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How ‘Generation Start-up’ is changing the way lawyers approach their careers

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James Williams, our Client Development Executive in London, shares his thoughts on the shift he’s seeing in how lawyers are making decisions around their careers and why he thinks the surge in start-ups is having such an impact.

There has been a flurry of headlines about the surging demand for legal services and the shortage of lawyers to meet them. One driving factor has been an increase in work for transactional practices like M&A, which rose to new records in 2021. Another is an exodus from the industry, in line with what economists are dubbing ‘The Great Resignation’.

But I believe another trend is also fuelling the fiercely competitive legal market, and it’s a structural shift that’s often overlooked. Sifting through industry reports recently, I was struck by a statistic that during the 2018/19 tax year, 672,890 start-ups were founded in the UK. That’s a remarkable number, and it dropped only slightly in 2019/2020. So, even accounting for the fact that around 50 percent of start-ups typically fail in the first five years, that means around 300,000 new businesses each year are looking to hire employees as they take their offerings to market – including the need for either internal or external legal counsel, of course at some point during their growth trajectory. You can just picture that supply vs demand curve your teacher drew on the board in school.

All this chimes with what I’m already seeing first-hand in the market. Here at Peerpoint, I’ve been having many conversations with new business founders seeking legal support or legal consultants keen to work within new businesses, so much so that I’ve dubbed it the ‘Generation Start-up’ phenomenon. But what kind of businesses are behind this trend and what’s in it for the lawyers who go down this route?

What we’re seeing are start-ups across a number of sectors seeking to build out their legal teams but especially demand from fast-growing fintech businesses. That includes smaller companies seeking sole counsel, and larger digital businesses looking to build entire legal teams.

For the legal consultants who take on these kinds of roles, there are multiple benefits. First, high-growth businesses can provide a quicker path to advancement. Becoming a general counsel (GC) can take years in a larger, more traditional business. In a start-up environment, by comparison, it’s likely that lawyers will have more of a voice in strategic decisions and more responsibility in helping to build the business right from the start.

In fact, it might be fair to float the idea that start-ups are now more attractive than well established financial institutions and private practices when it comes to attracting top talent because they can allow lawyers to work across all areas of the business, contribute to key projects and demonstrate their impact more rapidly. Also, who knows there might even be an equity stakeholder position lurking on the horizon.

Companies on the frontline of innovation can also offer employees something that’s different to the status quo, and that’s the sheer excitement of working collaboratively to build a company from scratch. In my view, this goes for legal talent across all levels of experience, with junior and senior lawyers now showing a genuine interest in joining the start-up bandwagon.

I know one of our consultants who recently worked with Monzo and shared the following:

“Working with committed and creative teams as well as being part of a digital bank that is giving people control and visibility over their money was incredibly inspiring.”

“I love the entrepreneurial build of a fast-growing company. There are no ivory towers; it is very much a meritocracy. Importantly for me, it is an inclusive and people-focused culture; everyone feels part of the build and the solution.”

Having the ability to ‘start-up hop’ can also be a real benefit if you’re a legal consultant. You can gain solid exposure in a lot of different industries quickly and develop some dynamic skills should you return to the more traditional roles of the working world.

Importantly, being part of Allen & Overy feels really key because it means we’ve got access to some of the best start-up unicorns in the market. For anyone feeling nervous about what it might be like ‘on the ground’ then there’s always the support from Peerpoint and A&O’s teams in the background.

Not all is lost for the existing hegemony though. The rise of their technology incubators is a path that many are keen to explore and of course, the draw of job security is always going to be a benefit that’s hard to deny. Without a doubt a market shift is going on but don’t underestimate the big players in the markets, there’s a good reason for their longstanding success. Who knows, you might join a start-up and before you know it the business you sought to leave could be acquiring you.

As 'Generation Start-up' continues its quest for resourcing support, I’m excited that we at Peerpoint support a top-quality pool of legal talent able to hit the ground running and help these fast-moving businesses do what it takes to accelerate their growth. Contact me to find out more about what we can do to help or to simply have a conversation on the market.
 

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You can contact James here