Hume: Increasing differentiation between fee-share firms
Fee-share law firms are still growing “at pace”, with two recruiting more lawyers in the first half of this year than any traditional practice, according to new research.
Researchers said that while magic circle law firms saw a “significant outflow” of lawyers this year, “hinting at possible burnout or career shifts”, fee-share firms saw a “steady inflow, reflecting ongoing appeal”.
Topping the table for lawyer recruitment in the first half of this year was Setfords, recruiting 58 lawyers and Taylor Rose – which combines both types of practices – with 48, followed by the leading traditional law firm when it came to recruitment, US firm Paul Weiss with 45.
Keystone Law was fourth with 43 lawyers and DWF fifth with 40. Traditional law firms took up all the remaining places in the top 10 list of recruiters apart from the joint 10th position, secured by gunnercooke with 28 hires.
Instant Impact said an analysis of recruitment patterns showed that while the top 100 law firms experienced a “slight outflow” of lawyers, highlighting competition, magic circle firms experienced a “significant outflow, hinting at possible burnout or career shifts”.
Fee-share firms achieved a “steady inflow” of lawyers, reflecting their “ongoing appeal”, while in-house departments recorded a “net movement towards, showing strong attraction due to stability and benefits”.
Alternative legal service providers meanwhile experienced “minimal change, indicating stability”.
Researchers from Instant Impact based the Platform firms mid-year report 2024 on data from Codex Edge, whose software tool, ATLAS, tracks over 150,000 lawyers at 15,000-plus employers.
Fee-share firms hired 242 people in the six months – 115 hires from outside the top 500, while only 10 from the top 20.
Setfords, Taylor Rose, Keystone and gunnercooke remained the ‘big four’ fee-share firms in terms of headcount – with 550, 521, 508 and 456 lawyers respectively.
They were followed by three with over 100 – Spencer West (262), Excello Law (180) and Nexa Law (136). After that came McCarthy Denning with 81, Bexley Beaumont with 78 and Davitt Jones Bould with 74.
In terms of percentage growth in the first half of 2024, Mezzle, a much smaller law firm with around 30 lawyers, led the way with 14%, followed by Bexley Beaumont (13%), Setfords (11%), Spencer West (4.4%) and Keystone (4.3%).
The top 10 fee-share firms recorded “extremely high retention rates” over the first half of this year, all with over 90%, with McCarthy Denning led the way on 99%.
Researchers said the fastest growing skills in the sector were torts, consumer law and debt management.
Chris Hume, chief executive of Codex Edge, said the sector continued to “grow and evolve at pace, and as it matures we are seeing an increasing segmentation and differentiation in offering”.
The findings in the report demonstrated that the fee-share model “continues to thrive” and was “an increasingly significant part of the UK legal landscape”.
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