2019 earnings: What lawyers were worth and what this means for 2020
The average salaries of lawyers at all levels and across many practice areas increased exponentially in 2019, with further growth predicted for 2020.
According to Beacon Legal’s Private Practice Salary and Market Report 2020, lawyers experienced “record-level” salaries, particularly in the areas of litigation, public M&A’s, construction and banking. The firm predicts 2020 will be a “great year” for solicitors to seek a new role and achieve further growth in their salary brackets.
However, this means law firms will see tougher competition in securing talent as there are more opportunities – and higher signing bonuses – offered across the profession.
“Demand for 3-6 PQE lawyers should outstrip supply and cause a price war,” Beacon Legal noted. “With a number of firms offering high salaries, even at a junior level, this forces the hand of other firms to do the same or risk missing out on candidates.
“Our clients have reported work pipelines going into 2020 which will continue to create job opportunities for lawyers to move laterally. As a candidate, we predict 2020 will be a great year to find a new role and achieve salary growth.”
Salaries hit record high as Sydney remains on top for growth
The “record-level” salaries saw special counsel in construction earn an average of a $300,000 salary, plus a $10,000 signing bonus. Litigation lawyers with the level 9 PQE earnt $220,000, construction litigation at 7 PQE earnt $190,000 and project finance at 5 PQE hit $160,000. The lowest record level saw litigation at 2 PQE earn $120,000.
Beacon Legal noted public M&A lawyers achieved “outstanding” salary offers, with the 3 PQE lawyer being offered $145,000 in Sydney.
Lawyers moving between firms can expect lateral salary increases of between 10 per cent and 25 per cent depending on their level of seniority.
Based on location, Sydney still led the pack with mid-tier firm lawyers earning between $70,000 for PQE 1 and $170,000 for PQE 9. At top-tier firms this increased to standing between $80,000 for level 1 and over $190,000 for level 9.
Melbourne’s mid-tier firm offerings were anywhere between $70,000 to $165,000, and its top-tier sat between $70,000 and $170,000. Similarly, Brisbane’s mid-tier reported an average of $65,000 up to $155,000 and top-tier between $75,000 and $160,000.
Sign-on bonuses improve competition within legal profession
Bonuses increased too, both in dollar value and in percentage of the firms which have paid bonuses. Beacon Legal said more lawyers are requesting bonus information from firms more regularly at offer stage and firms are competing to offer.
Top-tier firms are more generally operating on bonus schemes of up to 25 per cent of salaries, based on individual and firm performance.
“Sign-on bonuses are now commonplace and are usually between $5,000-$10,000. We expect this trend to continue into 2020,” Beacon Legal added.
“The main driver for firms to offer this sign-on bonus is when a candidate has multiple job offers. This is an area where Beacon Legal can add significant financial value to our candidate as we are highly experienced at achieving successful negotiations.”
The areas of law paying the highest
Recruitment in top-tier and large international firms improved steadily, with most of the demand being in litigation. There was also a demand for lawyers specialising within a technology, media and telecommunications practice area and in banking, while those practicing in M&A private exclusively felt a drop compared to recent years.
“The market demand for litigators has grown significantly over the past year,” Beacon Legal said. “Recruitment has remained constantly high. This is a trend we expect will continue in 2020, with a number of firms establishing ongoing recruitment drives.
“The main drivers have been the banking royal commission, increased regulation in financial services and the banks requiring more legal services than ever before.”
The final quarter of 2019 was noticeably busier within M&A, despite starting off slower than previous years, and Beacon Legal anticipates that this will continue. Lawyers with public M&A, IPO and ECM experience should expect higher demand in 2020.
Candidates with banking and financial services regulatory experience had higher than average demand, as did the market for TMT lawyers. The commercial property market was relatively slow in 2019 but demand in construction and infrastructure will be high.
Beacon Legal said demand for corporate lawyers remained steady over the course of 2019. However, with less demand in London due to Brexit, less Australians took jobs in the UK, which created fewer job vacancies domestically.