It has been an unpredictable year for many sectors across the UK, and particularly for those working within the legal and finance professions. As the market continues to adapt to the impacts of the pandemic, it is important for both employers and professionals to understand how the sectors have evolved in response to the changing market.
At Michael Page, we have already seen demand rise significantly for skills in some practice areas and a decrease in others. Looking at recruitment in legal, there has been a notable increase in vacancies across disciplines such as conveyancing and employment law. In finance, specialists are seeing restructuring and insolvency businesses strengthen their teams across all levels in anticipation for a busier first quarter in 2021.
In this article, we shine the spotlight on the world of restructuring and insolvency, with a focus on market trends and the outlook for 2021.
Impacts of Covid-19 and the outlook for insolvency in 2021
During a recent conversation with John Jeffreys, Restructuring and Insolvency Partner at national law firm Freeths, it was highlighted that the local insolvency market in the Midlands has been relatively benign in recent years, with notable exceptions in retail and casual dining.
Jeffreys explained: “This was on the back of an extended period of low interest rates and a buoyant local industry, particularly in the automotive and aerospace sectors, together with other factors that led to the lowest levels of corporate failures in many years.”
However, the Business Impact of Covid-19 Survey (BICS) found that up to 11% of the SME business leaders who responded felt their business was at moderate or severe risk of insolvency. Against such forecasts, it is certainly an area in which some experts are predicting a sharp increase in activity levels.
Jeffreys also said that, “a combination of unprecedented events has brought significant challenges to businesses of all shapes and sizes and across many different sectors. The full impact of Covid-19 has yet to be felt and is but one such event. The increasing prospect of a no-deal Brexit is another that has been overshadowed by the impact of the pandemic so far, but remains a significant threat to business prosperity.”
Vijay Merchant, Senior Director at Duff and Phelps in Birmingham recently told us that: “Corporate insolvency levels across the country remain at near historic low levels, which is not a surprise given the billions in support provided by the Government in financial aid and support schemes, coupled with the current moratorium preventing creditors from taking any enforcement action.”
He explained that while this may have been the case, these support schemes will inevitably end and towards the end of Q1 2021, businesses will undoubtedly be faced with cash flow pressures. Merchant says this will occur, “As the repayment of creditor arrears materialise and the true financial impact of the lockdown restrictions are unmasked.”
Hiring trends in the sector: Where is talent most sought after?
Will this anticipated increase in work lead to a spike in recruitment in the restructuring and insolvency sector and, if so, when is this likely to happen?
Jeffreys predicts that, “experienced restructuring professionals are likely to be in high demand over the coming months and potentially years to support local businesses navigate and survive the challenges that lie ahead.”
Conor Farrell, Manager for Michael Page Legal in Birmingham, says that: “This anticipated increase in activity levels could mean that it will become increasingly difficult for firms to attract experienced Insolvency lawyers in 2021."
This is particularly the case within regional markets where a lot of the teams are smaller and therefore the existing candidate pool is already somewhat limited. He explains that, “it has always been a challenge for Midlands law firms to recruit experienced insolvency lawyers and with workloads predicted to increase, we anticipate there will be a huge demand for candidates with at least two years’ post-qualification experience.”
How can businesses get ahead of the war for talent?
Insolvency teams will already have an idea of their business plan and projections for the next year, and we expect that increasing headcount may become a common theme for many teams.
Matt Taylor, Regional Manager at Michael Page Finance in Birmingham, says it is simply a case of planning ahead: “If it is already looking likely that you may need to hire in 2021, then you should strike while the iron is hot.”
He continued to explain that: “All signs are pointing to it being a fight for the best insolvency talent in 2021 so we recommend that partners start to seriously think about where resource could be needed and open up conversations with prospective candidates now.”
Exploring the market as a candidate in 2021
For those insolvency professionals considering looking at the legal and finance job markets, the demand will initially centre largely around those with significant post-qualification insolvency experience. However, for more junior legal and finance candidates, this summer’s round of newly qualified recruitment processes saw some law practices recruit multiple juniors into their teams. It is also probable that firms will become more interested in junior candidates where the more experienced vacancies prove harder to fill.
If you would like to discuss how we can support you with hiring or finding a role in 2021, please get in touch for a confidential discussion.
Alternatively, we can also provide you with bespoke market insights and salary benchmarking for your function, industry, and region.