Time to retrain as a lawyer? Legal industry faces ‘war for talent’

Luke Graham, special to CNBC

The legal profession faces a "war for talent" over the next year as law firms battle to hire the best staff in the U.K., according to the CEO of the first British legal company to list in London.

Michael Ward, chief executive of Gateley, the U.K.'s first publicly listed law company, shared his outlook on the industry while speaking to CNBC about the company's full year results. His views may come as a surprise to the many students who complete law school in the U.K. but struggle to gain a training contract subsequently.

Image source: Getty Images

"In the next 12 months, I think the challenges that we face is a war of talent," Ward told CNBC in a phone interview on Tuesday. "There was underinvestment in the industry during the recession leading to certain hotspots for attracting and retaining the right people, so I think the costs are going to be under pressure."

Ward said that law firms might have to absorb these costs rather than pass them on to clients.

"The clients aren't too ready to have those costs passed on. I think they quite like the rate they managed to negotiate in the difficult times so there'll be a little bit of tension there."

According to recruitment consultancy Hudson, there is large demand for legal professionals with two to five years' experience and for senior candidates. However, over 50 percent of professionals told Hudson that better benefits were important to their next career move, meaning law firms might have to offer better pay and incentives to attract the best.

Michael Ward, CEO of Gateley, the UK's first listed law firm
Gateley becomes first law firm to join UK stock market

"2015 sees confidence firmly return to the legal community and an appetite for growth has led to a sharp increase in permanent and interim recruitment across the UK," said Hudson's legal team in a post to the consultancy's website.

" Real estate in particular continues to see the greatest demand for lawyers at all levels, which in turn has created additional openings and opportunities in associated disciplines of planning, housing and construction."

Gateley became the first U.K. law firm to list on the London stock market when it floated on the Alternative Investment Market (AIM) in June this year. AIM is a sub-market of the London Stock Exchange, which allows smaller companies to float. The corporate law company raised £30 million ($46.23 million) from its initial public offering (IPO) and currently has a market capitalisation of £107 million ($164.9 million).

On Tuesday, it published its full-year results for the year ending 30 April 2015, its last as a private company. The results showed revenue grew 11.5 percent to £60.9 million and pre-tax profits rose 32.4 percent to £9.8 million.

Michael Ward, CEO of Gateley, the UK's first listed law firm
Ben Phillips | Gateley

Ward said he was delighted with the results and like Hudson, referenced real estate as an area of growth.

"The growth really is in the three business sectors: Banking and finance, corporate and property. All those teams delivered double digit growth. We believe it is a result of increased client confidence, looking to things and involve us in their plans," he said.

"It has been an improving development market place in the property sector," added Ward. "The house building sector is doing very well and we certainly benefitted from that."

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