recruitment and activity.  

The US naturally remains the largest recruitment market globally, particularly with the size and scope of the legal market there – in New York alone there are around 13,500 associates in the AM Law 200, compared to nearly 6,000 in London in the same group of firms (which are the fastest growing at present).

The UK market, while robust, simply does not match the sheer scale of the US market. In lateral move terms, there have been nearly 1,500 associate moves in that group in New York over the past 12 months, compared to 680 in London. While that puts both geographies roughly at 11% hiring, the US as a whole has seen 14% of the AM Law 200 associate population move to a new firm in the past 12 months. The scale in the London market is comparably smaller.  

Nonetheless, there are signs of increased law firm recruiting activity in the UK, particularly in finance, corporate and niche areas such as employment, tax and antitrust. There is a clear indication of commitment to growing the London market from firms with head offices overseas, especially for US firms who have done some of their biggest partner hiring in the past five years. While this indicates a positive investment in the UK market, the scale, volume and speed of hiring in the US will always make it a leader in recruiting activity for the year.

Reflections across the pond

In terms of the strategy behind recruitment and hiring, there have always been some key cultural differences between the UK and the US, and these have seemed to endure despite US firms growing their presence in London.

US hiring is very transactional, transparent and quick. There is a familiarity of using professional services to outsource parts of the business, particularly with a ‘time equals money’ mindset.

In the UK, due to the smaller size of the market and prospective talent pool, it could be argued that there are greater concerns from firms around being seen to be ‘desperate’ to hire, following strict process (somewhat exacerbated by GDPR) and the complexities and nuances of firms in the London market.

For example, in the New York market, you can place at a range of firms within the AM Law 100, and the salary is most likely to be the same due to the commonality of the lockstep system, so the candidate can focus more on the culture, practice and other aspects of work.

In London, target hours, compensation and size of practice is much more varied, so the recruiting style is different. Overall, while firms across each market might borrow thinking or strategy from the other in small ways, it is unlikely to be the case that strategies will overly cross-pollinate, with one market trying to replicate the other.

The stealth layoff: vulnerability or immunity?

Fears over so-called ‘stealth layoffs’ have gained a fair amount of attention in recent months, as firms in both the US and UK have weathered some economic uncertainty. While stealth layoffs may be a concern in the US, the UK market is somewhat insulated from this trend due to its employment regulation and a slower approach to hiring.

With stronger legal and cultural protections for employees, the UK market is resultingly far more resilient to stealth layoffs than the US. In particular, employment laws in the UK provide greater job security.

Even beyond legal protections, cultural norms often emphasise transparency in employment practices in the UK, and so firms are more conscious of their reputations, minding and monitoring the market gossip that traverses within their space. Likewise, due to longer notice periods, firms in the UK will have a longer view on hiring, whereas the US can be more reactive because of ‘at will’ employment.  

Culture, compensation and competition

Differences in culture and compensation are one of the key contrasts that we see between the UK and US markets, and they significantly impact the legal recruitment landscape.

Known for its lockstep model and high salaries, the US is leading more UK firms to feel under pressure to compete in order to both attract and retain top talent. The competitive salary landscape in the US has been a key factor driving salary increases and changes in the London market across all firms, although a reasonable amount of such changes are equally exchange-rate driven.

Culturally, the US market’s flexibility and rapid hiring processes contrast with the more measured approach often seen in the UK. This cultural difference can influence how recruitment strategies are developed and implemented in each region and is also largely why both markets still have key distinctions and processes that are locally relevant.

Overall, then, forcibly implementing hiring strategies from across the pond won’t herald the best results if the differences in size, set-up, spend and culture between markets and individual firms are too great to effectively mirror. As firms continue to pursue growth through the successful recruitment and retention of top talent in a highly competitive market, they should embrace what differences lie between themselves and the competition and reframe these as potentially powerful pull factors. 

Nathan Peart is executive director of associate recruiting at Major Lindsey & Africa.