Are we paying enough money? It's a familiar question. One which seems to be perplexing even the most successful law firms. The legal industry may be at its most profitable but lawyers are at their most scarce.

Where are all the good lawyers? Law firms are facing unprecedented difficulties in recruiting high calibre staff. Many are reassessing their human capital strategies and introducing radical career development programmes as well as taking a closer look at their profile in the legal market.

Do we have an image problem? Even the most successful law firms are in a frenzy as partners discreetly enquire about the performance of their HR professionals who in turn worry about the behaviour of their partners at interview!

Does TMP QD Legal favour certain clients? This newsletter examines the current state of the legal market and attempts to provide some reassurance to HR professionals and partners alike that there is unlikely to be anything drastically wrong with the law firm. The key is to recognise and address those factors which can affect and improve the ability to recruit.

There are far more career options for lawyers now.

There is currently a shortage of mid-ranking to senior lawyers in the market. A few years ago the legal market looked very different. Lawyers completed their articles and set themselves the ambitious goal of joining a law firm for life. For life! The Americans did most of their business in America. The accountants practised accounting, and as for the dotcoms well they simply didn't exist.

But times have changed. Demand for lawyers, and in particular transactional lawyers, heavily exceeds supply. As a result of the continued buoyant economic climate the 1999/2000 financial year saw most of the UK's premier law firms achieve record profits. In particular most law firms seem to have benefited from an exceptionally strong year for cross-border M&A work. In addition, the growing and converging new technology markets as well as the upturn in the Asian economy have boosted many firms.

Lawyers who traditionally had the option of choosing between private practice or in-house can now select a broader range of options, such as joining a multidisciplinary partnership, an investment bank or a dot.com. There is also less of a stigma for lawyers who leave the profession and the growing statistics support this.

What law firms need to do is adapt to this new climate and recognise those factors which they are in control of, such as the ability to rebrand, more effectively manage the careers of their lawyers, and other similar initiatives. In today's market lawyers seem to accept more readily that they will typically work long hours but the law firms who are winning the recruitment race are those who are best managing and looking after their lawyers. For some time there is likely to be a larger number of firms chasing fewer lawyers but if law firms can at least implement some initiatives to ensure that staff retention rates are kept to a maximum then they will at least be able to improve the current dilemma. At TMP QD Legal we are now working closely with a number of law firms to retain and motivate their assistants.

A number of firms are panicking over their recruitment strategy and wrongly assuming that all the good lawyers are going to competitor firms. Set out below are some of the common myths which are currently surfacing in the legal market.

We don't pay high enough salaries. That's why the US law firms are recruiting all the good assistants. No they are not!

Of course salaries are a crucial issue. There has been a larger than ever percentage increase in salaries this year. The Silicon Valley firms set the ball in motion earlier in the year when they hiked up salaries and it has not stopped rolling since. The Magic Circle firms responded aggressively while the response so far by the medium sized firms has been varied. Some have set out to directly compete with the global firms while others have made it clear that in the long term, paying these salaries is simply unsustainable for them.

Salaries are of course a high motivator. A corporate assistant working round the clock in a UK law firm may decide to work round the clock in a US law firm for twice the money! But it is not the only motivator. If it were, then the US law firms would be meeting all their ambitious recruitment targets.

Assistants, particularly at the junior level end, are also concerned with the quality of training, the variety of work and the way they are going to be treated. A number of law firms have started to recognise the so-called 'psychological contract' between the employer and the employee. Broadly speaking, this goes along the lines that the employee will give his/her very best commitment to the employer who in turn will give them an additional skill set that they would not be able to gain at another law firm. This additional skill set may even take them out of the law, but the commitment by the employer is to develop the individual professionally.

Overall paying a higher salary will increase the chances of recruiting (as will other financial incentives such as offering a sign-on bonus or paying discretionary bonuses) but it is not the only solution.

These are all human capital issues that TMP QD Legal is able to advise on.

It is possible but in reality few firms have entrenched perception problems and, in any event, those that do can remedy this. Most law firms in fact suffer from failing to maintain a strong enough profile in the legal press. Law firms have traditionally focused almost exclusively on raising their profile amongst their clients. They have however neglected to mirror this exercise within the legal market. Winning the work is no longer the problem; finding the lawyers to do the work is! The law firms who are having the most success in recruiting are those who have committed themselves to sustained branding campaigns that in the long-term lead to more recruits. In addition, by continuing to ensure that the firm is regularly covered in the editorial of the legal press these law firms are able to create a distinct and recognisable brand.

TMP QD Legal is able to conduct informal research to identify the perception of a law firm and discuss ways in which the employer brand can be enhanced.

Frustrated law firms worry that TMP QD Legal is not interested in them and that good quality corporate, finance and capital markets lawyers are being placed enthusiastically either in the Magic Circle firms or with competitors.

TMP QD Legal commit to working with all clients and have dedicated teams of consultants for every client law firm. That team is available to address human capital requirements and highlight developments in the legal market.

There is a war going on for the most talented lawyers. Cynics argue that the war is over. They believe the candidate has won! Whether the war is over or not is debatable but what is certain is that for the immediate future, the candidate remains very much master of his/her own destiny.

TMP QD Legal are conscious of the frustrations in the current recruitment market and want to do everything possible to help clients grow and meet their ambitious plans. Not just to recruit top quality staff, but to assist in retaining those lawyers. TMP QD Legal's goal is to work in partnership with clients to find resource solutions for their complete human capital needs.