2023 Salary Guide: Scottish Legal Sector Overview

During 2022 there was an unparalleled demand in the market for lawyers from both in-house and Private Practice, this was as a direct consequence of the continued “uptick” of the Legal market post Pandemic. The increased levels of workload due to new business growth took numerous Private Practice firms by surprise, with many being unprepared for the increased productivity demands across sub-sectors. The key area of market productivity is always aligned to that of the Scottish economy including renewables, commercial and residential property, food and drink, infrastructure, technology, financial services and fintech. There is always a perineural demand for skillsets in the areas of litigation, corporate restructuring, insolvency and specialist advisory services. 2022 proved no different.

However, by far the largest area of demand was for those individuals with contract negotiation and commercial contracts.  Many firms did not anticipate having to increase headcount so quickly during 2022, however, the increase in transactional activity coupled with the backlog of hiring for those positions placed on hold during the pandemic resulted an almost unsustainable workload peak.  This was further exacerbated with the on-going need to implement technology and digitalisation frameworks as the sector pushed towards infrastructure modernisation post Pandemic.

Historically many Private Practice firms would try to attract the best talent over and above their competitors differentiating themselves by offering flexibility and clear progression frameworks.  As 2023 dawns, baseline salary is key. Retaining staff through the use of golden handcuffs and lock-ins, guaranteeing base line salaries at a level where it would almost be impossible to secure a higher-level places staff “out of reach” of competitor firms. Welcome to salary warfare. This is now the standard operating procedure in the industry. Employees remain the most significant overhead cost and future investment for Private Practice firms.

For Private Practice Firms, the rapidly changing employment market means the balance of power has shifted. The tide has turned from the employer to the employee. Now the negotiating power sits firmly with the latter.

Betsy Williamson CEO, Core-Asset Consulting

In-house, salaries have not kept pace with the levels in private practice, however, there has been a notable % increase during 2022.  Companies have defaulted to the mantra of “if you can’t beat them, join them”.

That said, with the high workload demands in place at junior to mid level within Private Practice, the in-house career route still remains an attractive proposition.  All be it a lower baseline compensation level.  Transitioning in-house may result in a drop in base salary; however, this is often supplemented with a better work life balance, higher year end bonuses, and better overall benefits packages.

The collective result of the above salary polarisation between Private Practice and In-house is leaving the market heavily skewed.  Commercially in most businesses, there is a very real expectation that you “pay for what you get”.  Over-inflated salaries inevitably result in over-inflated workloads and something eventually breaks.

Throughout 2023 we expect to see a continuous flow of demand for lawyers to advise clients on employment law and new, or changes to, existing regulation. There will be an increased advisory demand within UK Regulation as more clarity is provided on how businesses should be operating and what they should be reported on. This is expected to generate substantial amounts of work both domestically and internationally.

With the industry move towards digitalisation and cloud-based storage we anticipate an upward trend towards more robust cyber security and compliance monitoring, specialised professions which have been longstanding within other fields such as Finance, Wealth, Investments, Insurance and Banking. Filling these resource requirements may mean absorbing transferable skills sets from other sectors.

During 2023 we may well see a rebalancing as a number of the larger firms looking to align their Scottish lawyers’ salaries with their English counterparts.  Strategically this would aid in retaining experienced junior and mid-point lawyers (across all sectors), however, it would pose a challenge to the global cost reduction model and the concept of Edinburgh / Scotland being a lower-cost centre, which clearly is no longer the case.

However, the main challenge for all firms Private Practice or in-house will be attracting and retaining the best staff in a limited candidate pool. 

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