Market Monitor

Legal Financial Services January 2014

EJ LEGAL

An uncompromising market
But there is light at the end of the tunnel.
The job market remains challenging with few financial services firms having recruited extensively in 2013.
Headcount is still difficult to obtain and securing approval to hire is becoming a frustrating process, resulting in
hiring managers being under a lot of pressure to make sure the new recruits deliver. This has had a substantial
impact on recruitment processes which have become lengthy and less predictable. Our clients are looking for skills
that match the profile required perfectly and, having fought hard for the headcount, are less prepared to compromise.
The market remains unrelentingly tough for more senior candidates. In any case, in-house employers tend to prefer to
recruit lawyers at a junior or mid-level but the lack of opportunity has been exacerbated by the fact that there has been an
increasing trend for employers to bring in more junior solicitors for positions which, in a better market, might have been
designed for more senior people.
Due to global financial instability, there is an increasingly sceptical view of bonuses. Candidates (especially from private practice)
are, therefore, more reluctant to move and/or compromise on salaries due to the unpredictability.
Encouragingly, although the majority of new roles released onto the market in 2013 remain replacement roles, as the market
landscape has evolved in the wake of the financial crisis, new opportunities have arisen. The regulations coming into force have
impacted on the entire financial services sector and, in particular, the asset management and banking industry has had to adapt to
these new requirements. We examined the particularly buoyant areas.

The structured finance revival

Compensation and bitter taste bonuses

Whilst investor appetite in European products has picked up, a higher demand for debt
capital markets and structured finance lawyers has emerged over the last year, with a
particular interest for structured debt finance, bond restructurings, as well as
securitisation experience. However, structured finance lawyers who were highly sought
after prior to 2008 have had to reconsider their salary expectations in a rather saturated
market. Clients are spoilt for choice with candidates from top firms who have extensive
knowledge of a very niche industry.

Overall, compensation in the financial services sector has risen. Lawyers who have stayed
in their current roles may have seen minimal increases in their base salaries and bonuses
remain consistent with the past few years.

Buoyant sectors and skills in demand

The asset management sector, and the asset management divisions of banks, have again
been recruiting steadily and tend to generate a healthy pool of roles across various areas
such as commercial, funds, and derivatives work. Admittedly, as above, roles released are
typically at the junior to mid-level end with fewer job specifications including managerial
responsibilities.
Regulatory pressure on the financial services sector means lawyers with direct in-house
regulatory experience are sought after, particularly those with AIFMD, MiFID and EMIR
knowledge. Due to the dearth of regulatory lawyers in the market with specific technical
knowledge, firms are having to look to lawyers with either more general FS regulatory
experience or those who come from a products background.
Collateral services, custody, and clearing have all seen a great deal of growth over the past
year and so lawyers with relevant experience have had opportunities to move into exciting
new areas in banks, exchanges, and the asset management industry. We have even seen
an increasing demand from corporate broking to integrate lawyers into their business
although not necessarily in an in-house function in reaction to these changes. These are
the types of opportunities that we have not seen since pre-2008.
ISDA Negotiators are still in demand and are paid well but for how long? With plans for
leading institutions to outsource their teams to offshore locations, the future of UK ISDA
Negotiation remains uncertain. Negotiators that have a diverse pool of experience and can
turn their hand to prime brokerage are in greater demand.
Clients continue to turn to contractors to overcome increased activity, assist with new
standalone projects, and counteract head count restrictions. The appetite for temporary
work has improved with lawyers opting for a better work-life balance whilst still looking for
challenging roles.

The few in-house lawyers who received substantial bonuses last year are often the ones
who are looking to move. Overworked key members of under-resourced teams, receiving
little support from their managers, are left with the difficult choice of whether to move for
a similar salary or stay in a dysfunctional team.
As the job market picks up and candidates have more than one option to consider,
employers have to be more competitive with their offers the days are almost behind us
where companies can rely on the adage: they should feel lucky to have a job!

