The head of UK listed law firm Gateley Plc has said he expects “pay inflation” in the legal sector to slow over the coming year.
Speaking to City A.M. Gateley chief executive Rod Waldie said “wage inflation has been the single biggest issue we’ve had to confront” as he noted the law firm’s payroll costs have increased 10.8 per cent over the past year.
“We have dealt with that by increasing pay, in both financial years more than we otherwise would have done,” Waldie said. “We’ve reacted to the market, and we’ve readdressed our pay to align with market conditions.”
However, the law firm chief executive said he expects the pressure to increase pay packets will subside over the coming year, as the economy heads for a downturn.
The comments come as a ‘battle for talent’ amongst professional services firms has caused lawyers, accountants, and consultants pay packets to surge over the previous two years.
The talent war has seen salaries for newly qualified (NQ) lawyers surge to heights of £179,000 a year in Akin Gump, London’s highest paying firm.
Gateley became the first law firm to float on UK markets in 2015. There are currently only six UK listed law firms.
Waldie noted the legal sector has experienced stronger wage inflation than any other sector in the professional services industry, as he argued the firm’s non-legal business has sheltered it from some of the wage inflation experienced by other law firms.
He argued the firm’s efforts to diversify have also hedged the business to ensure it is resilient in any economic downturn.
The comments come after the firm saw its revenues increase 13 per cent year on year, to £137.2m for the financial year 2022. The increase saw Gateley’s pre-tax profits jump 10.4 per cent to £18m.
Waldie explained that Gately has invested in segments of its business that will continue despite economic conditions, as he noted the firm has bolstered its capabilities around services related to cladding regulations following the Grenfell Tower disaster.
He noted the firm has also bolstered its offerings around the rollout of 5G infrastructure. “We’re investing in areas that we think will be resilient,” Waldie said.
The law firm chief said Gateley will continue to diversify its business through acquisitions whilst also pursuing organic growth.