The Blog
What Do Winners Look Like?
Posted: 24 April 2015
Well in employment law they look like solicitors, obviously... don’t they? The £26bn legal service industry still considers the employment law subject specialism a "core" commercial one, and so employment law must be a business in the billions. Well, maybe. The Law Society registered 12,591 solicitors who could do employment law, and assuming an average of £225k fees per fee earner (a common benchmark in the 50-250 firm level) then employment law could be a £2.8bn sector. Job done; thanks.
The trouble is knowing how to bone up on employment law and being an employment law specialist are two very different things. Practising certificate data is notoriously muddy, though; it ranges from full time experts in international pensions and lateral hiring to advising the chap in the golf club as you did his conveyance a few years ago too. Probably a third of the Law Society’s "all-comers" data would be regularly tackling employment law issues, and their directory lists 5059 overall and 4322 focused on employment law specifically (not pensions or tax). That means we’re talking about a sub £1bn sector in all probability.
When you get below the top 250 firms, the fee earner averages drop consistently too, to nearer half the top 250 rates typically. The NatWest research in 2014 showed median fee earner sales per year of £126k in small firms and £136k overall (on a typically small firm sample base) A market size of under £1bn is looking even more likely, therefore, significantly so. There is also no distinction drawn between advising employees or employers (although the majority will work for employers) so sizing just the commercial client work reduces it further (albeit not that much). Only Slaters among the larger players makes a play for employees only, and for most employee advice is ex-board and HNW individuals typically; the core is overwhelmingly acting for corporates.
The ELA shows membership of c6k, and their directory lists 4702 names so that’s probably a fair indication of how many solicitors, barristers, public sector and in-house lawyers consider employment law to be a core skill too (doing it 25% of the time or more, by their definition). LinkedIn even has 3993 under the category "employment solicitor", so the universe is getting closer in view now. In the UK LinkedIn also it has 2856 in-house lawyers with employment law in their brief or skill set, and this breaks down as a cross-over of 1037 in both. (The rise of in-house teams covering employee relations issues is a quiet revolution to0, worthy of much more comment, but later, perhaps.) The core number of people doing employment law more than occasionally is 3-4k, it seems. The question is how many do it most or all of the time?
Focusing on the private practice sector, there are less than 100 firms recommended by the dozen or so Guides that lawyers see as a key part of the marketing budgets: ALM, ELG, The Lex100, Legal 500, Lexcel, Legal Experts, Chambers, Meritas, Lawyers Associated Worldwide, SuperLawyers, Martindale, Waterlows, WTR1000? The driver behind all of these is not vanity (although that is there in spades), but a simple fear that the deal flow and litigation drivers for new business may not be enough, so these "BillBoards" come in handy. We found 163 firms who account for over 2320 solicitors for whom we would say employment law is a core function (often the only function). We have probably still missed a handful of regional specialists and some lone superheroes in smaller commercial practices, so we’ll keep looking, but we know we’ve got it over 98% covered: this really is the "core" of the market.
But here’s the Thing: there are also now around 170 firms, mostly regulatory consultancies, but also many hybrids from HR consulting, accountancy, publishing, insurance and software based teams offering very competent employment law solutions, usually solicitor led too. Quite why a solicitor moving from RBS Mentor to Axiom or from Stephensons to Ellis Whittam is not considered "lateral hiring" is unclear; the focus is on skills and work-life balance, not "portables" no doubt, but the quantity of these moves is significant and rising. There is a whole "third sector" out there which the profession seems unsure how to address.
We look at movements in market share to predict long term economic practicalities. From an individual level, to a team one, a firm wide one, a sectoral ones and ultimately an industry wide one, this matters. If you think the employment law market is £2bn+ you’re deluding yourself. If you think the in-house or regulatory consultancy sectors are side shows you’re wrong. To see the real numbers at industry level, sectorally split and by type of supplier you need to see the Employment Law report we’ve just published. It’s the only report to compare all the players and their appeal to clients of different sizes.
Our analysis of where the top 2-3k solicitors now live and work suggests winners now come in many shapes and sizes. The magic and silver circle firms have pretty much given up on day-to-day employment law work. You simply can’t get premium hourly rates there any more, or not their sort of premium rates anyway. That’s around 20% of the market actively looking elsewhere already. So once again the realistic market size for employment law drops. At the other end of the scale the High Street firms have been unceremoniously kicked out of the SME and micro firm employment law market pretty comprehensively now by the insurers and regulatory consultancies.
