The German legal market has developed more and more into an entirely candidate driven market over the last years. We are currently experiencing a huge lack of talent which has made competition for the best candidates tougher than ever. Law firms and companies both have problems finding and securing good talent. There are less and less graduates coming into the market and the lawyers who are in a good role at the moment (which is the norm) are very much looked after and will not move unless it is an outstanding opportunity that matches all expectations in regards to salary, location, personal development opportunities, etc. Due to this situation we have seen a real war for talent with more and more offers being rejected and candidates becoming increasingly picky. Law firms have tried to tackle the situation by raising salaries on the Associate and Senior Associate level about two years ago. As a newly qualified lawyer in Germany with top grades you will start your first role in a top law firm now on a salary of around EUR 100,000 – EUR 140,000. The top international firms were the first ones to bring salaries to that level but we are now also seeing smaller local boutiques raising salaries to a comparable level.
Candidates’ expectations are very high. They expect to earn on a similar level when moving in-house otherwise they prefer to stay in private practice, which has resulted in less in-house moves. At the same time we have seen an increased demand from companies to expand their legal teams. Because this demand cannot be matched, we have seen that recruitment processes have taken very long and some companies have open positions for a long time. We also see more and more counter offers which leads to more rejected offers. Some companies had to revisit their budget for their recruitment and had to raise the salary otherwise they simply weren’t able to gauge interest.
From a skillset side we see most demand in areas like data protection, IT but also litigation and employment. Particularly data protection is a very niche skillset with very little talent available.
We do not see this market situation changing in the foreseeable future as lawyers are more and more seen as a true business partner helping to shape business decisions with their valuable input in a very regulated and conservative market place. At the same time there will be less and less candidates available that are German qualified and can draft and negotiate in German. Although we have more and more interest from foreign qualified candidates to look for a job in Germany (due to the good economic situation) but we still haven’t seen the flexibility from companies to consider foreign qualified candidates as business is still mostly done in German language. It remains to be seen how companies and law firms will react and if there is more appetite in the future to consider bringing in talent from abroad.