The recruiter finds that legal employers are likely to beef up the salaries of lawyers over the next twelve months as competition between law firms and banks heats up, and employers attempt to offset the diminished bonuses and salary freezes of the last couple of years.

Such increases could see lawyers across all sectors and experience levels add up to $10,000 to their annual pay packets.

"Pending any significant downturn in the global and local economy, we anticipate a buoyant year for legal recruitment in 2011," said James Nicholson, managing director at Robert Walters. "We expect the financial services industry to lead the hiring activity in early 2011, as financial institutions and investment banks pay annual bonuses and plan team structures."

Nicholson added that the selective hiring by legal employees over the last couple of years meant that the only candidates able to reach the interview stage have been those with the extensive market experience, technical skills and strong academic credentials. This is a trend that may change in 2011 as the war for talent picks up.

The Robert Walters research also predicts that the entry of prominent international law firms into the Australian market will further assist growth opportunities in the region, especially as they seek to hire more partners and build their teams.

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While the Robert Walters survey found that employers continued to give preference to local experience over a stream of returning expats and candidates from the UK through the first half of 2010, in 2011 the recruiter predicts that a number of law firms will start to consider overseas recruitment campaigns with a focus on senior appointments.