The good news is that there are many ways now to be a winner. And yes, most still involve solicitors in the mix somewhere. But assuming that the needs of the 29 firms focused on global clients will somehow protect the "solicitor" brand for all is misguided. The employment teams focused on major clients may just have the room to be complacent for a while; we’ll see. But the majority of firms still competing for medium sized clients and SMEs are up against it.
Tempus fugit.
We believe the people who make up the market should be the ones with the best data about it. Not the bankers or VCs; not the other industries; not the regulators: you. So we’ve done the homework for you. We use their economic approaches, their corporate finance disciplines, the sort of market intelligence they build - to show you how others see you. We also believe you’ll make the best call. Make it from an evidence based approach; just facts: start here.
The trouble is knowing how to bone up on employment law and being an employment law specialist are two very different things. Practising certificate data is notoriously muddy, though; it ranges from full time experts in international pensions and lateral hiring to advising the chap in the golf club as you did his conveyance a few years ago too. Probably a third of the Law Society’s "all-comers" data would be regularly tackling employment law issues, and their directory lists 5059 overall and 4322 focused on employment law specifically (not pensions or tax). That means we’re talking about a sub £1bn sector in all probability.
When you get below the top 250 firms, the fee earner averages drop consistently too, to nearer half the top 250 rates typically. The NatWest research in 2014 showed median fee earner sales per year of £126k in small firms and £136k overall (on a typically small firm sample base) A market size of under £1bn is looking even more likely, therefore, significantly so. There is also no distinction drawn between advising employees or employers (although the majority will work for employers) so sizing just the commercial client work reduces it further (albeit not that much). Only Slaters among the larger players makes a play for employees only, and for most employee advice is ex-board and HNW individuals typically; the core is overwhelmingly acting for corporates.
The ELA shows membership of c6k, and their directory lists 4702 names so that’s probably a fair indication of how many solicitors, barristers, public sector and in-house lawyers consider employment law to be a core skill too (doing it 25% of the time or more, by their definition). LinkedIn even has 3993 under the category "employment solicitor", so the universe is getting closer in view now. In the UK LinkedIn also it has 2856 in-house lawyers with employment law in their brief or skill set, and this breaks down as a cross-over of 1037 in both. (The rise of in-house teams covering employee relations issues is a quiet revolution to0, worthy of much more comment, but later, perhaps.) The core number of people doing employment law more than occasionally is 3-4k, it seems. The question is how many do it most or all of the time?
Focusing on the private practice sector, there are less than 100 firms recommended by the dozen or so Guides that lawyers see as a key part of the marketing budgets: ALM, ELG, The Lex100, Legal 500, Lexcel, Legal Experts, Chambers, Meritas, Lawyers Associated Worldwide, SuperLawyers, Martindale, Waterlows, WTR1000? The driver behind all of these is not vanity (although that is there in spades), but a simple fear that the deal flow and litigation drivers for new business may not be enough, so these "BillBoards" come in handy. We found 163 firms who account for over 2320 solicitors for whom we would say employment law is a core function (often the only function). We have probably still missed a handful of regional specialists and some lone superheroes in smaller commercial practices, so we’ll keep looking, but we know we’ve got it over 98% covered: this really is the "core" of the market.
But here’s the Thing: there are also now around 170 firms, mostly regulatory consultancies, but also many hybrids from HR consulting, accountancy, publishing, insurance and software based teams offering very competent employment law solutions, usually solicitor led too. Quite why a solicitor moving from RBS Mentor to Axiom or from Stephensons to Ellis Whittam is not considered "lateral hiring" is unclear; the focus is on skills and work-life balance, not "portables" no doubt, but the quantity of these moves is significant and rising. There is a whole "third sector" out there which the profession seems unsure how to address.
We look at movements in market share to predict long term economic practicalities. From an individual level, to a team one, a firm wide one, a sectoral ones and ultimately an industry wide one, this matters. If you think the employment law market is £2bn+ you’re deluding yourself. If you think the in-house or regulatory consultancy sectors are side shows you’re wrong. To see the real numbers at industry level, sectorally split and by type of supplier you need to see the Employment Law report we’ve just published. It’s the only report to compare all the players and their appeal to clients of different sizes.
