Once defined by a number of dominant top-tier firms, the Australian legal market is undergoing an ongoing shift, with mid-tier and large national firms on the rise and global presence driving a new tier of firms.
While the Australian legal market has historically been defined by the “big six” – the six largest firms by revenue and headcount – global mergers and ongoing client demands are shaking things up, with mid-tier firms moving up and former top-tier firms competing on a new, global playing field.
According to law.com, in terms of revenue in top-tier firms, HSF Kramer pulled in more than $1.05 million per lawyer in FY2023–24, with Ashurst closely following at $1.04 million. Following these firms, however, is a steep drop, with Corrs Chambers Westgarth bringing in $756,000 per lawyer, King & Wood Mallesons bringing in $667,000, and the rest of the top-tier firms bringing in below $500,000.
This comes after, earlier this year, the partnerships of Herbert Smith Freehills (HSF) and US-based firm Kramer Levin voted to merge, creating a firm with more than 2,700 lawyers and over US$2 billion in revenue and enabling HSF to become “the largest global law firm in Australia”.
This could be leading to a new definition of top-tier firms in Australia, with global law firms (global elites) priced out of certain work and more focused on multinational clients, and smaller or mid-market global firms, as well as top-tier national firms in a new top tier category, with former mid-tier firms “levelling up to compete with this group”, Julip Advisory founder Kim Wiegand said in a post on LinkedIn.
Wiegand predicted that there would be firms on a “global elite” level, a new “top eight” group of firms and then a third group of mid-tier firms; top 50 firms that “haven’t quite hit scale, service diversification or regional breadth” compared to the other groups of firms in Australia.
When asked if other BigLaw, top-tier firms in Australia are likely to follow in HSF Kramer’s footsteps to compete on a global scale, Wiegand said that for most firms, that kind of move is “neither viable nor suitable”.
“Not all top-tier Australian firms will go global, and nor should they. Some will pursue international mergers or alliances to capture cross-border mandates, while others will double down on being elite national or Asia-Pacific specialists. The market is now large enough for both models to thrive, provided each is executed with clarity and focus,” she said.
“Only a handful of firms have the scale, structure and international brand to expand meaningfully into the US as HSF Kramer has. That scale brings its own complexities around firm model, remuneration structures, strategic alignment and the ability to leverage the merged network to drive growth from Australia.”
Australian legal market consolidating and evolving
Thomson Reuters’ Australia State of the Legal Market 2025 report recently revealed that top-tier firms in Australia are being “outpaced” by competitors, with large law firms (more than 50 staff) seeing a 5.4 per cent demand for their services compared to just 1 per cent of top-tier firms.
The report also found that large law firms had expanded their headcounts by 4 per cent more than the “big eight” firms, with half of Australia’s top 10 firms by profits per equity partner (PPEP) now being large law firms outside of the “top-tier” category.
This evidence, Thomson Reuters’ AI and legal tech for Asia and emerging markets senior director, Catherine Roberts, said suggests that high revenue per lawyer is possible without global expansion, “provided certain strategic levers are effectively utilised”.
The “big eight” in the report are firms categorised by the legal tech provider as the largest firms by number of qualified fee earners, and Roberts said the strategy of driving more revenue from rates and “less drag from increasing headcount” meant the big eight were able to respond better to market instability.
“However, as the Australian legal market evolves, sustaining this level of revenue will require more than just tactical responses to volatility. Firms will need to generate sustainable demand growth, continue to refine their pricing strategies, and invest in operational innovation,” she said.
“While a global footprint can certainly enhance access to international clients and complex cross-border matters, local firms can still achieve high revenue per lawyer through agility, client-centricity, and operational discipline. The key is not necessarily global presence, but rather the ability to deliver superior client value and adapt quickly to changing market dynamics.”
However, being more strategic is something the executive chairman of Beaton Consulting + Research and author, George Beaton, said is likely to be common within an “elite” tier of firms, with an increasing proportion of those firms linked with top US firms.
But while PPEP will be “critical” for these firms to attract and retain top partner talent, Beaton emphasised that these firms also need to focus on employee experience, client satisfaction and net profit.
“Lawyers in private practice and their law firms focus excessively on metrics that are not helpful to their clients or themselves. This near-obsession is fuelled by the league tables that abound using metrics like RPL (revenue per lawyer), PPEP (profit per equity partner), PPP (profit per partner) and year-on-year growth,” he said.
