After a period of stagnancy and rigidity following the GFC, the Australian legal profession is now starting to experience a shortage of lawyers.

This can only be good news when it comes to salaries.

According to Hays Legal, jobs are once again starting to flow but the market for quality candidates is extremely tight. “Employers are competing with each other for market share and talent,” says the Hays report. According to Mahlab, movement in base salary levels within law firms has been significant in 2011, with an overall average salary increase of 23 per cent nationally.

So where exactly is the talent going to get the best salaries? Which cities are hot and which cities are not? Lawyers Weekly finds out.

Perth

When it comes to cities that are hot in the salaries department, Perth has to sit at the top of the list for the simple reason that it is currently Australia’s darling. This is no different in the legal sector.

Particularly in the energy & resources-related sectors, salaries have been steadily creeping towards what lawyers in Sydney can expect, and are now considered to be in line with those in

Melbourne

“Perth salaries have been steadily increasing at a faster rate than other states over the past few years and are now on par with Melbourne salaries or higher for certain practice areas, for example energy and resources and corporate/M&A,” says the latest Mahlab salary report. Taylor Root drew similar conclusions in its report, saying, “We have seen lawyers in Perth being offered salaries comparable to Sydney and, in the core practice areas of energy & resources, projects and construction, sometimes more than they would achieve in Sydney.”

According to Gareth Bennett, the people and development director at Freehills, Sydney and Melbourne may not hang on to their traditionally market leading salaries for too much longer.

“We have always got to be prepared for change, and to assume that the stereotypes and hierarchies that have existed up until now will continue is something that we can’t take for

granted at all,” he says. “We’ve got to be ready. That’s why we look at the markets very carefully and look at how salaries are changing.”

For Allen & Overy Perth managing partner Geoff Simpson, brand, quality of work and, of course, bonuses all play a role in attracting talent to Perth.

“A&O has global, over-riding principles on reward, and it is the total package, not just

the dollars,” he says. “Part of that is obviously a bonus as well. That’s a discretionary thing. It’s not formulaic. It’s based on rewarding contribution in the wider sense.”

If you’ve got the right skill set, the world is your oyster in Perth.

Brisbane

If there is one city that is proving to be the dark horse on the salary front, it’s most definitely Brisbane. Also a booming energy and resources state, salaries here are steadily on the rise and don’t look like slowing down anytime soon.

“The traditional gap between Brisbane and Sydney has … narrowed and candidates can expect to receive competitive offers more in line with those seen in Melbourne,” says the Taylor Root salary report.

Hays Legal also sees Queensland as ripe for the picking for those looking for strong salaries in an energy-related field. “The demand for skills is perhaps most obvious in Western Australia and Queensland, where the legal market has nearly reached pre- 2008 conditions of job richness and candidate paucity,” says the report.

According to Bennett, the rate of growth of law firms in Brisbane is such that he can see salary dominance in energy and resources shifting north.

“If you look at where the real growth stories are at the moment, then the Perth and Brisbane markets are absolutely booming,” he says. “The Brisbane office for us is the real growth story for the firm.”

Sydney and Melbourne

Despite the boom being experienced in Perthand Brisbane, Sydney still has the edge when it comes to salaries, according to JLegal. Despite this, though, Randstad says salary increases have remained modest, largely due to Sydney’s vulnerability to the impact of international economic trends related to its position as the corporate and financial hub of Australia.

“Salary increases have been conservative since 2010 with an expectation that 2011 will provide an average increase of between five and seven per cent in annual salaries,” says the report.

“Bonus components continue to be factored into remuneration packages as an added financia lincentive for the highest performers.” Randstad also says the Melbourne market has shown good signs of a recovery since the GFC, although job opportunities are yet to return to 2007/08 levels.