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Aussie lawyers ‘a much higher flight risk’ than global counterparts
New research reveals that Australian practitioners are “uniquely dissatisfied” with their firm employers despite the resources said firms are investing in talent.
Jerome Doraisamy
Global content and technology company Thomson Reuters has released its 2023 Australia: State of the Legal Market Report, produced by the Thomson Reuters Institute. Financial metrics for the report were collected from 20 participating law firms in Australia, including some of the largest in the region by headcount. Global metrics were based on more than 230 firms, primarily located in the US as well as the UK.
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As previously reported by Lawyers Weekly, Australian law firms are weathering softening demand and rising expenses well, but declining productivity – together with headcount increases outpacing demand growth – are causes for concern.
Rising costs, by way of both direct and indirect expenses, outstripped revenue growth in Australian firms in the past year, with total expenses for the average law firm growing by 11.6 per cent in the past 12 months. Direct expenses were up 11.4 per cent in the last financial year, while indirect expenses are up 14.3 per cent, due in part to the cost of expansion and inflation on the bottom line for firms.
The report also found that, despite the resources firms are putting into their talent, “Australian lawyers appear uniquely dissatisfied” with key aspects of their firms compared to their global peers.
The report detailed that the average Australian lawyer is “distinctly less satisfied” with their firm’s reputation than the global average.
Moreover, lawyers here were less positive on their net promoter score (NPS), giving their firms an average score of +56 per cent, while the global average was +68 per cent.
“Most troubling of all”, Thomson Reuters wrote, is that Australian standout lawyers “pose a much higher flight risk”.
When surveyed on the likelihood of moving firms, 80 per cent of global lawyers responded they were “somewhat unlikely/highly unlikely” to leave their current law firm, while in Australia, the rate was 65 per cent.
This, the company surmised, is “a potentially concerning disparity”.
It is worth noting, Thomson Reuters went on, that compensation does not appear to be an issue for Australia-based practitioners, with those Down Under not listing increased remuneration as a key reason to leave their law firms.
This, the company posited, “is both good and bad news” for firm leadership.
“With their expenses already bloated, they can be less concerned about the need for larger bonuses to keep their fellowship at the firm together. The bad news is that non-financial discontentment can be more difficult to fix, especially if it is related to systemic issues,” it espoused.
Either way, the report reflected, “discontent in the ranks is a lurking threat to firms”, as it suggests the potential for serious pushback if they try too aggressively to push down costs or make other moves to which the lawyers object.