“A proper strategic perspective focuses on what matters to the lawyers, their clients and the firm’s shareholders, i.e. equity partners. These stakeholders are the vital parts of the service profit chain (SPC), first published in a now-famous book in 1994 by Heskett and Sasser. The logic of the SPC goes like this: Happy, well-trained staff deliver service and value that lead to satisfied, happy clients who, in turn, willingly pay the fees asked by the firm.”
As such, firms don’t necessarily need to go global to grow in a strategic way.
Former lawyer and founder of GSJ Consulting Richard Smith said that as the legal market continues to consolidate, profit growth should be front of mind for firms, rather than expanding globally.
“The Australian legal market accounts for less than 2.5 per cent of the total global legal market. We are a very small fish in a very large pond. This is not to say Australian law firms should not be interested in relationship (existing and developing) with international law firms, but it shouldn’t be the cornerstone of their growth plans,” he said.
“What should be the focus of law firm management teams is not revenue or size, but sustainable, profitable growth. In this regard, we have already seen some consolidation of the Australian legal market, and we are highly likely to further consolidation as the effects and consequences of artificial intelligence work out.”
Global expansion, Thomson Geer chief executive partner Adrian Tembel told Lawyers Weekly, can also create potential issues for Australian firms, particularly around pricing and resourcing.
“US rates set the pace in global firms. That creates a pricing tension for their Australian colleagues. For global firms with material US exposure, competing in Australia on price is structurally hard. It’s a source of instability for some global firms with quality US operations when they face demand for legal services in Australia,” he said.
“Global platforms with large US components face a structural tension when they operate here: their internal pricing gravity pulls one way, while Australian mandate profiles pull another. That’s a difficult balance to sustain over time.”
Earlier this year, mid-tier firm Thomson Geer acquired the entirety of Ashurst’s Canberra office, including seven partners and more than 50 staff, as the top-tier firm shut down its operations and Commonwealth government practice in the state.
At the time, Ashurst’s head of region for Australia, Lea Constantine, said the move to decrease its Commonwealth panel work was a “consequence of a review of our strategic priorities” – and shortly after the acquisition announcement, the firm poached M&A partner Tony Damian from HSF. Damian spent 29 years at HSF and reportedly made the move to Ashurst for a salary package of approximately $7.5 million.
Will other top-tier firms go global to compete with ‘global elite’ firms?
For HSF Kramer, navigating a growing demand for international advice and cross-border legal expertise and providing an integrated client experience on an international scale means that a merger gives the firm the ability to rapidly grow its international offerings.
HSF Kramer Australia and Asia executive partner Kristin Stammer said that additionally, the firm has seen Australian super funds and asset managers “assessing the market and looking at future growth opportunities in the US”, making global expansion a necessary move.
“Many of our Australia-headquartered clients operate in the US or have growth ambitions, and we are seeing increased need for legal support in areas including transactions, litigation, arbitration, bankruptcy and restructuring. Our recent expansion into the US gives us the platform to meet this need and rapidly grow our capability. Client interest has exceeded expectations,” she said.
“At the same time, we remain acutely focused on the Australia market, and ensuring our clients continue to receive strategic, commercially focused advice. We deeply understand our clients’ businesses and the sectors in which they operate, and can also share international trends that are relevant for our clients – whether that is across energy, digital infrastructure, private capital, tech or other areas.”
As to whether other top tiers in Australia will make similar moves, achieving the same level of performance as HSF Kramer’s revenue per lawyer (RPL) numbers typically means that firms need access to large-scale, cross-border mandates in high-value sectors where “global reach is a differentiator”, according to Wiegand.
“Without meaningful international presence, it will become increasingly difficult to match the RPL growth of the global elite. Few large firms today are purely domestic. Even national firms promote an international offering or network alliance. For truly global firms, strategy centres on cross-border client alignment and multinational organisations that can be served seamlessly across jurisdictions,” she said.
“So yes, global reach is an increasing differentiator at the top end. Clients with international exposure will favour firms that offer it; for them, cost and value may matter less than breadth and capability. In an increasingly global and complex regulatory environment, multinational organisations are turning to global firms to de-risk activities, investments, and operations across borders.
“Sophisticated clients, however, are deliberate about who they use for what. Many panels now combine global and domestic firms, and increasingly, clients follow trusted individuals rather than firm brands, even opening panels to retain specific partners after lateral moves. Client demand is overcoming restraints in some cases.”
More to come.
Lauren is the commercial content writer within Momentum Media’s professional services suite, including Lawyers Weekly, Accountants Daily and HR Leader, focusing primarily on commercial and client content, features and ebooks. Prior to joining Lawyers Weekly, she worked as a trade journalist for media and travel industry publications. Born in England, Lauren enjoys trying new bars and restaurants, attending music festivals and travelling.
