For at least twelve months now business leaders have been cautious, hence some corporates have had hiring freezes leading to contract roles, replacement roles and maternity leave roles making up the bulk of job opportunities both in-house and in private practice in all cities. This year has started with more confidence and some optimism, with global share markets off to a roaring start. Hopefully, that will lead to some M&A activity and more commercial activity in general, generating new jobs in all states.
In the in-house legal market in particular, the roles available are often dependent upon the location of head office for corporates. The number of regional headquarters (RHQs) of multinational corporations has traditionally been skewed towards Sydney. About one third of the RHQs in New South Wales are involved in the information and communications technology industry, where there has been lots of growth. Sydney is seen as more of a global city and it thus has a more transient population, which can lead to a greater turnover of roles. The market for in-house roles has recently been slightly stronger in Sydney than Melbourne, although post GFC it was the reverse.
Adelaide, Darwin, Hobart and Canberra are all affected by not having head offices for corporations. In-house roles in Brisbane and Perth have largely been in the energy & resources sector. The demand for lawyers and legal services has slowed with the cooling of the resources sector, due to lower commodity prices and weaker demand from Asia. Some global firms have even relocated their Energy & Resources practices from Melbourne to other global locations.
The ‘Big Four’ banks are split between Melbourne and Sydney: NAB and ANZ are in Melbourne and Westpac and Commonwealth Bank are in Sydney. All have been good employers of lawyers and providers of work to the legal sector, however, recent hiring freezes and a quiet housing market, combined with a focus on cost cutting by the banks, has meant slightly less activity on the legal front. Consolidation of in-house finance sector teams to Sydney, particularly in the funds management, wealth management and investment management areas, has meant that many roles that were traditionally available in Melbourne are fewer. Wealth teams tend to have estate planning lawyers in all states.
Post GFC there was also lots of restructuring and insolvency work, particularly for the banks and financial institutions. This has now slowed also. On a positive note, demand for employment and workplace relations lawyers has been strong across the whole of Australia, both in-house and in private practice, driven by redundancies and restructuring in corporate environments.
Melbourne and Brisbane have both been affected by cuts by state governments to the public sector and infrastructure spending. The difference is Queensland has been forced to spend money on infrastructure due to its floods crisis. Sydney seems to be slightly more buoyant than other cities on the infrastructure front as there is still some spending going on there. Infrastructure spending has also continued in Perth. Generally, the ailing construction sector continues to be battered by low building approval rates and a stagnant building market.
Many corporates are driving their cost-cutting by improving their procurement processes and outsourcing work. This often means implementing new IT systems and, accordingly, we have seen a demand for IT and outsourcing lawyers in Melbourne. All cities seem to have some demand for lawyers with commercial and IT/IP skills. If the demographer Bernard Salt is correct, in the future, Melbourne should expect to see future growth across the healthcare, education and IT sectors.