The findings also revealed notable disparities in how male and female respondents perceive their compensation. Among male respondents, 40 per cent believed their salary was above or well above average, while only 31 per cent of women felt the same way.

On the other hand, a higher percentage of women viewed their pay as below or far below average, with 22 per cent expressing this concern, while only 20 per cent of men felt the same way.

Phillip Hunter, Carlyle Kingswood Global’s Australian director (legal and governance, in-house), told Lawyers Weekly that he has “real empathy for those feeling the pressure” from the rising cost of living and the desire for their “salaries to keep pace” with these increasing expenses.

However, he pointed out that “it’s also important to acknowledge that it isn’t the role of law firms to stabilise the economy. Their responsibility is to operate sustainably, serve clients, and create opportunities – not to absorb every economic pressure on behalf of the workforce”.

“In-house teams, in particular, face a different set of constraints. They are cost centres, not revenue generators, and operate under far greater cost scrutiny. With the cost of doing business escalating over the past four years – wages, insurance, compliance, and energy costs among them – most in-house teams cannot compete with private practice salary levels, nor should they be expected to,” he said.

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What happens if lawyers continue to be unhappy with their pay?

As reported by Lawyers Weekly in mid-March, data from the Workplace Gender Equality Agency (WGEA) showed that 33 out of 62 law firms were compensating their lowest-paid employees below the national average salary of $75,000 – meaning that roughly half of the law firms fell below that benchmark.

This statistic refers specifically to the bottom quartile of these workplaces, or those earning within the lowest 25 per cent of their respective workforces.

Among the firms offering the least to their lowest earners were McInnes Wilson at just $42,000, Hunt & Hunt Lawyers at $57,000, Ligeti Services at $60,000, and Arnold Thomas & Becker at $62,000.

Alison Crowther, partner at empire group, cautioned that if the issue of pay dissatisfaction isn’t addressed, many lawyers will start exploring other opportunities, but she added they may not necessarily find better options elsewhere.

“I think the consequences of this issue will result in more lawyers looking for new roles, although interestingly, this salary correction is happening at all law firms, so it’s unlikely they will be finding firms elsewhere that will pay them significantly better salaries,” Crowther said.

“As recruitment professionals, we will be under pressure [to] counsel candidates on the market trends and encourage a conversation that explores all aspects of firm benefits. Firms, like any business, will address costs within the business to accommodate the balance. That could result in redundancies across areas of the firm or higher billable expectations.”

Daniel Stirling, director of the Australian division of G2 Legal, pointed out that while salary dissatisfaction is common across many law firms, the greater risk emerges when top performers realise they can secure high pay elsewhere.

“I think there is always a proportion of any firm or employer that are unhappy with their salary or feel undervalued. I think the seriousness of this issue then depends on how those people are valued in the wider market,” Stirling said.

“If your top performers can get more elsewhere, then you are likely to lose these people to competitors. So it’s always important to benchmark your salaries and ensure you are competitive.”

The integration of AI and legal tech is also accelerating structural changes within law firms – changes that are already beginning to affect remuneration models, according to Hunter.

“The traditional pyramid model – many juniors supporting a smaller number of seniors – is being compressed. Senior associates, empowered by AI, are handling what once required a team. This has flow-on effects not just for remuneration, but for the structure of the profession,” he said.

How can firms respond to these concerns?

Crowther highlighted that “flexibility and job satisfaction” are the two most influential factors in why lawyers choose to remain in their current roles.

Given these priorities, she noted that firms seeking to attract talent must be prepared to deliver on holistic benefits. However, she cautioned that such offerings should only be promoted if they are genuine and measurable.

“For firms seeking new staff, this is the opportunity to sell these types of benefits but only if they are tangible, employees keep score and will hold firms accountable for the benefits sold at the hiring stage,” she said.

Research from Robert Half last year revealed that employees would accept bonuses or revenue sharing (59 per cent), more flexibility with regards to working hours (59 per cent), and more holidays (58 per cent) as tight company budgets demand more creative solutions.

As such, more firms are offering employees benefits such as flexibility and value alignment, particularly as employee retention continues to be viewed as a “critical” strategic move for firms.

Stirling agreed that salary is no longer the sole or even the primary driver of job satisfaction, noting that firms should be careful not to focus exclusively on remuneration, as a range of other factors play an equally important role.

“Salary is always an important factor, especially with current cost-of-living pressures, but lawyers lend a lot of weight to issues such as flexibility, hybrid working, culture and career development and progression. So employers should certainly think holistically when considering how to retain their talent,” he said.

Kirsty McNay, managing partner of Burgess Paluch Legal Recruitment, echoed this sentiment, stating: “While salary is an important consideration in job satisfaction, lawyers are also increasingly seeking a better work/life balance, work flexibility, career development opportunities, and particularly crucial at the junior/mid-level, mentorship, and guidance from senior lawyers in their team.”

Doron Paluch, director at Burgess Paluch Legal Recruitment, added that many firms are responding to this shift by investing more in their top performers by “making efforts to allow more part-time work options”.

However, Hunter said the legal sector is not receiving enough recognition for the support and initiatives it is already providing to its lawyers.

“In my view, most firms are already doing a great deal. Salaries remain strong. Career progression frameworks are improving. Non-financial benefits – from hybrid flexibility to wellness programs, generous parental leave, mentoring, and secondments – are widely embedded,” he said.

“We must remember that the employment market, like the broader economy, is cyclical. If inflation persists, business costs keep rising, and global instability (think Red Sea, Taiwan, Ukraine, Trump) continues, job losses will follow. The balance of power will shift again – and we’ll see greater competition for roles.”