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‘The Australian legal market holds immense promise’ in FY24

Moving into the next financial year, energy and projects lawyers will be most in demand as firms increase their offerings to attract and retain talent, according to a new report.

user iconLauren Croft 09 August 2023 Big Law
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The nrol Law Firms Salary & Market Report 2023 notes a number of key trends within the legal recruitment market: an influx of international lawyers, an increase in the movements of lawyers within Australia, a decline in the intensity of salary competition and a shift in the areas of law that are in demand.

In conversation with Lawyers Weekly following the release of the report, nrol director Jesse Shah said that there are “multiple drivers fuelling the escalating need for legal services in Australia”.

“The intricate legal landscape necessitates specialised know-how to navigate convoluted regulations. Australia’s position in the Asia-Pacific unlocks cross-border business prospects, demanding legal guidance for transactions and regulations,” he said.


“Furthermore, an aging populace propels the demand for legal services encompassing estate planning, elder law, and healthcare.”

Last year, a candidate-short market was reportedly driving legal salaries up across the country following a turbulent two years and a global pandemic.

And as previously reported by Lawyers Weekly, many legal candidates in the Sydney and Melbourne markets also jumped ship coming out of statewide lockdowns to move either interstate or, when travel restrictions were eventually lifted, overseas — something which made the recruitment of senior and mid-level lawyers, in particular, tougher than ever.

In FY24, litigation and banking lawyers are expected to be in high demand, while corporate/M&A lawyers are expected to see a decline, Mr Shah told Lawyers Weekly.

“The Australian legal market holds immense promise for legal practitioners, spanning diverse practice areas like energy, competition, disputes, environment, cyber, and ESG,” he said.

“Demand thrives for mid- to senior-level lawyers, intensifying the race for top-tier talent, thereby elevating remuneration and perks. Moreover, the market beckons global lawyers, as prestigious firms readily sponsor adept foreign legal professionals at these tiers.”

While a candidate-short market has resulted in financial incentives such as a “loyalty tax” for firms to retain lawyers and significant salary hikes for entry-level law grad roles, it has also resulted in an increase in people and culture-led initiatives, such as flexibility and value alignment, despite the majority of lawyers preferring pay rises to perks.

According to the report, 42 per cent of lawyers leave their jobs for a better salary, 30 per cent for more flexible working arrangements, 25 per cent for increased career advancement, and 20 per cent because they were dissatisfied with their work/life balance.

This follows reports of lawyers being “very exhausted” and that “modern Australian work culture is not something to be envied”, with burnout rife in the legal profession.

This came after 83 per cent of Lawyers Weekly’s audience admitted that they were “very likely” or “somewhat likely” to work while on leave, and 39 per cent said they were working over 50 hours a week – well over the “ordinary hours” of 38 hours a week stated in the Fair Work Act.

“Although demand burgeons, the legal workforce encounters impediments. The profession’s taxing nature, lengthy work hours, and soaring legal education costs discourage potential entrants. Resolving these hurdles is pivotal to cultivating an all-encompassing and diverse legal community,” Mr Shah added.

“Remaining competitive mandates that law firms spotlight distinct proficiency, inventive solutions, and exceptional client care. Embracing technology becomes imperative, with AI tools, document automation, and legal research platforms augmenting efficiency and cost-effectiveness. Adapting to market flux and investing in professional growth programs are indispensable to lead the field.”

In addition to more common hybrid working, parental leave entitlements and bonuses, law firms are now, according to the report, offering mentoring programs and training courses for professional development, wellbeing initiatives and tuition reimbursement.

However, legal salaries remained stable across the Sydney and Melbourne markets, with Perth now on a similar trajectory to Brisbane.

“The legal recruitment market in Perth is currently in a state of flux. On the one hand, there is a strong demand for legal talent, particularly in the areas of energy, resources, and projects. This is due to the continued growth of the Western Australian economy, which is being driven by the mining and resources sectors. On the other hand, the supply of legal talent in Perth is relatively limited, which is putting upward pressure on salaries,” the report stated.

Areas of high demand in Perth are energy, projects, environment and planning, employment and commercial litigation, with senior associate salaries at top-tier firms in the state starting at $150,000, compared to $155,000 in Brisbane, $160,000 in Melbourne and $177,000 in Sydney.

Within the Sydney market, mid-tier and boutique firms are now able to compete for top talent, according to the report, which noted that these firms are hiring more aggressively and offering more competitive salaries and benefits.

Across all markets, the report predicted that projects and energy lawyers would be in the highest demand moving forward, as well as litigation and banking lawyers, with corporate and M&A expected to take a hit in a declining economy.

For law firms, the implications of these trends mean that they need to be prepared to compete for talent – both by paying “competitively, but not excessively” and offering competitive benefits and “a positive working environment”, according to the report.

“I’m invigorated by the vibrant opportunities within the Australian legal realm. Nurturing talent, championing diversity, and welcoming innovation can unlock the market’s full potential, steering its trajectory,” Mr Shah added.

“The Australian legal sphere extends a dynamic and auspicious terrain for legal practitioners. The demand for services, international inclusivity, and the requirement for specialised prowess paint a promising picture. By surmounting challenges, fostering inclusiveness, and staying attuned to market dynamics, we can harness the Australian legal market’s potential and propel its ongoing triumph.”