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‘Expectations are higher’ for firms trying to attract Gen Z talent

Generational workplace trends will, in 2024, have a significant impact on the Australian legal profession. Here, legal recruiters outline what the market for junior lawyers will look like this year and how firms can attract and retain young talent.

user iconLauren Croft 28 February 2024 Big Law
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Despite partners now being optimistic about the development of next-gen leaders, Gen Z workers are still pushing away from office culture and looking for shorter-term roles compared to previous generations, as work/life balance and flexibility remain important to younger lawyers.

Post-Great-Resignation, are firms struggling for talent?

Following the Great Resignation, in 2022, a candidate-short market was reportedly driving legal salaries up across the country following a turbulent two years and a global pandemic.


Many legal candidates in Sydney and Melbourne also jumped ship – something which made the recruitment of senior and mid-level lawyers, in particular, tougher than ever. When asked if firms are still struggling for talent in 2024, Naiman Clarke managing director Elvira Naiman’s response was a resounding “yes”.

“The inherent issues in market dynamics have not changed, notwithstanding the fact that we are in a softer market. The fundamental industry issues have not been addressed. Now there is just a dearth of litigation lawyers of all kinds instead of last year there being a dearth of transactional lawyers,” she said.

Previously, the candidate-short market in Australia 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, as well as an increase in people and culture-led initiatives, such as flexibility and value alignment, despite the majority of lawyers preferring pay rises to perks.

But talent shortages could only worsen as economic conditions improve, G2 Legal’s director for Australia, Daniel Stirling, warned.

The legal talent market is highly competitive, and the best lawyers are always sought after and hard to find. There has been a slight shift back towards an employer-driven market as some areas have slowed, such as international firms hiring Australian lawyers, when compared to the last few years where demand from all areas was far outstripping supply,” he told Lawyers Weekly.

“That said, although there has been some rebalancing in this area, the candidate market remains tight, and this shortage may increase again as the year goes on if global economic conditions improve as predicted.”

Gen Z candidates

As recently reported by Lawyers Weekly’s sister brand, HR Leader, nearly half of Gen Z workers (48 per cent) are looking to change jobs in the next year, with 74 per cent seeing a job change as a drive of career development.

Younger candidates also value flexibility above all else, in addition to the culture of the organisation and, of course, the salary, according to Beacon Legal associate director Chad Weerasinghe.

“Over the past two years, law firms have heavily revised their salary bandings to have a competitive advantage over peer firms, to retain existing talent (and combat overseas moves) and attract the best external hires,” he said.

“There is an abundance of data available for lawyers in terms of what bandings they should be looking to achieve, and as they say, ‘knowledge is power’. Most lawyers are looking for a 60/40 split in terms of WFH arrangements, and firms that were not supportive of this approach tended to lose out to competitors offering this form of approach.

“Culture has been a top pick for lawyers; however, since the onset of COVID, significant salary revisions and the rising cost of living, culture is an area where lawyers are willing to compromise, favouring instead to be on the best-paying options in the market.”

More junior lawyers, MLA Global Sydney managing director Ricardo Paredes outlined, also want to be valued and seen within their organisations.

“[Young lawyers] care about working with partners and other senior lawyers who are good people, handle great quality work, roll up their sleeves and get in the trenches with the younger guys and actually care about their team. Young lawyers want to feel valued and want to be seen. They seek to work with others who they will learn from and who they can look up to,” he said.

“Some firms are pulling out all stops to detain their lawyers from leaving by increasing their pay and promising greater exposure to the type of work they seek to handle.”

Job hopping among younger employees is also becoming more common in the legal profession, as previously reported by Lawyers Weekly. This year, contracting roles are also predicted to be on the rise as the profession adapts to a “more fluid workforce”.

“Many candidates go all the way towards an offer only to finally decide that they should stay, or being indecisive about what it is that they actually want. Firms are complaining that direct applicants are not committing to accepted offers, backing out at the last minute, sometimes without much explanation. I think there are a lot of feelings of disappointment on both sides,” Ms Naiman explained.

“I think candidates don’t feel that firms are ultimately coming to the party in terms of salary, title, and flexibility, and law firms are finding candidates are flaky and won’t commit to what they say they will commit to.”

In addition, counteroffers are becoming commonplace for firms – although Mr Weerasinghe said that this can have adverse effects for lawyers.

“Typically, rather than lose a top performer and risk having to find a replacement in a slower market, we have seen firms offer salary, promise more challenging and relevant work, and even review promotion timelines. Whilst this seems like an attractive solution, the reality of accepting a counteroffer is far from attractive in most cases.

“A retention-based increase in salary would typically mean the candidate would then not be eligible for a salary review and performance-based increase, and in essence, the firm ‘claws back’ whatever increase was provided upfront (leaving the candidate ultimately worse off). Further, despite promises of career advancement, a large volume of lawyers found that promises made by their firm were not fully realised, leading these lawyers to re-enter the market within six [to] 12 months,” he outlined.

“A final point to note is the ‘brand damage’ a lawyer would experience by accepting a counteroffer. The fact that the individual was actively seeking other opportunities can create a sense of distrust, making it challenging to rebuild a strong professional bond. Additionally, turning down an offer with another firm will likely damage that lawyer’s chances of securing a position in the future, narrowing their career development options down the line.”

This is also not as big of a trend as it has been in previous years, with some lawyers still having somewhat “unrealistic” expectations when it comes to salary negotiations.

“We have seen occasions where candidates are receiving multiple offers and/or counteroffers from their employers. However, there is less desperation to throw money at lawyers to stay or join them over a competitor as was prevalent in 2022 and early 2023,” Mr Stirling added.