Investment Banking

Asset Management

The first half of 2013 saw a definite increase in the number of roles for lawyers released in
the investment banking sector compared to previous years. The second half of 2013 was
less buoyant as legal teams consolidated and focused on business as usual, as well as
identifying where the key challenges lie for the year ahead.

The status of the market is generally strong and buoyant, yet salaries are not always
competitive, even on the buy side. Skillsets in demand are typically: structured
products/funds, funds administration, IMA specialists, custody, general FS and regulatory.
There has been a lower interest for UCITS lawyers in 2013.

With an increase in regulatory changes and the need for these to be implemented quickly,
the demand for regulatory specialists has rapidly outstripped supply. Litigators with FS
experience, or lawyers with contentious regulatory experience, have also been hot in
demand with many banks facing litigation. Some banks have set up specialist teams to
deal with mis-selling complaints, often resourced by skilled commercial litigators who are
willing to meet tight deadlines and, in return, earn competitive contract rates. Trading and
derivatives continue to be highly sought after skillsets.

PQE

Average Base Salary

(Per Annum UK)

Daily Contract Rate

PQE

Average Base Salary

(Per Annum UK)

Daily Contract Rate

10+

100,000 to 170,000

450 to 600+

8-10

90,000 to 135,000

400 to 550

6-8

85,000 to 110,000

350 to 450

4-6

70,000 to 90,000

300 to 375

10+

120,000+

500 to 600

2-4

70,000 to 90,000

300 to 375

8-10

100,000 to 180,000

450 to 550

NQ 2

55,000 to 75,000

150 to 300

6-8

90,000 to 130,000

400 to 500

Paralegal

30,000 to 45,000

130 to 200

4-6

75,000 to 110,000

350 to 450

2-4

70,000 to 95,000

300 to 400

NQ 2

55,000 to 80,000

180 to 350

ISDA Negotiator

45,000 to 110,000

200 to 450

Paralegal

35,000 to 50,000

150 to 200

In terms of bonuses, the banking sector still suffers from having been at the heart of the
economic crisis over five years ago now and this has had varying implications for all.
Bail-outs, recapitalisations, responses to incoming regulations, political conscience, have
all contributed to the reasons for the spread of bonuses to be found within different banks.
On average, 20-30% is still the most reliable indicator for lawyers at a junior to mid-level.
More senior bonuses have ranged from 20% to as high as 100% but, unfortunately, there
are still very many who, at some institutions, will not have received a bonus at all.

Bonuses typically sit at 10-40% for legal counsel and can reach 60% for senior legal
counsel and Head of Legal roles.

Insurance
Despite the fact that the insurance sector has emerged relatively unscathed from the crisis,
the market has still been generally conservative in its hiring outlook. Insurers, too, are
being affected by the incoming regulations and the need to reduce costs where possible.
Where those hires have been made, remuneration and bonus levels remain strong.

PQE

Average Base Salary

(Per Annum UK)

Daily Contract Rate

10+

120,000 to 175,000

450 to 550

8-10

95,000 to 120,000

375 to 450

6-8

85,000 to 105,000

350 to 400

4-6

72,000 to 90,000

300 to 375

2-4

55,000 to 78,000

250 to 320

NQ 2

50,000 to 65,000

200 to 275

Paralegal

25,000 to 40,000

120 to 160

Bonus range typically sits between 10-40%, and up to 50% at Head of Legal level.

The Outlook For 2014

The economic forecast for this year looks positive as business and consumer confidence
continues to rise and output is expected to pass its pre-recession peak in the second half
of the year. However, whilst unemployment falls rapidly, we do not predict the market
to be booming but an increase in recruitment activity seems likely. Should the predictions
that inflation will fall and wages increase ring true, then we should all feel some easing on
the wallet.

For all our jobs, salary surveys and other useful information visit www.ejlegal.co.uk
t 0207 400 2000 303-306 High Holborn London WC1V 7JZ www.ejgroup.co.uk
EJ LEGAL