We knew 2020 was going to bumpy, but no-one could have foreseen the pandemic that we now face. We conducted our research for the 2020 Salary Survey in January, and it feels like it should now be tossed into the garbage, so much has changed in a matter of weeks.
Back in January, the FT and other financial publications were describing the financial and employment forecast as ‘continued macroeconomic and geopolitical uncertainty’, what with issues concerning US/China sanctions, turbulence in Hong Kong and more recently Iran, as well as Brexit. We were expecting 2020 to play out similarly to 2019 to be honest.
2019 was an assuage year for the UK legal market, largely due to the prolonged Brexit, which meant that many companies were only able to act on short-term strategies rather than make long term business plans and investments.
Brexit, quite rightly so, has been pushed aside to deal with the more immediate dangers of Covid-19. Health and safety are a priority, without a workforce, we have nothing. For what is now looking like the medium term, our workforce is lock downed in a way that has forced us all to reconsider the way in which we conduct business. Some sectors, of course, have been hit harder than others, who knows how we will shape the future of the hospitality and leisure industries moving forward? As well as retail, manufacturing, logistics and transport sectors which over recent years has been more focused than ever on the ‘customer experience’ and not just e-commerce.
Industries that should prosper are those within Telecommunication and Technology, if there ever was a need for them, now is the time. Hand in hand, lies the Space Industry, we need those satellites up above to keep us sane and operating down below! Let us also not forget pharmaceutical, medical research and medical devices. Then there is the other day to day essential sectors, such as oil & gas, energy companies, waste management etc.
So, what does this mean for the IT and Legal industries?
Well, Legal, and we are looking at this from an Industry & Commerce point of view, (it’s not often that TAP is involved in civil legal recruitment, however, now might be the time to start building our Family Law database!) We expect the continued need for legal professionals to be fully knowledgeable of data protection laws, intellectual property, software licencing, contractual payment terms, litigation and employment law, as well as banking and lending. We really can’t envisage much in the way of demand in commercial property and construction unfortunately.
In IT, the sector was already due to be heavily hit this year with the IR35 legislation, however, thankfully this has now been put on hold until April 2021. We find it difficult to comment here, however we envisage that the skillset demand will be high, depending on the industry sector, however many projects may go on hold to deal with more urgent priorities and financial ‘re-management’. Nevertheless, information security is still crucial, and we expect continued demand.
The New Year should have had an immediate boost from extra government spending, firstly on day-to-day consumption and then on investment. Analysts were predicting that capital was going to be further invested in infrastructure, ironically, it absolutely has, but not in quite the way that was anticipated.
Despite the slow growth predictions, London remains second only to New York in terms of growth opportunities in the legal sector. The capital should continue to be a hothouse for financial markets, private equity (PE) houses and hedge funds, and if that continues, they will keep the UK’s legal industry busy.
Looking to the future and Post Brexit and Covid-19
We think the fact that the Brexit transition period and Coronavirus fallout is likely to impact for at least a year is going to leave quite a lot of uncertainty for businesses throughout 2020.
Towards the end of 2020, as the UK’s future relationship with Europe starts to hopefully become less clouded, we should expect to see an increase in Brexit-related work. Brexit brings plenty of opportunities in the areas of competition and antitrust, commercial contracts, restructuring and litigation.
Prior to Covid-19, we expected that unemployment should stay below 4pc, helping consumers to keep the economy growing, however, with unemployment rates on the rise and many employees on furlong leave, we really can only look to 2021 or change the way in which the workforce operates in 2020.