Salaries, bonuses and benefits: What lawyers are worth
Remuneration, salary bonuses and incentives are key to retaining staff as competition for mid-level lawyers becomes fiercer than ever, according to the Mahlab Report 2019.
However, salaries and incentives are pushed aside in favour of expenditure on the firm’s growth and sustainability past 2019. This has seen a decrease in mobility across corporates and little financial upside for many in-house lawyers to make the move.
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Mahlab NSW MD Lisa Gazis said this is despite increased revenue reported overall in the larger firms: “It is tempting to assume that because law firm revenues have gone up, salaries and bonuses will also increase markedly.
“However, our research indicates that this is not the case across the board.”
According to the report, while corporations will often meet the market expectations and offer increases to lawyers to join their organisations, they have been conservative with salary packages for new starters. This could be due to distractions for other costs.
The report noted other essential expenditure: “All of the firms are having to invest huge amounts of money in technology, while others are ‘battening down the hatches’ for a much softer 2019-20 than is heralded publicly.”
In corporate law, Sydney lawyers with more than 10 years’ experience were given the highest salary packages with an average of $245,000. Lawyers with one to five years’ experience were offered a salary of between $88,000 and $160,000.
Melbourne’s highest salary was just under Sydney, sitting at an average of $235,000. Perth was at $228,000, Brisbane at $225,000 and Adelaide at an average of $208,000.
In private practice, experienced lawyers in major Sydney law firms had an average of $260,000 with a top of $340,000. Melbourne lawyers had an average of $225,000 and Brisbane sat between a $140,000 and $175,000 salary for high experience.
Mid-firms had an average salary of $80,000 through to $250,000, per experience and city. Small commercial CBD firms had an average of $63,000 to $176,000.
Corporate secretaries reported a positive year, with those holding legal qualifications tending to be preferred by many employers. In publicly listed companies, their salaries sat at an average of $285,000, or $240,000 for non-publicly listed companies.
On average, a general counsel will have a short-term incentive component of around 20 per cent to 40 per cent. Long-term incentives are often paid in addition to those of a shorter term for general counsel in ASX-listed companies.
In corporate firms, remuneration, benefits and bonuses remain effective tools to retain staff, along with flexible work practices that give lawyers control of how they work.
According to the research, the bonuses typically ranged from 10 per cent to 25 per cent, despite lawyers reporting that they received 75 per cent of the potential bonus target.
“Good performers will almost always be rewarded and bonuses together with another benefit in a low-wage rise environment have been utilised to reward,” the report noted.
In private practice specifically, the public face of remuneration overall shows moderate salary increases and movement in the salary band across all states.
The report noted that bonuses, if paid at all, were limited to those who had exceeded budgets after an “especially demanding and lucrative deal or litigation”, with those on the upper end receiving 15 per cent of a lawyer’s salary package.
“Unfortunately, these rewards are enjoyed by only a few. The rise in contracted senior associates keeps the bonus budget low, as they are generally not eligible to receive a bonus at all,” the report noted, adding that despite growth and activity, partners have become reluctant to share equity through organic promotion.
The proliferation of royal commissions has also shaped the salary and remuneration benefits for lawyers as boards become more conscious of their liability.