Our analysis of where the top 2-3k solicitors now live and work suggests winners now come in many shapes and sizes. The magic and silver circle firms have pretty much given up on day-to-day employment law work. You simply can’t get premium hourly rates there any more, or not their sort of premium rates anyway. That’s around 20% of the market actively looking elsewhere already. So once again the realistic market size for employment law drops. At the other end of the scale the High Street firms have been unceremoniously kicked out of the SME and micro firm employment law market pretty comprehensively now by the insurers and regulatory consultancies.
The good news is that there are many ways now to be a winner. And yes, most still involve solicitors in the mix somewhere. But assuming that the needs of the 29 firms focused on global clients will somehow protect the "solicitor" brand for all is misguided. The employment teams focused on major clients may just have the room to be complacent for a while; we’ll see. But the majority of firms still competing for medium sized clients and SMEs are up against it.
Tempus fugit.
We believe the people who make up the market should be the ones with the best data about it. Not the bankers or VCs; not the other industries; not the regulators: you. So we’ve done the homework for you. We use their economic approaches, their corporate finance disciplines, the sort of market intelligence they build - to show you how others see you. We also believe you’ll make the best call. Make it from an evidence based approach; just facts: start here.
3HR plc
A law firm (ABS) and insurance intermediary building a strong position in outsourced HR and employee benefits services for larger and global firms.
Employment Law and Employee Relations
There may be over 4000 employment lawyers in the UK, but there are only are 150 law firms focusing around 2200 solicitors and fee earners on employment law services for UK business as a core service nationally. There are also 170+ consultancy businesses doing so now too. They each have their strengths and weaknesses, and this report highlights how this market now works, how it will perform to 2020, and more importantly what GCs expect from it irrespective of who is supplying it.
For law firms - is version 1.0 of client marketing enough any more, or will version 5.0 deliver now? Having the best people may no longer be enough and the Who?s Who guides take you only so far. Segmenting clients by size and type is key, and this report shows the competitive dynamics involved at each level. What are the 20+ firms who just do employment law up to now? How successful are law firms at delivering HR consulting solutions too? Why are Irwin Mitchell and others tackling the regulatory consultancy market head on now? And how should it be done?
From the core market economics to what GCs will and won?t outsource - and all points in between - the competitive axes in play are spelt out in detail. The 5 key issues (and the components of them) behind a commercial employment law service are examined in rigorous detail. This then informs assessing what to do next with the content marketing strategies, whether to bring an HR function in-house, what the critical mass is for a national team, the role of IT and many more questions are addressed. It need not be a matter of matching the millions behind teams like Riverview, but you do have to know how to play it smartly. This is the evidence you need to make your choices - all based on hard economic facts. Comparative corporate finance approaches to investment are clarified so you can see how steep the hill could be for your chosen strategy.
Summarising 70 of the leading players in terms of their market share from 1995 and projected to 2020, you can see at a glance how the main consulting players are doing too. Unique market share charts covering decade of performance for suppliers show who is struggling, who?s just swimming with the tide and who?s setting the pace. Dismiss these challengers at your peril, they are already represented on some of the major blue chip legal panels and they want more.
Every supplier is listed and click throughs from logos and innovative infographics enable GCs and purchasers of employment law services to assess each supplier directly.
This major Report is comprehensive and full of surprises - the largest employment law specialist is no longer a law firm - 9 of the top 20 suppliers are consultancies, not law firm Big brands... Perhaps most important of all: it really is no longer an "Us v Them" choice in the mind of even professional buyers any more - GCs are as likely to buy from a consultancy as a law firm now. The costs of market entry also favour the innovators - be they solicitor led or not - with teams like 3HR, HCR, Law at Work, Outset and rRadar showing how its done and done well.
This is indispensable reading and research for any legal services team looking at developing in employment law. The evidence bundle for your strategic away day - all of the key issues for teams managing a future in employment law are critically examined and the evidence presented.
Then it?s your call - we can?t promise you more sales, but we can level the playing field, and we can certainly save you a vast amount of time in collating the facts you need to make your plays effective and lasting.
Employment Tribunal list and fee changes hit law firms hard too. On top of PI business dwindling, it has made the more commercial firms get real. To help you up your game - get your copy of this Report today.
Price: £1250 |
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