“During this period, some teams at top firms had lost 50 per cent or more of their lawyers and were therefore willing to pay whatever it took to keep high performers. In a more normalised market, this is now less sustainable. In some cases, lawyers may still have unrealistic expectations when looking at other opportunities, given the salary increases in the last few years.”

Generational trends

Compared to their older counterparts, younger lawyers are also moving on from roles quicker – a generational trend recruiters are seeing more and more of.

“It is certainly more common these days to see lawyers at, say, four or five years PQE with multiple roles on their CV already. There can often be good reasons for the change, such as team moves or other factors, such as a desire to take on new work or responsibilities. Others may have suffered redundancy during the COVID period. However, I would advise junior lawyers considering moving for pay increases at this level that this may hinder them in the future,” Mr Stirling added.

“For example, when some of our in-house clients are hiring at the five-year level straight from private practice, they will only consider lawyers with one, or maximum [of] two, roles during this period. This can be because they want this person to commit for a reasonable period of time or relating to concerns that, in their experience, lawyers are generally given more responsibility and challenging work once they have been at a firm for a year or two and proven themselves. So, if the lawyer has had three roles at one to 1.5 years each, they may never have gotten to this point of being given the highest quality work.”

While mid-level lawyers have been hard to secure post-pandemic, more lawyers are also jumping at the chance to practise overseas – and Mr Paredes said that this is likely to result in a higher domestic demand for lawyers.

“Over the next six months, I expect there to be much more domestic market demand for lawyers compared with demand from firms abroad for Australian talent, but we’ll see,” he added.

“Either way, 2024 is pointing to what may be a relatively buoyant domestic legal market and healthy year for law firms and law firm recruitment more generally.”

However, Mr Weerasinghe added that despite junior lawyers increasingly looking for “the right international opportunity”, they may be better off on home soil.

“We are seeing significant numbers of juniors reach out to us to discuss options in London, Europe and the US, to name a few. In reality, at these junior levels, these lawyers are better served staying put and gaining more experience (if at a top-tier or international firm) or making a step-up domestically and gaining top-tier/international experience for a couple of years (which is what we tend to advise).

“Obviously, the desire to travel is a strong ‘pull factor’, and most juniors tend to accept our guidance; however, several still make the moves internationally without securing a suitable job. This may seem like a non-issue at this moment; however, if you are not in an associate or senior associate role (or equivalent) and are developing your career whilst away, the return to Australia is very difficult (with firms taking a view of you becoming deskilled during your time away),” Mr Weerasinghe said.

Securing and attracting talent in 2024

In 2024, workplace culture and high-quality work is most likely to attract young talent, as well as salary and flexible working.

“A competitive pay offering will be essential, and for the firms that are able to, they should sell their flexible work policies as many lawyers remain attracted by working at firms that offer WFH/ flex work options,” Mr Paredes added.

Salary levels generally plateaued last year. This year, however, firms have brought their wallets out again and are paying higher than ever to attract talent. This is due to improved market conditions, which is leading to more work for the firms coupled with the continued low level of supply of quality talent.”

More firms are also now offering significant benefits, such as parental leave and flexible working, as well as various career progression programs.

“[Firms are offering] up to 30 weeks’ paid parental leave (with no lock-out in terms of how soon that can be taken), ‘fully flex’ working arrangements where lawyers are encouraged to have the autonomy to work from where they choose, international secondment offers and enhanced leave programs allowing the purchase of additional days of annual leave.

“Synonymous with what top talent looks for, firms are aware that if they want to secure those with the drive, ambition, and motivation to assist with business growth, then these lawyers will likely have one eye on personal growth and progression also,” Mr Weerasinghe said.

“Law firms should take a more pragmatic view of increasing headcount, embracing international hiring, looking at domestic candidates keen on making a step-up (from a mid-tier environment to a top-tier) and considering hybrid options such as long-term contracts with the prospect of a permanent role once the candidate is a proven entity.”

But despite added benefits, junior lawyers are still drawn to higher salaries and quicker recruitment processes, added Ms Naiman.

“Junior lawyers are still looking for top-of-market salary in an environment where they are not flogged and where they can be mentored and given work/life balance and/or flexibility of some sort. Fundamentals haven’t changed. Salaries are an important factor but so [are] flexibility, the work/life balance mix, social aspects of a firm, culture, [and] good high-end work,” she emphasised.

“I think finding the right talent at the right level at the right time and the right calibre is always going to be a tricky proposition in Australia. Some firms are better than others in terms of branding and staff benefits and, ultimately, in the way the market will engage with their brand.

“The best thing a firm can do to secure talent is to run an engaging and fast recruitment process where the candidate feels that recruiting the role in question is a priority for the partners rather than something far down on their list of priorities. What firms are doing badly is stretching out the recruitment process beyond what the candidate feels is reasonable, resulting in a negative interaction with the brand and turned-down offers.”

In addition to seeking salary and career development, the values of younger lawyers are changing – and Mr Stirling agreed that the branding and values of a firm will play a key part in attracting talent moving forward.

“Expectations are higher regarding flexibility, hybrid working, ESG and community focus, as well as diversity and inclusion. Legal employers need to go the extra mile in regard to their holistic offering across these areas as well as being competitive in regard to remuneration and career advancement,” he concluded.

Many firms and organisations are recognising the importance of time away from work by offering additional annual leave programs, extended parental leave and increased flexibility. Many recognise that their brand in the market as a good employer is critical when attracting the best talent.”