Amid an increasingly complex financial environment, the demand for Channel Islands-savvy lawyers is surging among City firms. Many jersey and guernsey law firms are finding value in putting people on the ground in the City, while others are focusing on finding ‘jurisdiction-agnostic’ talent to find a cutting edge
There has never been a better time to be a newly qualified lawyer. The number of legal vacancies grew by 99.8% year-on-year in 2021 across England and Wales, and new jobs hit a quarterly peak in the second quarter of last year, with practices advertising 2,800 new jobs for lawyers.
This represented a 521.7% rise compared with the same quarter a year earlier, and a 36% jump from Q2 2019, according to data published by recruitment firm BCL Legal.
Data from the UK government’s Office for National Statistics reveals the legal sector reported historically high turnovers last year, as the fallout from the Covid-19 pandemic led to a surge in demand for support on M&A activity, private equity deals and real estate sales.
The 13% rise in the legal sector’s turnover prompted ferocious battles between law firms to recruit and retain talent. It has resulted in salaries soaring.
A newly qualified lawyer starting out in the Channel Islands can command a pay packet in the range of £58,000-£62,000 year, according to the 2021 Robert Walters Salary Survey. Not bad work if you can get it, especially as inflation threatens to reach double digits this year and the cost of living crisis bites.
However, for legal firms on the islands, attracting and retaining talented lawyers is a challenge, particularly for practices attempting to demonstrate their City of London credentials.
Raulin Amy, a Partner in Ogier’s Jersey office, says: “Brexit and Covid-19 have both been catalysts for increased volumes of legal work – so when the City is busy, the lawyers in Jersey and Guernsey are busy. This makes recruiting harder as the City firms are also looking for more lawyers at the same time as us.”
Ben Morgan, Partner and Head of Guernsey Funds at Carey Olsen, agrees. “The demand for lawyers is huge, so [Channel Islands firms] end up paying a high price for talent when we compete in the same market as the City law firms.”
But given the demand for the experience that City lawyers have, and the relatively small talent pool of qualified lawyers residing on the islands, Amy believes practices have little choice but to venture into recruiting from the expensive skillset available onshore.
“Generally, lawyers from the City coming over to the Channel Islands may know a little about how the islands operate, but it is only when they have been working for those Channel Islands firms that they will have a full understanding of local legislation and practice.
“Given the strong links between the City and the islands, City lawyers will understand how Jersey and Guernsey structures are used and the benefits of them. The attraction of these City lawyers is their in-depth training and commercial knowledge that can easily be applied in the islands as our legal systems are similar in many ways to that in the UK,” Raulin says.
This explains the current trend for legal firms based on the islands to recruit in the City.
Walkers, for example, hired two experienced City lawyers in the same month. Guernsey Funds Partner Craig Cordle, who spent 14 years in the City, and Employment Senior Counsel Danielle Brouard, who spent 11 years with Baker McKenzie in London, both joined the company in May.
Jason Horobin, Head of International at recruitment consultancy Origin Legal, says: “We are seeing a growth in the London offices by Channel Islands law firms. It differs from one firm to another. Some have a big London presence, for others it’s more surface level.”
Horobin says that some of this onshore growth can be explained by firms needing people on the ground in the City who can service some of the biggest financial clients.
In a post-pandemic world, where people increasingly sit comfortably conducting even the most confidential business online, the need to have boots on the ground seems contrarian. Yet Morgan is convinced that London is central to the firm’s global business operations.
“The London office for Channel Islands operations has become key. The number of lawyers lawyering in the London office is greater in number in relation to Jersey and Guernsey practices than it is in the other parts of the group covering the British Virgin Islands and the Caymans,” he says.
“The reason for this is that the City is the dominant jurisdiction, certainly in Europe, and arguably globally, for many of the large transactions. A lot of the movement of capital around the world flows through London.”
Going the extra mile
Morgan says that offshore firms in the City need to go beyond having a small office in London if they are to build close relationships with the City law firms that refer on the most lucrative Guernsey and Jersey work.
“We need to be close to them – and I don’t mean just having a ‘rep’ office, but genuinely sharing the commute and being around the corner for a quick catch-up,” Morgan says. “As things have opened up [post-Covid-19], face-to-face meetings have become such an important part of our offering.”
But the desire to have a City presence does not come cheap. In 2021, prime office space cost up to £82.50/sq ft, making it the second most expensive area of the country after London’s West End.
Morgan concedes that Carey Olsen invested in large City offices just before the pandemic hit, and these then largely stood empty for two years.
However, he adds that given the burgeoning business onshore, the offices are now almost “too small”.
For firms looking to avoid the costs, there is the option to call on flexible working, which – again post-pandemic – is commonplace even among the City’s workaholic culture.
Christopher Jones, a Partner in Ogier’s Guernsey office, says: “There is an array of office space options, particularly as a result of the pandemic, which enables us to incrementally flex up and down so we are not paying for empty space.”
However, he adds, a City office “is an investment as much as a cost” and the firm encourages office working.
“There’s an intangible cost to isolation as well, so having a hub where our people can meet is a useful tool which can, in turn, increase productivity, idea sharing and so on, as well as making us one firm globally.
“One spin-off benefit is being able to have those on the ground in the UK undertake more business development meetings and attend events or meet clients at short notice,” says Jones.
However, while developing a London profile is important, Fraser Hern, Head of Walkers’ Channel Islands business, believes that this is not enough on its own to meet client expectations.
He argues that the business model needs to change from appointing lawyers with specific regional legal knowledge to selecting those with expertise across all offshore jurisdictions.
“We have no dividing lines between the different jurisdictions, even though we sit in Jersey,” he says. “It is much more about putting a jurisdiction-agnostic solution in front of clients.”
Beyond regional
Fraser continues: “If you have a fund manager client in London who says they want to put £1bn worth of capital to play in the real estate sector, they want a firm that is going to suggest four options rather than [one that puts] them in front of four or five different lawyers.
“That’s the difference between the old school model and what needs to happen going forward.”
Horobin agrees that there is a trend towards employing lawyers with knowledge of multiple offshore legal frameworks, and notes that those individuals are often based in London.
“When offshore lawyers want to return to London, law firms face a decision: lose them and all their experience or let them work onshore. Do you have them sitting in the same square mile as your client base and being able to offer London advice on the Channel Islands, Cayman and BVI?
“You’ll often find that London lawyers’ knowledge crosses the different qualifying jurisdictions, so they can advise clients more comprehensively.”
With the demand for lawyers so high, Channel Islands law firms need to stay flexible – and have deep pockets – if they are to find the right talent.
There is also the opportunity to train those without the requisite islands knowledge, which Ogier’s Amy says helps ensure recruits are a cultural fit.
“Ultimately, it is more important to recruit lawyers who will fit within the team and adopt the same friendly and collaborative approach, and who have the aptitude to learn quickly, rather than looking for islanders or those with Channel Islands experience,” he says.