Legal likely to be among the last to see redundancies in tech
Amid a handful of large-scale redundancies in some of the world’s largest tech companies, in-house recruiters reflect on the extent to which in-house lawyers in tech firms are facing lay-offs here in Australia — if at all.
In what has been labelled the “tech wreck” by mainstream media outlets, some of the biggest technology companies around the world, including Google, Meta and Amazon, have made wholesale redundancies, with reports of tens of thousands of tech workers having been laid off since the start of 2023.
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However, G2 Legal Australian director Daniel Stirling said that evidence suggests that Australia-based in-house lawyers working in tech companies may not suffer the same fate as those in other departments and/or those in other jurisdictions.
At this stage, he told Lawyers Weekly, “we have not seen evidence of wholesale redundancies” for lawyers in the tech sector in Australia.
There are a handful of reasons for this, he outlined, including that the aforementioned global behemoths “tend to have relatively small onshore teams in Australia and other overseas jurisdictions which have local transactions, with very large, multi-disciplined teams in the US (or wherever their HQ is based)”.
So, he deduced, “the impact here in Australia tends to be less pronounced”.
Carlyle Kingswood Global director (in-house, legal and governance) Phillip Hunter supported this, telling Lawyers Weekly that he hasn’t seen any tech companies in Australia shedding staff at this juncture, even with the mass lay-offs being witnessed in the United States.
“We believe the most likely reason Australia won’t see the same staff shedding is due to the size of the teams in Australian IT/tech organisations,” Mr Hunter outlined.
“We have never seen over-staffed legal departments.”
“In contrast, teams in Australia could do with additional staff to help reduce the stress placed upon in-house lawyers,” he noted.
Mr Stirling agreed. While there are some locally based tech companies that have recently made redundancies, he pointed out, such as Atlassian and Xero, such Australian outfits “tend to have much smaller teams, which are generally spread globally with a heavy US presence”.
“So, if legal do become affected, the impact in this region will again be minimised,” he said.
In Mr Stirling’s experience of recruiting in the Australian in-house sector over the last 15 years, he recalled, “legal tends to be one of the last departments to experience redundancies” — even in extreme cases such as the global financial crisis (GFC) and COVID-19, he submitted.
“This is because in-house teams are generally lean, and headcount has to be strongly justified in the first place,” he explained.
“In addition, legal workloads stay high in these periods, even if the nature of the work may switch to more contentious matters such as disputes or restructures.”
Instead of being concerned about their job security, Mr Hunter said, it may indeed be an optimal time in the market to be an IT/tech lawyer — at least based on what he is seeing and hearing from clients.
“There has been no better time to be an IT/tech lawyer in the Australian market, with no lay-offs occurring or planned,” he mused.
“There are a number of roles active in the Australian legal recruitment market, of which CKG [is] recruiting four at high-profile companies.”