Among the lessons from 2025 is the realisation that employers must adopt new approaches to legal recruitment moving forward.
In-house takeaways
In 2025, Axiom Australian country head and managing director Jacob Flax reflected, what became clear is that in-house legal recruitment “needs a fundamental rethink”.
“The traditional model assumes every capacity gap requires a permanent hire, but that’s breaking down under budget constraints, talent shortages for specialised skills, and unpredictable workloads,” he said.
LOD director of people and development Sofia Khan said: “Flexible legal resourcing has firmly become mainstream as organisations seek cost-effective solutions, over traditional headcount.”
G2 Legal Australian director Daniel Stirling noted there have been “dramatic shifts” in the in-house market, with a steady first half of 2025, while the back end of the year was “incredibly busy”.
So much so, he said, that the end of 2025 and start of 2026 have shown “higher volumes than we have seen in a number of years”.
“This has been across various sectors, including financial services, tech, energy, infrastructure, and FMCG. We have also seen a good spread of roles at different levels of seniority,” he said.
Khan said that 2025 brought significant cost pressures for many corporates, leading to restructures and an influx of highly experienced GC/partner-level lawyers back on the market.
“Increased talent availability, coupled with slower internal decision-making cycles, pushed firms and in-house teams towards more targeted hiring, rather than broad expansion. Demand for ‘unicorn’ mid-level lawyers (3–8 years PQE) remained strong, alongside renewed interest in senior lawyers with deep subject matter expertise. Steady client activity enabled us to enter 2026 in a strong position, with a high number of new recruits commencing in January, traditionally a quieter month,” she said.
Flax said the legal departments that will successfully navigate 2026 are those that treat resourcing “like a portfolio”.
“They have permanent lawyers for core work, preferred law firms for ‘bet the company’ matters, and they’re bringing in flexible legal talent – experienced lawyers on secondment or project basis – to handle surges and access niche expertise before committing to permanent headcount. Looking at 2026, I think this portfolio approach will shift from innovative to standard practice,” he said.
“The GCs and legal ops leaders who’ll thrive are those who understand when permanent headcount is right and when high-quality flexible talent makes more sense.”
Reflections on private practice
As nrol director Jesse Shah put it, “2025 was a tough year” across the Australian legal recruitment market.
“A lot of firms felt the pressure, softer demand in certain areas, hesitation around lateral hiring, and a real shift away from ‘growth for growth’s sake’,” he said.
“What it showed very clearly,” Shah mused, is that the market has become “far more deliberate”.
“Firms aren’t hiring in volume anymore; they’re hiring for impact,” he said.
The practices that held up best, he said, were those tied to regulation, disputes, employment, restructuring and specialist advisory work, while transactional hiring was “far more patchy”.
Looking ahead to the rest of 2026, Shah continued, “I think the opportunity sits in high-value niche mandates, continued in-house expansion in regulated sectors, and firms becoming sharper about the kind of talent they bring in”.
Burgess Paluch director Doron Paluch offered similar sentiments, noting that last year, law firms generally struggled to fill roles for lawyers with over two years’ PQE.
But, he added, the market did go through several ebbs and flows.
“Those firms that acted quickly on receiving CVs and through the recruitment process were often the ones who were able to fill crucial roles. Despite many firms ending 2025 cautiously, 2026 already looks like being a very candidate-short market,” he said.
“We’ve been generating interviews in January at major firms which don’t even have approved specific roles. That’s always a good sign.”
Paluch opined that 2026 will see more vacancies in areas like cyber risk, and IT, and the need for commercial litigators (associate and SA levels) remains strong, as does the need for insurance, property, construction, and family lawyers (with the workload increasing by 50 per cent for some practices).
AI-inspired shifts
The mainstreaming of artificial intelligence across the legal services marketplace has also had ripple effects on recruitment in law.
We have seen, Stirling said, emerging opportunities relating to the growth of AI in several ways, in addition to its use within legal departments.
This includes, he said, “new roles being created within industries supporting this growth directly or with organisations looking to increase their legal team’s capability in data and AI governance as the profession evolves and becomes a key strategic business priority”.
Khan supported this, noting that in-house teams are increasingly prioritising AI, “and we expect clients to continue seeking lawyers who can implement AI solutions to lift productivity”.
To this end, she said, she anticipates demand across corporate, commercial, M&A, employment, construction, energy, banking and finance, IT, privacy, consumer and regulatory, property, and paralegal/newly qualified lawyers.
One thing, however, is clear, Paluch said: while AI will continue to shape the market, even if no one really knows exactly where it is yet going, recruitment is a discipline “that can never be replaced by AI – the human touch is too big a point of strategic advantage”.
Role of recruiters
With all of this in mind, recruiters across the board have a clear sense of what is required of them and how best to navigate talent shortages and candidate and employer needs, in the coming year and beyond.
In markets like this, Paluch proclaimed, the only successful recruiters are those with long-established candidate relationships, networks, and databases.
“Basic job advertising usually doesn’t produce results. Candidates are increasingly selective, and to gain any strategic edge at all law firms, need to utilise recruiters who have influence. Internal HR/recruitment staff generally can’t act as a substitute,” he said.
Shah agreed, noting that recruitment providers who succeed “will be those who act as true strategic partners, with deep market knowledge, trusted networks, and a long-term approach, not transactional CV sending”.
Stirling offered similar sentiments, noting that building strong relationships with clients and candidates “will continue to be beneficial in the legal recruitment market in 2026, and will allow recruitment providers to effectively match the best talent with the right employers, taking account of both technical skills and cultural fit”.
And – given Khan’s and Flax’s proclamations about the rise of flexible resourcing – the former said the providers that will thrive this year are “those offering blended solutions, high-quality talent, strong market insight, and speed”.
Jerome Doraisamy is the managing editor of professional services (including Lawyers Weekly, HR Leader, Accountants Daily, and Accounting Times). He is also the author of The Wellness Doctrines book series, an admitted solicitor in New South Wales, and a board director of the Minds Count Foundation.
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