As reported by Lawyers Weekly, fewer law firms are currently prepared to negotiate higher individual salaries, with research showing that the number of firms prepared to offer above-CPI wage increases has dropped from last year. One recruiter reflected that some lawyers would be “disappointed” come review time, as salary increases will not be as high as last year’s.

Now, it appears that the big end of town is starting to make redundancies to back-office roles, such as business operations and administrative support roles.

Lawyers Weekly understands that this is happening within at least two BigLaw firms: Clyde & Co and MinterEllison.

When asked by Lawyers Weekly why the firm is making such cuts and how it plans to move forward in the new financial year, a spokesperson for Clyde & Co said: “As with all large, professionally managed global businesses, we regularly review our performance and operations to ensure that our teams and practices are of the right size and shape to effectively meet the changing needs of our clients around the world, in a profitable way.”

“It is therefore natural that as well as adding people to our business, as we have done at a record pace in the past 12 months, there may at times be departures from the firm,” the spokesperson explained.

Similarly, a spokesperson for MinterEllison said: “We are realigning our business support functions to ensure the continued delivery of services is effective and efficient. As with any organisation, we evaluate our structure from time to time to ensure we are best positioned to meet the needs of our clients.”

“Occasionally, this necessitates restructuring certain functions and roles within business operations.”

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“We are supporting our people through this time, including providing extended access to career transition support and counselling. Where possible, we are also exploring redeployment,” the Minters spokesperson detailed.

“We continue to experience growth and are actively recruiting in areas that support our strategic priorities and address areas of high demand.”

The Clyde & Co spokesperson added: “While losing people from our firm is never easy, we always ensure that colleagues are supported as they seek new opportunities, and they always depart with our best wishes and thanks.”

In conversation with Lawyers Weekly, Naiman Clarke director Elvira Naiman detailed that Australia’s larger firms have “huge back-end operating expenses”, and some firms have as many non-income-producing staff as they do income-generating ones.

“Despite the economic doom and gloom, law firms in Australia remain busy; however, I suspect they are consolidating resources in time for a possible economic downturn. Essentially, departments that cover marketing, finance and operations are where firms feel that some ‘trimming the fat’ is possible,” she mused.

“Also, with the uptake of AI and other technological advances, together with a continuing push towards outsourcing some non-business critical functions, undoubtedly will lead to ongoing redundancies in back-end staff in the foreseeable future.”

Burgess Paluch director Doron Paluch added: “Some firms went too hard with salary increases last year and are now trying to recalibrate by making a handful of strategic redundancies.”

“But, the vast majority of firms are simply acknowledging recent market conditions and being more cautious about hiring. Most firms are still busy, and it is still hard to find quality professional and support staff, so astute firms are keeping their eyes out.”

Elsewhere, Kaleidoscope Legal Recruitment national manager Anthony Pace noted that he has not yet seen an increase in redundancies across back-office roles. Larger firms, he said, “are being more strategic with recruitment but are still looking to bring in quality people across all areas”.