As the European debt crisis reaches a tipping point and the United States struggles to avoid recession, the Australian legal recruitment market is treading carefully. But as Briana Everett finds out, law firms are still on the hunt for talent

One the eve of the 2011 G20 Leaders' Summit in Cannes this month, Greek Prime Minister George Papandreou shocked Eurozone leaders with his surprise announcement he would hold a referendum on the country's €130 billion ($173 billion) bailout deal.

Causing anger amongst world leaders, including the G20 summit host, French president Nicolas Sarkozy, Papandreou's drastic move- and his subsequent decision to step down - once again threw into doubt the likelihood the debt crisis will be contained any time soon, cultivating fears that the world could soon plunge into another financial crisis.

With mounting fears that the current debt crisis could get even uglier, Australia's Minister for Foreign Affairs, Kevin Rudd, conceded that Australia is not immune to the market turmoil in Europe, telling a CHOGM press conference on 25 October that the European debt crisis could have major global repercussions from which few economies would be immune, and that Australia awaits the outcome with "keen interest".

"What happens in Europe in the financial markets and the stability of those markets affects Australia," he said. "It affects Asia, it affects the rest of the world, including Africa, Latin America and all the countries represented here at this Commonwealth Forum."

While Australia's resilience to global economic volatility has been emphasised by Australian leaders, including Rudd, some of the Australian branches of the world's largest professional services firms have already demonstrated their struggle as merger and acquisition activity slows.

Last month, professional services firm KPMG confirmed it would offer voluntary redundancies and part-time working options to 5000 of its Australian-based staff.

"We're seeing a tough, uncertain, challenging and patchy market," KPMG's Australian chief executive officer Geoff Wilson told The Sydney Morning Herald on 25 October.

"While we're experiencing year-on-year growth, we're seeing some softening in that growth. [We are trying to] create flexibility in response to the patchiness we're seeing in the market."

But despite this backdrop of plunging global confidence, Australian legal recruitment consultants say law firms are hiring - albeit warily. And, in some areas, law firms are crying out for more lawyers.

"It's an interesting market at the moment because there is a degree of caution being exercised. Law firms are still recruiting, but they're doing so very conservatively," says Burgess Paluch Legal Recruitment director Doron Paluch.

"We're neither in boom times nor are we in redundancy times."

In the last couple of months, as the crisis in Europe has quickly come to a head, JLegal private practice manager Jenny Bermheden has noticed a more constrained approach amongst firms when it comes to what type of lawyers they will interview and ultimately hire, despite still having plenty of vacancies.

"We're really noticing that [firms] are being much more specific with regards to [hiring] requirements and this is exactly what we saw last time when the global financial crisis hit," says Bermheden.

"Firms are being careful and very cautious and don't want to hire too many lawyers to then have to turn around and [make redundancies].

"Lawyers need to meet all the requirements in terms of level of PQE, area of specialisation and so forth. There's very little flexibility from [law firms]."

Similarly, Naiman Clarke consultant Dominic Peacock says while firms are still recruiting, they are doing so on an "as needed" basis.

"Firms will focus on those roles that are urgent ...Firms are being cautious because it's the old 'once bitten, twice shy'," says Peacock. "But, at the same time, there's not going to be this huge knee-jerk reaction in law firms, unlike accountancy firms like KPMG and Deloitte.

"Comparing today's legal market to the pre-global financial crisis market, Peacock says Australian law firmsare now better managed, leaving them better equipped todeal with what the global market may throw at them in the next few months.

There has been an awful lot of recruitment. The busiest area for us [is banking and finance]. If we could find 100 banking lawyers," says Harris. "Banking and project finance are really, really busy. That has to be because people are confident so, for the moment, it's good.

"In contrast, Taylor Root manager Brian Rollo says the market for in-house lawyers in the banking and finance space is "dead".

Citing a lack of headcount approval amongst corporations because of the current global market uncertainty, Rollo says there have been few in-house transactional roles available this year.

"Banks and corporates that hire transactional lawyers haven't got any headcount approval because of overseas issues. So they've been massively impacted by what's happening in Europe," he says.

"Law firms are hiring loads of finance lawyers, which obviously indicates that the work is there to be done, but there's no headcount approval."

