“Across-the-board salary increases have been more modest than the previous year, with some firms reporting that their lawyers will get CPI increases rather than jumping to the next band,” said Shobana Richmond, group manager for Taylor Root.

“There are a couple of larger firms who have awarded quite generous uplifts across their practice areas, but these are firms that have historically not paid well in the last few years and have sought to address this imbalance this year.

“Such figures are not representative of what is happening in law firms right across the Australian market.”

The report found that less than half (45 per cent) of Australia’s lawyers can expect to receive a salary increase of 4 to 7 per cent, while 56 per cent can expect a bonus of between 1 and 10 per cent.

According to Ms Richmond, the results differ from the corresponding period last year, when most firms lifted salaries to retain existing talent and attract quality hires. Similarly, many firms reported weighty recruitment numbers, she said.

“The first half of 2016 has told a somewhat different story,” Ms Richmond said.

“Many firms who recruited heavily in 2015 have been bedding down their lateral recruitment from the previous year.

“Factors including China’s growth and economic prospects, Britain’s recent decision to leave the EU, the outcome of the Australian federal election and the US elections in November have all resulted in a more cautious M&A outlook from a number of major Australian and global firms.”

However, the report found some practice areas of the Australian legal sector are likely to experience growth in recruitment numbers.

Construction and projects lawyers are in high demand across Australia’s east coast due to high levels of state infrastructure spending, according to the report.

Furthermore, mid-level M&A and finance lawyers are “still rare commodities and should still attract interest from multiple firms,” the report said.