21 January 2016

In his commentary «Kommersant» Maria Korovitsyna, lawyer at «Khrenov and Partners» analyzed what legal services might expect in the field of construction, maintenance, mortgage transactions, real estate transactions in the crisis.

Large Russian and international law firms have frozen projects to develop practices, and in some cases had a staff reduction. However, experts predict the recruitment of professional correction and stabilization of the situation on the labor market by the fall of this year.
Sometimes they are reduced

How does the crisis impact on employment in the legal market? Predicting is simple enough. Outsourcing consultants have traditionally been considered the business category of minor costs and such costs shall be revised down when the going gets tough. This leads to a reduction in revenues of law firms according to certain pre-crisis products and, if the firm is not doing anything, drop in profitability, which is inevitably follows a reduction of the company or its ruin.

According to the survey of PwC Legal, held among the leaders of the legal services of foreign companies, about 80% of the respondents were planning to carry out work on their own. These data confirm the observations of other analysts that the legal departments continue to control expenditure on external consultants, with a clear trend towards solutions more legal issues and transactions of the department of internal forces.
According to Jana Zoloeva, managing partner of PwC Legal, the market is a review of approaches to involvement of external consultants. This is reflected in the reduction of cases, outside consultants in general redistribution of the volume of services to major law firms in favor of the relatively small law firms to establish a regime of «closed pool» law firms involved to address certain issues.
Earlier this year, representatives of law firms noted a significant reduction in customer requests for such legal instruments as deposits, mortgages, contracts with foreign companies conducting IPO, support development projects that entail, respectively, decline in demand for legal and consulting services in the area land and property, banking and investment areas.

«Of course, we can not say that the provision of legal services in the field of construction, maintenance, mortgage transactions, real estate transactions, provide collateral completely come to naught. But we can not ignore the fact that these kinds of rendered legal services are at the greatest risk» — says Maria Korovitsyna, lawyer law firm «Hrenov and partners.»

According to our data, for most law firms lawyer decrease in the average load on client projects below 45–50% of the total duration of labor hours, employee results in a loss of profitability. It is normal for the average load on the client consultant assignments within 80–85% of the time. (Higher load leads to substantial revision, because in addition to customer orders have to spend time on administrative work and correspondence. As a result, these «feats of labor» lead to 12-14-hour working day including weekends and holidays, and rapid professional burnout.)
Without further ambitions
Professional Recruiters say that six months have seen a quantitative decrease in requests for selection of legal professionals. This is due to the fact that employers optimize their structure and to expand the state, few people are now ready.
The employer is becoming more selective, since the current market gives him the opportunity, and the level of remuneration proposed candidate is not growing.
«In previous years we have seen a natural increase of the wage fork. Now this process is stopped,« — says Maria Khandros, a leading specialist recruitment company Kelly Services CIS. Employers are openly saying that the crisis — this time bend the candidates on their expectations, continues Ms. Khandros.

The expert notes that candidates absolutely conformal, if in early 2014 candidates come to the recruiter for the interview, talked about the desire to increase revenue during the transition to a new job an average of 15%, now they want to at least maintain the level of wages, who had at last employer.

«However, against the background of Russian law firms feel a little better and are more active», — says Tatiana Grachev, manager of recruitment company Laurence Simons. As a result of changes in the external economic situation and sanctions some state corporations began to increasingly seek the services to domestic law firms. The only exceptions are cases where Russian companies have little or no expertise on just some issues. Companies from Russia seeking to make up for lack of experience including through the hiring of new employees. They are willing to engage in strengthening their expertise in order to become more competitive.
In a difficult situation may be foreign law firms lawyers, especially lawyers top positions, according to recruiters. Their salaries and bonuses are denominated in a foreign currency, US dollars or euros, and due to the fall of the ruble, they have become too costly to their companies.

At the same time, these people are ready to significantly reduce their salary expectations, explain recruiters, — up to 50%, as are aware that became hostages of the situation and understand that the salary that was in their last year in terms of rubles today they simply no one will be able to offer.

«Perhaps the lawyers of international law firms who want to change jobs, today, there are two ways: the Russian law firms, which, because of the circumstances, active in the market and are interested in strengthening their teams by lawyers in foreign law firms, and the hiring of intra legal departments «, — says Tatiana Grachev.