Hope (of City recovery, creation of more fat cats and then another crash) is beautiful, writes Alex Aldridge
On Friday, I had a drink with a friend who works at an investment fund in the City of London. For the last few months he has been warning me in solemn tones to brace myself for near-certain Armageddon. So I was surprised to find him unusually chirpy.
“The mood is really up-beat right now in the City,” he told me. “Work is like living with a bunch of manic depressives.”
Certainly, the picture appears better than last year. Although the Eurozone still looks pretty crocked, as illustrated by Greece’s latest bailout today, it seems unlikely to trigger another financial crisis now that it has been flooded with cheap loans from the European Central Bank. Meanwhile, the US economy appears to be in recovery mode. With the FTSE 100 up 15% from late November 2011, sales desk employees at investment banks have, according to the Financial Times, been issuing internal messages asking if a “mini-boom” is under way.
But does this renewed sense of hope apply to the world of law – and could it have a positive effect on law firms’ graduate recruitment strategies?
“It is too early to say,” says Ashurst graduate recruitment partner David Carter (pictured). “The current upturn is at too early a stage and is too patchy for people to interpret it as a full blown recovery. Greece, Iran-Israel and Syria all have the potential to knock events in the wider global economy off course.”
On the subject of firms’ hiring of trainees, Carter adds: “Firms will be keen to avoid taking on too many graduates and having to defer applicants. The watchword will be caution for the rest of this application year.”
Neel Sachdev (pictured), a partner at the London office of Kirkland & Ellis – which last month demonstrated its health by upping its newly qualified (NQ) solicitor salary to £97,000 – is less cautious in his optimism. “It looks very positive,” he says. “The bond market is picking up and that is generally a good sign of buy-outs. Recent data in last week pointed to positive signs but markets are very volatile at present. We are busy.”
With US firms unusually strong right now in relation to their UK counterparts – a symptom of their larger scale and traditional strength in counter-cyclical restructuring work and litigation – the likes of Kirkland & Ellis are currently a better bet for applicants than mid-market City firms like Simmons & Simmons, which last week announced that it was keeping on only two out of eight of its most recent trainee batch.
The downside of US firms in London is that they take on far fewer graduates each year than their UK counterparts (Kirkland offers six training contracts a year; Simmons offers 30-40), and work their lawyers notoriously hard. And despite the prevailing optimism, not all lawyers at the American firms in London are positive about the future. One senior figure at a top US outfit in the City summed up the way he sees the next few years in Britain as follows: “Unemployment is going up; we about to be downgraded. And there’s Greece. Over all, there more reasons to be pessimistic than optimistic over the next few years.”
Round the corner at St Paul’s – the final stop on the opinion-gauging dash around the City I did yesterday – the Occupy London protesters have their fingers crossed that the doom merchants are right, and the City continues to struggle, as they try to maintain their momentum in the face of an ongoing legal attempt to evict them.
Speaking last night at a debate at the camp, London School of Economics (LSE) human rights professor Conor Gearty urged the protesters to help create a society where “the assumptions of law move away from profit obsession, and people no longer push past you in a rush on the tube.”