Following a busy review period, Ms Naiman said that the majority of pay rises for lawyers came in at 6 per cent to 10 per cent.

“We also noted in the market that a number of firms and a number of lawyers got little if no increase. And I think some of that is reflective of the ratio between what lawyers can be charged out at and what they actually cost the firm because it is a related number. I think there have been instances where the lawyers are already getting more salary than when you put those numbers into an equation, what the law firm can actually bill that particular lawyer out. I think that’s caused a bit of sort of consternation for some candidates,” she explained.

“The things that have surprised me is that there are firms out there [that] feel that perhaps they did better than others in the review process and that there should be lots of lawyers out in the market looking at opportunities. And I can’t hand on heart say that that is actually the case. The less-than-expected reviews have not caused an increase in supply in the market.

“And I think that is largely because a lot of lawyers do come to the table with a bit of a conservative nature, and I think a lot of lawyers also talk to other lawyers. And I think that they’re all saying that they didn’t get the kind of review that perhaps they or their friends had expected. So, they’re staying put and just watching the market.”

Market conditions are also likely impacted by economic turbulence – and particularly as redundancies are already beginning to occur, Ms Naiman said that lawyers are more likely to stay put.

“I think lawyers are mindful of, well, look, if we are going to go into a recessionary cycle, what does that mean for me in terms of job security? So, I think all those factors are playing into the supply pool.

“The other thing we’re seeing is that the employers are definitely winding back what they’re prepared to pay, particularly juniors. I think there’s almost a revolt against the idea of paying someone with practically no experience $110k or $120k, where there’s usually training involved, even if someone is two or three years PQE. We’re definitely seeing a pushback on that,” she added.

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“So, the question really is now boiling down to what value are we going to get out of this lawyer, rather than what are we paying them? And there’s been such a switch between it being a seller’s market to being a buyer’s market, and it’s a little bit hard, I think, for candidates to comprehend that there aren’t going to be multiple opportunities for them in the same way that there were last year.”

Ms Naiman also said that the tipping point and shift into the legal landscape no longer being a candidate’s market was very nuanced and happened slowly.

“What we found has happened is, whilst the mindset has definitely shifted from being a seller’s market to a buyer’s market, the reality is that there is still a ridiculous shortage of trained lawyers in Australia across multiple areas, in fact, probably every single area. And those candidates that are in the three and a half to ten-year PQE mark, who have had some decent training, regardless of whether it’s a buyer’s or seller’s market, will always be in demand,” she said.

“The mind shift and the nuanced thing that’s happened is the employers are less likely to put up with any silliness on behalf of the candidate. A client may have been prepared to wait for a week before getting a verbal acceptance, they’re now saying 24 hours. A client may have entertained a sign-on bonus, but they’re now saying no. Where an employer may not have felt that losing a candidate, a good candidate, over $5,000, made any sense last year, this year they’re just putting their foot down and saying, ‘no, we know this candidate is a great candidate, and they probably have 10 other opportunities, but we’re just saying no.’

“So that shift is a very nuanced shift, given that in some areas, you could still say that it’s a seller’s market because those candidates are so rare. But generally, that mind shift of the employer has definitely moved from ‘whatever it takes to get this person on board’ to ‘we’re absolutely not putting up with this nonsense’.”

This, Ms Naiman opined, is a combination of a fear of recession and the reality of the currently declining economy.

“Any fear-based thinking does flow down into conservatism and to the parameters that you’re happy to flex. I had a very experienced client articulate [part of it] to me. She said something along the lines of: ‘look, the market has shifted, and we’re just not prepared to put up with candidates. And if it means that we’re struggling and looking out for candidates longer than we ought to, or that we normally would have, well, that’s what it’s going to be’,” she added.

“It was such a severe seller’s market, and I think part of it is just the kickback from that feeling. I think it’s like, well, OK, we’ve done everything we could last year to get the right people on board, across the line, to keep the right people engaged. And this year, we may be heading into a bad economy. Yes, we still need lawyers, but we’re not putting up with the sort of behaviour that we did last year.”

The transcript of this podcast episode was slightly edited for publishing purposes. To listen to the full conversation with Elvira Naiman, click below: