“Wales and Cardiff, in particular, are very attractive for law firms because of the quality of its graduates.” Says Sarah Castle, head of the professional services division at Yolk Recruitment. “Firms with offices across the UK are increasingly moving a lot of their work to Cardiff because there is a lot of top talent here: they can have London-quality work at Cardiff prices.”
But the sector is facing other challenges. “Smaller high-street law firms are diminishing- either merging or being bought out by larger firms to make “super-firms”, says Castle. “They are attractive because they come with existing buildings, people and, most importantly, clients.” For Castle, such small firms “are actually more open to being bought out now because it allows them to continue offering legal services to their local community, but under a bigger brand name”.
Changes in the way law firms are able to operate mean that traditional firms are facing stiff completion from the likes of Tesco and the Co-op, able to complete because of their powerful and trusted brands. These competitors are able to use their size “to offer legal services en masse,” Castle says, “at a cheaper rate and, in some instances, without the cost of using qualified solicitors.”
Many welsh law firms find their traditional work base is diminishing, according to Dermot Cahill, head of Bangor Law School at Bangor University: “The result is that they’re chasing reducing returns on work, much of which is not profitable, and there’s the need to develop new areas of remunerative work.” For Cahill, the way forward “is to become boutique firms, offering services to a wider array of businesses and public bodies”.
With the country’s economy performing well, Cahill believes welsh law firms should provide “good value to help grow the Welsh economy, however, the reality is that many will not consider doing this kind of work, so they leave it to larger firms who can charge exorbitant fees.” How could things change positively in the future? “Over the next five years I would like to see law firms across Wales developing more commercial law expertise," Cahill says. “Many young lawyers now will have studied subjects that explore areas of law that their employers didn’t have the opportunity to take when they were qualifying, so there’s room for expansion, such as in intellectual property law and company law.”
There’s plenty of work for those with the right skills says Castle: “Demand for corporate commercial lawyers has picked up recently, with commercial property lawyers becoming more settled since the surge in demand in 2016.”
More graduates are staying in Wales, Castle believes. “Because we have some excellent firms offering graduate positions where they can gain real hands-on and file management experience.” But, she says: “A large number will still choose to work across the (Severn) bridge in Bristol because the pay is higher – even with the costs of commuting and bridge toll.”
So, she says: “Most firms in Cardiff know they have to pay more to attract and retain talent. Firms in South Wales are now more open to flexible working or increasing benefits to stand out. At a senior level, high-street firms are promoting lawyers and it’s great to see young lawyers reaching partnership level so early in their careers.”
Cahill flags up changes on the horizon how lawyers qualify. “I’m concerned that competence in EU law may not future in the so-called ‘super exam’ that is proposed to replace the Legal Practice Course.” It's anticipated that from 2020 law graduates will need to take this exam after university, before they can practice, “while it will become cheaper to qualify, its vital that EU law is included in this, but at the moments there’s a chance it won’t be. The UK will adopt all existing EU law onto the statute books at the moment of leaving the EU – and the lawyers of the future need to be able to intelligently interpret and understand it.”
Originally published in Wales Business Insider November 2017 edition.