In a notable shift within the legal industry, fee-share law firms have outpaced traditional practices in lawyer recruitment as per the recent data.
New research highlights a significant trend in the legal sector: fee-share law firms are outstripping traditional firms in terms of growth. During the first half of 2024, two fee-share firms recruited more lawyers than any traditional firm. This trend is a stark contrast to the ‘magic circle’ firms, which faced a substantial outflow of lawyers, indicating potential burnout or career realignments.
According to the data, Setfords topped the recruitment chart by hiring 58 lawyers, while Taylor Rose, which operates a hybrid model combining both fee-share and traditional practices, recruited 48. The leading traditional firm in recruitment was the US-based Paul Weiss with 45 hires. Other notable fee-share firms included Keystone Law and DWF, recruiting 43 and 40 lawyers, respectively.
This analysis from Instant Impact on recruitment patterns indicates that while the top 100 law firms saw a minor decrease in their legal staff, particularly within the ‘magic circle’, fee-share firms continued to attract a steady stream of new hires. This has been attributed to the appeal of the fee-share model, which offers lawyers increased flexibility and potential for higher earnings. Moreover, in-house departments have also gained traction, attracting legal professionals with their stability and benefits.
The move towards fee-share models is also reflected in their impressive retention rates. The top 10 fee-share firms all posted retention rates exceeding 90% for the first half of the year, with McCarthy Denning leading at 99%. This suggests a high level of satisfaction among lawyers within these firms, reinforcing the attractiveness of this business model.
Sector growth has also been evident in the rising demand for skills in areas such as torts, consumer law, and debt management, as noted by Chris Hume, CEO of Codex Edge. The diversification of offerings within fee-share firms points to their evolving presence within the UK legal landscape.
The ‘big four’ fee-share firms — Setfords, Taylor Rose, Keystone, and gunnercooke — have significantly increased their headcount, fostering a robust competitive environment. Smaller firms like Mezzle have exhibited the highest percentage growth, showcasing the dynamic nature of this sector.
This evolution reflects a broader shift in the legal industry, where alternative models are gaining ground over traditional practices. The success of the fee-share model demonstrates its viability and competitiveness, marking a significant development in legal service provision.
The legal industry’s landscape is changing, with fee-share law firms leading the charge in this evolution. Their growth in lawyer recruitment and retention is testament to their innovative approach and appeal. As the sector adapts to new demands and preferences, these firms are becoming an integral part of the legal services ecosystem, offering a viable alternative to conventional law firms.
