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Has the Great Resignation actually occurred?

“Australian lawyers have never been in higher demand”, which means that the movement being experienced across the sector is potentially less of a Great Resignation and more of a Great Realignment.

user iconJerome Doraisamy 12 April 2022 Big Law
Great Resignation
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Since late last year, there has been talk of a looming “Great Resignation”, in which professional services sectors, including law, would see a mass exodus of employees who – by virtue of having had added time to reflect on what is important to them during the age of COVID-19 – determined that legal practice was not for them.

There has existed a “disconnection”, which would help drive this exodus and would serve as the “wake-up call” that many Australian law firms needed in order to better thrive moving forward. Some law firms quickly moved to consolidate and retain staff, offering “aggressive” salaries that caused headaches for in-house employers.

However, not all were convinced. Carlyle Kingswood Global director, in-house (legal and governance), Phillip Hunter told The Corporate Counsel Show in November 2021 that we would instead see a “Great Scramble for Talent” across the legal profession. A perceived lack of resignations was also labelled as the “Great Hesitation”.

 
 

So, has the Great Resignation come to pass? Here – and in another story to be published tomorrow – Lawyers Weekly circles back with industry professionals who have been keeping ears close to the ground.

The unfolding of the mass exodus, or not

We are currently experiencing the “tightest candidate market” the Australian legal sector has ever witnessed, Taylor Root partner and head of Australia Hayden Gordine espoused.

Rather than being a market in which lawyers are seeking alternative careers outside of the law, Australian professionals “have never been in higher demand, locally and internationally”, he said.

What has manifested, in his eyes, is a “Great Migration”.

“In our opinion, this has had the biggest effect on the Australian market. Historically, the Australian legal market has managed the annual exit of lawyers to London and New York especially well with returnees and inbound UK lawyers filling the void, but 2021-22 has seen unprecedented demand for transactional lawyers internationally, including for the first-time junior lawyer with less than two years of PQE,” he said.

“What we are witnessing is multiple pressure points on candidate supply: one way migration, a buoyant in-house, and lawyers transitioning from mid-tier to top-tier.”

LOD Australian managing director Paul Cowling agreed, observing that the myriad opportunities currently in front of Australian lawyers, from private practice to in-house, are resulting in much movement.

As such, he doesn’t yet believe that the Great Resignation has come to pass – at least, not yet.

This said, “people are slowly coming out of a period of great uncertainty and challenge and are now finally, and only naturally, able to ask themselves – ‘what’s next?’,” he reflected.

“The answer to that may be a new challenge, or leaving an employer within which they felt undervalued. But equally, it may be a proactive recommitment to an existing employer. So, I think we are witnessing the ‘what next’ question, or what we have termed the ‘Great Realignment’, but the answer to that differs due to motivations, available opportunity and experience of current employers during the past two years.”

Against this backdrop, and as for whether the mass exodus comes to pass, Keypoint Law chief executive Warren Kalinko deduced that it is too early to say if this will eventuate, as recruitment processes usually take six to 12 months at the senior level. 

“The levels of interest and enquiry are very high, and there’s a real mood for change. But we won’t know whether that will translate to movement until Q3 or Q4 this year,” he suggested.

“We anticipate higher levels of enquiry from lawyers who may not be satisfied with the outcomes of upcoming bonus periods, or EOFY rewards.”

Predictions for the remainder of the financial year

The trends of opportunity creation, Mr Cowling proclaimed, are set to continue.

“Whilst the economic environment continues to allow, law firms will continue to search for talent – both opportunistically and planned. Client demand will mean continuing pressure on the firms to do more, which in turn can only create further opportunity,” he explained.

“Firms will also benefit from the opening of international borders, a less rigid visa environment and people’s increasing comfort with travel to take advantage of the global talent pool into Australia.”

Between now and 30 June 2022, Mr Gordine does not anticipate “any let-up” in the ongoing challenge of candidate supply.

“There has been an underlying reluctance of local talent to move locally in Q1, which is set to continue until at least end of year salary reviews. We really felt that 2021 was the year where lawyers rethought their careers, work/life balance, and long-term goals and sought flexibility, working from home and in some cases firm changes,” he outlined.

“Candidate confidence is at an all-time high, and firms must be aware [of] what could drive their individual lawyers to change jobs, especially when they have some much choice.”

A “big glimmer of hope”, Mr Gordine pointed out, is an influx of Australian returnee lawyers at the end of the UK summer.

“Traditionally, around October, lawyers look to make a move back to Australia in time for Christmas, we are aware of many Aussie lawyers staying in the UK for the summer with the view to returning home for 2023.”

This said, Taylor Root is not predicting a “tsunami of UK lawyers to hit Australian shores”.

“The UK is so strong at the moment, the salaries are so good, the summer is promising that we don’t predict an influx until much later in 2022,” he listed.

Duty of firm leaders right now

The age of coronavirus has given legal professionals an opportunity, Mr Kalinko extrapolated, to re-evaluate.

“It allowed a connection with what’s important, to move to centre stage,” he said.  

The implications for law firms, he noted, are profound.

“The entrenched ‘command and control’ philosophy of traditional firms is no longer in vogue. Now more than ever, lawyers want more freedom, more flexibility, more control,” he said.

“Many firms have responded by permitting lawyers to work from home two days a week. However, people can be under as much pressure working at home, as they were at the office. True flexibility requires law firms to jettison billable hour targets, timesheets, and the other methods of financial micromanagement to provide lawyers with the control and freedom they need to operate with flexibility across the board.”

This is how Keypoint operates, Mr Kalinko added, making it one of very few, if any, mid-tier firms to do so.

“A wider realisation that true flexibility goes beyond WFH arrangements is the response that this Great Resignation period is calling for,” he went on.

“The challenge for law firm leaders is to meet this groundswell for genuine flexibility and control. If they are unable to meet that demand, competitive offerings from challenger firms will continue to succeed in the war for talent.”

When asked – from a recruitment perspective – what leaders of law firms, of all stripes, can do in response to the aforementioned marketplace trends, Mr Gordine prefaced his thoughts by acknowledging that law firms are, overall, “doing a great job” with retention as their foremost priority at present.

“Salaries have increased significantly, discussions around promotion are open, there is a high degree of flexibility compared to pre-COVID-19,” he mused.

The biggest concern he and his firm are hearing, he said, is about under-resourced practice groups, “resulting in extreme working hours and continuous weekend work”.

“Any hiring that could ease that pressure would be viewed positively from many of the lawyers we are dealing with,” he warned.

Mr Cowling said that leaders should be paying close attention to their teams and people who have remained loyal over the past two years and invest in their future and aspirations.

“Whilst the risk of the Great Resignation is very real, so too is the opportunity for employers to demonstrate real loyalty and appreciation of the value of current employees,” he advised.