Market overview

Among the legal practice areas of greatest interest on the Warsaw market, real estate continues to flourish, with significant levels of construction taking place across Poland. Although this space is heavily dominated by a select clutch of major international law firms, others are trying to muscle in on this area; although some suggest that the real estate boom may have already peaked. M&A also enjoyed a strong showing over the past year for many of the firms surveyed. Meanwhile, the government’s decision to move away from renewable energy and back towards coal has proved a major setback for law firms with significant energy practices. Participants note that Brexit has yet to have any major effects on the local legal services market, although anecdotally an increasing number of companies (and law firms) seem to be moving office operations back to Poland; if the trend continues, this could prove a major boost for the domestic economy.

The tectonics of the Warsaw legal services market continue the shift that began in the wake of the global financial crisis. Traditional top-tier UK and US firms have typically downsized and lost ground to slightly cheaper mid-market international outfits, while lateral movement of entire practice groups remains fairly commonplace – as it has for the past five years or so. 

Compensation and human resources

Associate compensation trends

Despite widespread market perception that junior associate compensation levels in Warsaw have stagnated, the survey results for 2017 tell a different story, with like-for-like junior associate compensation levels having increased among both international and domestic law firms. Meanwhile, average like-for-like compensation levels among senior associates tended to stagnate among international firms and decrease among domestic firms surveyed. 

International law firms

  • Average overall net percentage change in like-for-like associate compensation levels: +4%

Domestic law firms

  • Average overall net percentage change in like-for-like associate compensation levels: 0%

Among large international and domestic law firms, it remains fairly standard for individual lawyers to advance annually up a level in seniority on established compensation grids. Individual associates at such firms can expect to see their base compensation rise by an average of 17% a year during the first 11 years of fully qualified practice, providing they fulfil expected performance targets each year.

Headcount growth trends

Growth in fee-earner headcount has proved increasingly common, with 70% of the firms surveyed having boosted lawyer numbers during the past year by an average of 10%. In contrast, only 30% of law firms surveyed increased support staff numbers, with a net median change of -4% in support staff headcount growth across the total sample. 

Total staff headcount

  • Percentage of firms that increased total staff headcount during the past year: 50%
  • Median percentage headcount growth (among firms that grew): 8%
  • Mean net percentage headcount change (among all firms): +4%
  • Median net percentage headcount change (among all firms): 0%

Fee-earner headcount

  • Percentage of firms that increased fee-earner headcount during the past year: 70%
  • Median percentage headcount growth (among firms that grew): 10%
  • Mean net percentage headcount change (among all firms): +9%
  • Median net percentage headcount change (among all firms): +6%

Support staff headcount

  • Percentage of firms that increased support staff headcount during the past year: 30%
  • Median percentage headcount growth (among firms that grew): 12%
  • Mean net percentage headcount change (among all firms): -2%
  • Median net percentage headcount change (among all firms): -4%

Billing

Among large international and domestic law firms, it remains fairly standard for individual lawyers to advance annually up a level in seniority on established standard billing rate grids. Individual associates at such firms can expect to see their standard billing rate rise by an average of 7% a year during the first 11 years of fully qualified practice.  Comparing the 2017 survey results with those of 2016 yielded the following results:

International law firms

  • Average overall net percentage change in like-for-like associate standard hourly billing rates:  -6%
  • Average rate collected last financial year: €178
  • Average realisation rate last financial year (collected rates/standard rates): 78%

Domestic law firms

  • Average overall net percentage change in like-for-like associate standard hourly billing rates:  +2%
  • Average rate collected last financial year: €133
  • Average realisation rate last financial year (collected rates/standard rates): 88%

The above article contains extracts from the Warsaw 2017 Legal Market Intelligence reportThe full version of this report contains further data, including detailed compensation, benefit and billing rate benchmarking tables for all levels of fee-earners and business support staff.  For further details and pricing contact Gwilym Davies at gdavies@GlobeBMG.com or on +44 (0) 20 7940 6858.