Why the City law training contract recovery may take place up north

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By Alex Aldridge on

Last month, while killing some time after a meeting in Leeds, I went for a walk around the area of the city centre near the river that has been populated with hundreds of new build flats. Many of them are still empty after they failed to sell following the 2008 crash. Prices are about a third of what you’d pay for similar accommodation in London. Slap bang in the middle of all this is a brand new office that is soon to be opened by accountancy giant KPMG, creating 200 new jobs. And where big accountancy firms go, big law firms tend to follow…

Indeed, to an extent this trend is already underway, with firms including Allen & Overy, Ashurst and Herbert Smith all establishing regional support offices during the recession where work is done at a lower cost, largely by paralegals. Other firms, such as Nabarro and DLA Piper, have long operated like this, keeping costs down by using regional lawyers on salaries that can be half that of the amounts paid to similarly-qualified London-based lawyers. A list of firms which operate these models is here.

What dawned on me, as I wandered around Leeds, was how significant regional offices could be as the economy recovers. Certainly, they are likely to represent an attractive option when firms begin to gradually increase their trainee numbers again.

When you’ve got a regional office and a London office, and you need more junior grunt work, why would you expand in the location where you have to pay higher salaries? It’s not as if law firms have money to burn, after all, with several high profile outfits in a shaky financial state and rumoured to be scouring for potential merger candidates. Even comfortably-off magic circle member Clifford Chance saw a 9% drop in profits last year.

Speak to graduate recruiters at the City firms with regional presences and, privately, several will tell you that they’ve been thinking along these lines for a while. For 2014-15, the north could be the buzzword for City law graduate recruitment.