Founded in 1988, Laurence Simons Search has over 30 years’ experience, with an international footprint like no other legal search firm. As part of our expansion, our German team moved into new offices last November, pre-empting a year different to any we have experienced due to COVID 19.
Laurence Simons Search (LSS): Good morning both. We all agree that COVID-19 has been dominating our lives recently. How are you finding the current situation in Germany with a second but lighter lock-down?
Nicolai von Steinaecker (NVS): In my opinion, the most important thing is that the government tries to keep the system running as far as possible – that schools and day care remain open as well as offices and plants so production can continue and the gross national product does not drop significantly like in the first, much more severe lockdown.
Sven Laacks (SL): This further lockdown will be completely different than in the spring of this year. Many of our private practice clients continue their business as usual, whether in the office or in the home office. Many have only partially returned to the office so far. As Nicolai said, it is much more important to keep the situation under control.
LSS: You both speak to businesses and clients every day; how is the mood you are sensing from business leaders?
NVS: Well, I can comment in relation to the in-house side of things, and this depends very much on sector and size of the respective company. While some “old economy” clients in the manufacturing sector are suffering more – also because their business idea or product is not innovative enough and is now challenged even harder – or a client in the Aviation industry is fighting to survive in the true sense of the word, we are seeing Life Science booming stronger than ever. Not so much due to COVID-19 but due to Rare Diseases. As we are looking at a snapshot of the market right now, it will be very interesting to see how the situation will be at the end of Q1, beginning of Q2 2021 – when all these billions of state aid programs will start to run out.
SL: The mood in private practices is mostly good. Of course, the first lockdown left its mark, and many law firms recorded a significant drop in revenue in April and May. But this was an opportunity for medium-sized law firms, which often had a significant higher demand. Since the end of the summer, the transaction books have been filling up again at most firms. Mostly I perceive a good mood, but where there is light, there is also shadow.
LSS: Has there been any changes in the hiring market in Germany due to COVID-19?
NVS: As mentioned, some sectors are definitely quieter than others and there is a general tendency to control costs. But as we normally recruit either management positions or key specialist roles, many of our customers still want to rely on our expertise. What definitely changed is the first approach – at least the 1-2 interview rounds are nowadays held on the phone or via Teams/Zoom whereas before people met in person. Though we have successfully executed searches mandates without people having seen each other at all.
Sometimes hiring managers need to be creative. Often you are not allowed to show people around the workplace as it is closed, so they meet off-site, sometimes with other team members as it is still a people business.
SL: As specialized consultants, we naturally observe the personnel market within our industry very closely, including the scope of changes. Looking at the world of law firms, we can quantify this very well. If I look at the period from the beginning of the lockdown in March to the end of summer and compare it with the same period in the previous year, we see a decrease in personnel changes - i.e. lawyers who left a law firm and switch to the in-house side or also switched to a competitor - by about 70-75%.
I see this, however, as a very normal change, caused by some vacancies being put on hold, and some candidates deciding not to initiate a career change.
What we have not seen, in contrast to the financial crisis, is a reduction in the number of lawyers at law firms.
LSS: Have you made any changes to the way you approach a legal search during Covid?
NVS: Yes and no – fortunately before the second lock-down, I could still meet clients in person but as many companies are being more cautious now, reducing the personal contact of their management to a necessary minimum, assignments and other topics are discussed over the phone or online rather than face-2-face. On the candidate side, I have seen a further flexibility. Due to most of the people being in their home-office, candidates are more flexible and even have the time to meet e.g. for a coffee at 15:00 rather than 8:30 or 19:00.
SL: I can only agree with Nicolai. Normally we are used to interviewing candidates in person, for this I am usually on the go a lot and drive back and forth between the German metropolises. That is simply not possible this year.
LSS: It has been an exciting, though different, year for you both at LSS. What has been your highlight so far?
NVS: Aside from the fact that Attila the Eagle, the mascot of my Football Club Eintracht Frankfurt, joined us upon our opening party last year, I would say a placement I made recently with a client I know well though he had own candidates running. He asked if I could suggest a strong benchmark for him he would be glad to consider the recommendation and she secured the role.
LSS: What has been your most challenging search, and why?
NVS: I probably would name four searches in Eastern Europe, successfully placing three of them, the fourth is still running. It is a very local and limited market and with the latter, the client changed the focus at the very last minute, so we had to restart the search. But our strength is sourcing, engaging, and retaining candidates, so we are pleased to support.
LSS: If you had to give a few tips to your clients now, what would they be? What actions can business take right now?
NVS: Well, companies that may not have a strong brand or who do have a strong brand but pay under average can use the momentum as they will have a better chance to recruit.
SL: I think most of the law firms reacted in the correct way. We know that many international law firms - just like many consulting firms - have a high expense ratio. A drop in turnover of 20% quickly means that the profit drops considerably. Reactions such as salary cuts or similar were a suitable tool of creating a financial buffer, and are in contrast to the financial crisis when many law firms made significant staff numbers redundant - this quickly turned out to be a mistake when the situation improved again.
I did have a conversation with Markus Hauptmann from Adient at the beginning of the Covid crisis on exactly this topic, that can be read here.
LSS: Thankyou both, for sharing your thoughts and insights.
Please get in touch with our German Directors if you are growing, developing, or restructuring your teams.
Nicolai von Steinaecker; Nicolai.firstname.lastname@example.org
Sven Laacks; Sven.email@example.com