Well, unlike in banks you don't just say 'I want to be an employment lawyer" and join the employment practice, you have to do your seats (4x6 months stints in different depts) as a trainee first before you qualify, after which you specialise. TC's are only for those 2 years: you (nor the firm) have no guarantee that you will remain with the firm on qualification and many people, in fact, do leave.
Therefore, if your PhD is on a very specialised area of law, it makes no difference as firstly what you have to do as a trainee is regulated by the law society and you are unlikely to have the opportunities to employ that knowledge, secondly, a TC is about being trained and you are there to learn and having a PhD doesn't add anything in that respect, and thirdly, you may leave the firm after your TC so they have no guarantee that your specialized knowledge will be used to their benefit, and I suppose the law is very dynamic and if you did your PhD about something rather specific it could be obsolete anyway by the time your TC is finished.
That's from the top of my head, anyway. Other people may disagree or have better reasons. Oh, and all this is about having a "PhD in law".