Property boom stretching legal teams

Property boom stretching legal teams

Law firms are struggling to keep up with the booming commercial property market, with signs of skill shortages emerging, a recruitment specialist says.

Mark Simpson, a partner at Convergence Partners, says increased activity in the commercial property sector has led to mid-level commercial property, corporate commercial and banking and finance lawyers being in short supply.

Although the trend is a relatively recent one, he says it has its origins in the post-GFC property slump, when new builds and transactions slowed to a crawl.

“The shortage originated five years ago when there was no demand and up-and-coming lawyers were moved to areas such as litigation,” Simpson says.

“Fewer young lawyers started in property/banking/corporate teams in the large and mid-sized firms in the height of the GFC. There are far fewer at that mid-level to go around now that work levels have really started to increase, particularly in commercial property in Auckland.”

Simpson says the shortage is concentrated in the $70,000-$110,000 salary range.

Commercial property lawyers are involved in large scale property development work, including getting plans drawn up and put through council to both subdivide the land and put up whatever buildings are required.

They are also involved with commercial leasing, acting for either the landlord or tenant, and the sale and acquisition of commercial property.

Although the major law firms have extensive alumni networks operating overseas, Simpson says it will be hard to fill these roles with expat Kiwis, as they are often too senior for the roles once they come back.

“They come back usually with seven to 12 years’ total experience whereas the gaps are in the three-to-six-year band,” he says.

“Not only are their salary expectations beyond what the role is offering, but also they expect a higher level of work more similar to what the firms’ existing Senior Associates and Partners are doing.”

Law firms will have to get more creative in their recruitment approach to find the right candidates in areas with skill shortages, Simpson says.

“You’ll see firms having to widen the net – looking at people from smaller firms, more junior or more senior people, lawyers from offshore jurisdictions and being forced to be open to part-time/flexible hours,” he says.

“Commercial law firms tend to be quite cyclical. They do really well when things are humming along, but they are among the first to feel the pinch when the economy slows as transactions stop.”

-ENDS-

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