By Daniela Aroche

As lawyers rather than firms might once again be gaining the upper hand in the job market as the economy begins to make a come-back post-GFC, cost-cutting measures taken by firms earlier this year might come back to haunt them. 
 
According to a recent report by PricewaterhouseCoopers (Managing tomorrow's people: how the downturn will change the future of work),  the bonds of trust between some employers and employees have been eroded by pay and promotion freezes, changes to pension schemes, cuts in recruitment and diminished training budgets.

As a result, those companies who have made a conscious effort to do more with less and engage and develop their employees during the downturn are emerging as leaders in the talent stakes - and employers who are keen to attract and retain top talent have been warned that they will have to make more of an effort to invest in their talent pipeline and enhance employee engagement strategies.

"The winners and losers in the war for talent are starting to reveal themselves as the impact of long-term people decisions taken during the downturn begins to be felt," said PricewaterhouseCoopers partner Jon Williams.

"Businesses that have continued to focus on investment and employee engagement, while staving off the global financial crisis, are emerging as clear leaders. Likewise, businesses that continued to offer their employees new opportunities and invested in their people pipeline are now at a competitive advantage," he added. "The success or failure of people strategies will have a decisive impact on which businesses become the big brands and top employers of the next decade."

However, for law firms specifically - although the treatment of employees during the downturn certainly has an impact on the ability to attract and retain top talent - the longevity of that impact is in question.

"In terms of branding, how law firms have treated people is relevant now. We haven't seen a massive variation in terms of the handling of things in the market - law firms either retrench people or they give some flexibility. But I think those who have allowed flexibility and shorter working hours and done something other than just making people redundant, will most definitely help themselves stand out," said Jacqueline Keddie, managing consultant, at Law Alliance.

"However, I also think that lawyers are very conscious that this is an event that's happened in their lifetime that is an absolute anomaly, so I wonder how long the memory of that treatment will be in the minds of the lawyers that we deal with."

In fact, according to Keddie, success may have more to do with the internal environment of a firm and individual managers than the broader treatment of employees during the worst of the GFC.

"[The treatment of employees during the GFC] is only part of the story. The consistent theme from lawyers - particularly in the markets of Singapore and Hong Kong where everyone knows everyone - is that although the question of whether the firm provided flexible working hours rather than sacking people will be relevant, if the partner that they are going to be working for is a particularly unpleasant individual, attracting talent to work with that partner is not going to be any easier despite what you've done in the GFC to look after your employees."

"There are absolutely some top firms in Asia that we struggle to get lawyers to consider because of the partner and the reputation."

Law firm redundancies in numbers

Note: this table contains information available to ALB correct as of May 2009.

Other firms may have taken similar measures that are not presented here.