Italy focus - the Italian newly qualified market
Last summer we reported that the Italian legal market had started to show the signs of recovery and this has certainly continued through the second quarter of 2016. In this article our consultant Francesca Biocca looks at the newly qualified lawyer market and where their opportunities lie.
According to the data of 53 independent studies, earnings in Italy increased by 8.9% in 2015. With this positivity we have seen an increase in the employment of trainee and newly qualified lawyers. Figures suggest an increase of (on average) 24%. This suggests a return to the better times where law firms invest in their future and increase their hiring of the next generation of lawyers.
Over recent years we have seen a rise in the number of firms coming to us for help in finding legal talent at this more junior level. Previously it was common for firms to do this recruitment themselves by advertising on their own website or working with universities. The reason for this shift is that specific technical characteristics are required, even at this level, and as a search consultancy we are able to select and identify extremely specific profiles for consideration by the law firms.
Currently in Italy we are seeing a demand for recent graduates, trainee lawyers and new law graduates (NQ) as well as those with 2-3 years’ legal experience. What are the characteristics required by the law firms for lawyers at this level? On the one hand they are looking for the skills gained at college and English language skills. The majority of law firms (50%) look for candidates who have achieved high results, with a final mark between 108 and 110. But firms are also looking for the "soft skills" which includes flexibility, motivation and malleability of candidates. However, in addition to English language skills, for junior lawyers a few months of experience at the NQ and Junior Associate level is crucial. A Master’s degree, or a PhD and a secondment are considered a bonus, but concrete experience is always invaluable.
What practice areas are in demand?
Essentially at the junior end of the market we are seeing a similar trend to that higher up the career ladder. 2015 saw an increase in the volume of M&A transactions; transaction exceeded $5 billion which was a 9% increase to the record breaking results of 2007. It is therefore no surprise that we are seeing a big demand for lawyers at all levels with Corporate M&A experience. Our research suggests that current market share of demand is estimated at:
• Corporate M&A: 33%
• Banking & Finance: 14%
• Capital Markets 13.5%
• Labour: 7%
• Litigation: 7%
• IP/TMT: 5.8%
• Restructuring: 4%
• Energy: 3.5%
• Administrative: 3.4%
• Real Estate: 2.8%
There is little difference these days between international and domestic Italian law firm salaries. Despite popular belief, salaries are very similar across the more junior PQE levels regardless of the type of law firm. We therefore see boutique Italian firms as well as the large domestic practices pay associates a very similar rate to associates at the same level within a first or second tier international law firm.
To give an idea of salaries, new graduates can earn from 12,000 Euros to 30,000 Euros, while the salaries of trainees and newly qualified lawyers range between 30,000 and 45,000 Euros. By the time a lawyer is 3 years qualified they can expect to earn between 60,000-70,000 Euros. Most firms also pay bonuses on top of this. They are generally calculated in terms of monthly payments or reported hours. Some firms also offer additional benefits such as blackberries and laptop computers.
The goal generally for law firms is to retain new talent and they look to keep their lawyers after they complete their training. Cleary Gottlieb Steen & Hamilton is one of the strongest for this. By way of example, 70% of the trainees and associates who started their careers in the Italian office when it opened in 1990 are still with the firm.
In addition to the above, many law firms are committed to helping their lawyers broaden their careers and experience. Many firms offer the opportunity of a secondment to their trainees and junior lawyers and may see the undertaking of an LLM abroad as a really positive move for their lawyers. (Although the majority of firms would not cover the cost of such a course. Even when this does happen, it is on a case by case basis and is not intended to be the policy of the firm.)
All of these points suggest that now is a strong time for new law graduates, trainees and junior associates. Law firms are hiring and investing in talent with many wanting to hold onto them in the longer term. If you are a recent law graduate or a trainee lawyer and you would like more information on the current recruitment market please contact Francesca Biocca.