MOP says it is prepared to pay newly-qualifieds in high-growth areas such as securitisation and structured finance up to E62,000 (£42,000), while those qualifying in less exotic practice areas like property and insurance would have to settle for a flat rate salary of a mere E54,000 (£36,000).
Not only did the move shine a spotlight on the increasingly competitive nature of the Irish legal market, it was also an acknowledgement of the difficulty firms are having in attracting and retaining lawyers with niche skills currently in high demand by clients.
The move also illustrates the growing split between the domestic commercial work and the kind of finance-driven specialist service that Irish firms are increasingly offering to an international client base drawn by the country’s low corporate taxes.
MOP tax partner Turlough Galvin says the move was driven by a realisation that the firm had to dig deeper financially if it was to attract and retain lawyers with the types of finance expertise currently in demand from clients.
“In certain areas — and we acknowledge this will change over time as the economy changes — we are trying to match pay scales to our requirements. It is very much driven by the shifting economy,” he says.
The firm’s aggressive move demonstrates the predicament facing Dublin’s top commercial firms. To the delight of partners in corporate and finance departments across the city, work is flowing in at an unprecedentedly rapid rate; but at the same time they are struggling to find lawyers with sufficient expertise to staff the internationally-focused corporate work.
Even a cursory glance at the figures demonstrates that the Irish business market is in a healthy condition indeed. With a corporation tax rate of just 12.5% on trading profits, compared with the UK’s 28%, Ireland has drawn the attention of a raft of international companies.
More than 1,300 European companies have chosen to base their European headquarters in the country while its foreign direct investment programme has attracted multinationals such as Google, Cisco and PepsiCo.
Recent deal highlights for the firm include advising HM Rivergroup on the acquisition of Houghton Mifflin and Riverdeep for a combined value of $4.5bn (£2.3bn) — the largest ever acquisition by an Irish company —and advising Australian investment fund Babcock & Brown Capital on the E2.36bn (£1.6bn) acquisition of Irish telecoms company Eircom.
Dublin rival A&L Goodbody recently acted as lead counsel to Quinn Group, the industrial and financial services company, on a E355m (£241m) syndicated loan facility and $300m (£152m) US private placement of debt securities. The firm led both deals simultaneously across no less than 18 jurisdictions.
Meanwhile, beneath the top tier of large Dublin firms, those with smaller-scale operations have also been extending their reach. Since it formally sealed its alliance with Eversheds earlier this year, O’Donnell Sweeney (now known as O’Donnell Sweeney Eversheds) has been eager to make the most of its tie-up with the UK heavyweight, which is still highly unusual in the local market.
“It is still early days, but with the name change we are getting access and work from clients that we would not have got before,” says O’Donnell Sweeney Eversheds managing partner Francis Hackett, citing wins for Heinz and Boeing, as well as capitalising on Eversheds’ appointment as exclusive adviser to Tyco.
“It is now taken for granted that Irish firms have to offer the specialisms that London firms offer,” says A&L Goodbody head of intellectual property (IP) and technology, John Whelan, who spent five years at Freshfields Bruckhaus Deringer’s London headquarters before returning to set up the firm’s IP/IT practice about two years ago.
A&L Goodbody addressed this need to offer specialisms by imitating the Freshfields model that Whelan encountered in London, setting up 25 specialist practice groups in areas such as IP/IT, competition and insurance.
And while MOP is convinced that its tiered salary structure will go some way in addressing its need for specialists, it is not a strategy that looks set to be emulated by other firms in the Irish legal market any time soon.
Another partner says that his firm focuses on rewarding people according to individual performance rather than the practice area they work in — lucrative or otherwise.
But MOP’s Galvin insists the firm has considered the potential downside of remunerating some of its lawyers more lavishly than others and still concluded the scheme worth implementing.
With rival firms unwilling to risk tinkering with their salary structures just yet, a number of different strategies are being adopted to deal with the current drought of qualified finance specialists.
Firms are also encouraging generalists within their ranks to cultivate specialist skills. For example, MOP is training up lawyers in the growth area of regulatory and risk management. “There are not many risk and compliance lawyers around, so it is a question of training them up ourselves,” says Joe Beashel, who heads up the firm’s regulatory and risk management practice.
Many of the top firms are also keeping a constant eye on London and actively seeking to lure Irish lawyers currently working at the City’s elite firms back to their home country.
Arthur Cox has proved particularly adept in this regard. During the past few years the firm has hired Glenn Butt from Allen & Overy’s capital markets practice, ex-Linklaters deputy head of tax Conor Hurley, as well as a capital markets specialist from Sidley Austin.
MOP also has several partners with international experience in its ranks. CVs include stints at, among others, Baker & McKenzie, Slaughter and May and Macfarlanes.
Whelan says the transition from the London to the Irish market was much smoother than he expected. “When I moved back I was a little cautious as to whether it would work over here, but I found the transition unbelievably smooth,” he says.
Neither is Whelan alone at the firm in having UK magic circle experience: his colleagues at A&L Goodbody include ex-Linklaters partners Kevin Feeney and Ciaran Rogers, as well as former Clifford Chance finance partner Nollaig Murphy.
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