MOP says it is prepared to pay newly-qualifieds in high-growth areas such as securitisation and structured finance up to E62,000 (£42,000), while those qualifying in less exotic practice areas like property and insurance would have to settle for a flat rate salary of a mere E54,000 (£36,000).
Not only did the move shine a spotlight on the increasingly competitive nature of the Irish legal market, it was also an acknowledgement of the difficulty firms are having in attracting and retaining lawyers with niche skills currently in high demand by clients.
International appeal
The move also illustrates the growing split between the domestic commercial work and the kind of finance-driven specialist service that Irish firms are increasingly offering to an international client base drawn by the country’s low corporate taxes.
MOP tax partner Turlough Galvin says the move was driven by a realisation that the firm had to dig deeper financially if it was to attract and retain lawyers with the types of finance expertise currently in demand from clients.
“In certain areas — and we acknowledge this will change over time as the economy changes — we are trying to match pay scales to our requirements. It is very much driven by the shifting economy,” he says.
The firm’s aggressive move demonstrates the predicament facing
Even a cursory glance at the figures demonstrates that the Irish business market is in a healthy condition indeed. With a corporation tax rate of just 12.5% on trading profits, compared with the
More than 1,300 European companies have chosen to base their European headquarters in the country while its foreign direct investment programme has attracted multinationals such as Google, Cisco and PepsiCo.
Light touch
But
“If you talk to any of the firms, they are making hay on the capital markets side,” says LK Shields finance partner Joseph Gavin. “Shedloads of business is being done. The investment managers and asset managers perceive that
He adds: “It has gone beyond inward investment. That would have been the mainstay 10-15 years ago. We are much more closely integrated into the global marketplace. All the big names are already here and doing work from here.”
McCann FitzGerald banking and financial services partner John Cronin gives much credit to the Irish Stock Exchange for putting extensive resources into developing its debt listing capability. “
Arthur Cox managing partner Padraig O’Riordain agrees: “The capital markets practices of a number of firms in
Further afield
And while the domestic market is booming, Irish firms are to be found playing prominent roles on large-scale multi-jurisdictional transactions.
George Brady, a corporate and commercial partner at MOP, comments: “Traditionally we would have been at the end of a multinational, multi-jurisdictional transaction, but now our clients are looking for us to get involved with multinational deals.”
Recent deal highlights for the firm include advising HM Rivergroup on the acquisition of Houghton Mifflin and Riverdeep for a combined value of $4.5bn (£2.3bn) — the largest ever acquisition by an Irish company —and advising Australian investment fund Babcock & Brown Capital on the E2.36bn (£1.6bn) acquisition of Irish telecoms company Eircom.
A&L banking and financial services partner Adrian Burke comments: “We are increasingly seeing Irish companies, as they grow, instructing Irish counsel, as they are more familiar with us.”
Meanwhile, beneath the top tier of large
“It is still early days, but with the name change we are getting access and work from clients that we would not have got before,” says O’Donnell Sweeney Eversheds managing partner Francis Hackett, citing wins for Heinz and Boeing, as well as capitalising on Eversheds’ appointment as exclusive adviser to Tyco.
Staffing issues
The flow of more complex and international work is compelling
“It is now taken for granted that Irish firms have to offer the specialisms that London firms offer,” says A&L Goodbody head of intellectual property (IP) and technology, John Whelan, who spent five years at Freshfields Bruckhaus Deringer’s London headquarters before returning to set up the firm’s IP/IT practice about two years ago.
A&L Goodbody addressed this need to offer specialisms by imitating the Freshfields model that Whelan encountered in
While the boom in work is a source of optimism, if there is one issue keeping
And while MOP is convinced that its tiered salary structure will go some way in addressing its need for specialists, it is not a strategy that looks set to be emulated by other firms in the Irish legal market any time soon.
“It is not a road we would go down,” says a partner at a rival firm. “We are merit-based and reward people very well, but we are not going to take the route of saying ‘if you are a successful litigation associate you are paid less than somebody in finance’.”
Another partner says that his firm focuses on rewarding people according to individual performance rather than the practice area they work in — lucrative or otherwise.
But MOP’s Galvin insists the firm has considered the potential downside of remunerating some of its lawyers more lavishly than others and still concluded the scheme worth implementing.
“We discussed the implications for the business in great detail, and the view was that it would not affect the rest of the business,” he says. “We are trying to ensure we are at the top of the market in all of our sectors. We try to make sure all people are being paid at the top rate for their year of qualification.”
He adds: “Other firms now know that if they are looking for people in one area, we are possibly going to be offering more. It all comes down to market forces in the end, so if they want somebody they are going to have to incentivise.”
With rival firms unwilling to risk tinkering with their salary structures just yet, a number of different strategies are being adopted to deal with the current drought of qualified finance specialists.
Some firms are beefing up their trainee intake. A&L Goodbody, which currently has about 60 trainees, is looking
at taking in higher numbers while William Fry has increased its number of trainees from 20 to around 30.
Firms are also encouraging generalists within their ranks to cultivate specialist skills. For example, MOP is training up lawyers in the growth area of regulatory and risk management. “There are not many risk and compliance lawyers around, so it is a question of training them up ourselves,” says Joe Beashel, who heads up the firm’s regulatory and risk management practice.
Capital gains
Many of the top firms are also keeping a constant eye on
Arthur Cox has proved particularly adept in this regard. During the past few years the firm has hired Glenn Butt from Allen & Overy’s capital markets practice, ex-Linklaters deputy head of tax Conor Hurley, as well as a capital markets specialist from Sidley Austin.
MOP also has several partners with international experience in its ranks. CVs include stints at, among others, Baker & McKenzie, Slaughter and May and Macfarlanes.
Whelan says the transition from the
“We can offer a firm that is a lot more London-esque, does very good deals — a factor of the economy doing so well — and Irish organisations doing deals across Europe, which may not have been the case 10-15 years ago.”
Neither is Whelan alone at the firm in having
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