"Other sectors, like energy and resources, construction, media and professional services, have all been reasonably busy," he says. "[We've] had quite a lot of senior work mainly in construction and energy and resources. There have also been a fair few financial services regulatory roles. That's what's kept us busy for the year."

As a result of market uncertainty and the associated limit on headcounts, Rollo says he has also noticed an increase in contract roles for in-house lawyers in the last couple of months as corporations aim to finish outstanding projects.

"The longer the global uncertainty drags on, the more corporates are worried about adding additional headcounts," he says. However, while law firms and some corporate sectors are demanding more lawyers, Australia's legal recruitment market remains short of candidates, leaving few lawyers for firms to choose from, thus exacerbating an already sluggish hiring process as firms remain cautious during the recruitment process.

While there are candidates on the market, recruiters say lawyers are also being cautious when it comes to making a move.

"There are lots of jobs, but not as many quality candidates in the market," says Marsden director Greg Plummer, adding that some law firms are now looking at foreign-qualified lawyers.

"The quality just doesn't seem to be in the Australian market. [Lawyers] at that three to six-year level seem like they're staying put. Maybe they're waiting for the overseas markets to get a bit better and biding their time, but some of them could be taking advantage of all these opportunities.

"If you're a good quality lawyer and you're at the right level then you've got options."

Observing the high demand for lawyers in Perth despite the market uncertainty overseas, Naiman Clarke international consultant Liza Davenport notes the struggle of Perth-based firms to find the talent they need.

"In Perth, firms don't have access to all the lawyers they want," she says. "They should focus on bringing in a lot of lawyers from outside of Perth."

Similarly, Harris says Perth and Brisbane firms are now recruiting a number of energy and resources lawyers from Scotland, northern England and from firms outside ofLondon as a result of this struggle.

"I don't remember [Australian firms] being quite so open to lawyers from firms outside of the traditional London based magic circle firms," he says.

And, he adds, salaries are looking good.

"Sign-on bonuses are still relatively rare but salaries are excellent," he says. "Obviously, the traditional firms that pay very well still are, but some of the o_x001E_ffers that are coming from top-tier fi rms are really great.

"Due to the shortage of top talent, while firms are being conservative, Peacock adds that if a firm finds the right candidate, they will move quickly to secure them.

"Where there are good candidates, firms will move fastand I have seen some instances where firms have been offering sign-on bonuses," says Peacock. "I wouldn't say it's hugely prevalent but I have seen that in the last 12 months."

Where lawyers are looking

Citing global uncertainty and the fact that Christmas is approaching, recruiters suggest lawyers might be staying put as they monitor overseas markets and consider their international options. And while a lot of lawyers are not actively looking, Bermheden says many are interested in hearing about opportunities which could provide them with more room for career progression and increased job satisfaction.

"I'm approaching lawyers, speaking to them about vacancies, and they are very willing to listen because I think they realise there are opportunities out there," she says.

"We still have a large number of candidates that are actively looking [and that is because] of location. Especially if they're in corporate and they really want to focus on energy and resources, some lawyers are looking at options in Perth and Brisbane.

"Australian lawyers are also continuing to consider opportunities in the Asia Pacific region, with many looking to make a move.

"We're getting lots of lawyers wanting to make a move to Hong Kong or Singapore," says Paluch.

"Unfortunately for a lot of Australian lawyers at the moment, not only is there a degree of caution being exercised by law firms over there, but language (Cantonese or Mandarin) has once again become very important.

"For Davenport, the European debt crisis has not slowed things down in Asia, and she has a constant flow of Australian candidates wanting to move to Hong Kong or Singapore.

"I'm really busy in Hong Kong right now," she says."The corporate mergers and acquisitions teams and the corporate capital markets teams are needing lawyers ... We have just started looking at Singapore as well ... There's alot of hiring going on there."

What to expect

Highlighting the degree of caution currently amongst firms, most recruiters are relatively positive about what's to come and expect the market to remain stable - at least in the short term.

"There's more positivity in the market. It just feels much better than it did six months ago," says Plummer. "Lawyers are much more realistic about what their prospects are and some are just willing to sit and wait ... There are jobs and the market appears to be relatively stable.

"While not predicting a massive upturn, Peacock expects recruitment activity to continue.

"I think it will be relatively stable ... I think it's just goingto plod along and stay stable. It will probably slow downbetween now and Christmas but pick up again slightlybefore the end of January."