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Return to Oz

Return to Oz

Australian lawyers are leaving the tattered legal markets of the globe to return home. So what does the mass exodus mean for local law firms reeling in the benefits of a buyer's market - and is…

Australian lawyers are leaving the tattered legal markets of the globe to return home. So what does the mass exodus mean for local law firms reeling in the benefits of a buyer's market - and is there really no place like home? Angela Priestley reports

Families around Australia are silently rejoicing. The adult children of mums and dads are returning home from overseas, and they are not just back home for a short family visit. Australian professionals, particularly lawyers, are escaping the devastated markets of London, New York and other legal hotspots to re-establish their lives in Australia.

The exodus is a sharp twist on the "brain drain" of legal talent overseas that was once suffered by so many Australian law firms. In 2006, the Australian Department of Foreign Affairs and Trade estimated that there were somewhere between 800,000 and 900,000 Australians living overseas on a long-term basis, with the majority in the UK, Ireland and the US. Most of these expats were tertiary-educated, found the Committee for Economic Development of Australia at the same time, with many earning more than $200,000 a year.

Having so many professionals overseas left a burning hole in the talent market back home. It was a problem that inspired Prime Minister Kevin Rudd to tell an audience of Australian expats at the London School of Economics back in 2008 that, "I know it's great being here [in London] but we need you back home too: there's a lot of things to do, big challenges."

In 2009, Australians are returning home, but not necessarily in a bid to meet the big challenges that Rudd suggested.

According to the Australian Department of Immigration and Citizenship, about 2700 Australian left Britain each month in the second half of 2008. Earlier on in 2008, that figure was about 1750. Although figures have not yet been released, it's expected that the results for the first half of 2009 would be even greater still.

For many of these returnees, the move comes as a result of losing jobs overseas. Since January alone, more than 10,000 legal jobs have been lost in the US according to, and thousands more legal jobs have been lost in the UK. It's clear that securing, or even retaining, a legal career in the former legal hotspots of the world has become extremely difficult.

Australians, the first out?

After years of burgeoning opportunities globally, Australian lawyers are coming home. But for those returning due to redundancies overseas, was their expat status a factor in their firms determining who would go?

One lawyer, who asked not to be named, has returned to Australia after being made redundant from a prominent London firm this year. She says that although the number of lawyers made redundant at her firm included UK and international lawyers, she believes that being an Australian lawyer became a disadvantage when it came to determining just who would go.

The London-based law firms contacted by Lawyers Weekly last week all deny that nationality played a role in any of their redundancy rounds. An Allen & Overy spokesperson says that the criteria for selecting those at risk of redundancy canvassed a range of factors, including performance. "Nationality was not a factor," the spokesperson says. "A number of lawyers who left the firm as part of the restructuring exercise had, for a variety of personal reasons, elected for voluntary redundancy."

Clifford Chance was also adamant that being Australian never factored into the redundancy process. "In the UK, the firm went through a full collective consultation process that covered all of our London lawyers, with individuals at risk of redundancy identified through an objective set of criteria," a Clifford Chance spokesperson told Lawyers Weekly.

Meanwhile, Clifford Chance claims they still have a great number of Australian lawyers working exclusively across the firm. "These individuals continue to make an important contribution. Equally, Australia remains a key recruitment market for the firm and we do not expect that to change."

The exodus en masse

Still, there are plenty of Australian lawyers returning from overseas who are now spilling into an Australian recruitment market which is already well and truly saturated by lawyers who have lost their jobs locally.

According to legal recruiter Edward Andrew, the managing director of EA International, for lawyers returning from former hot legal markets such as London, New York, Moscow and Dubai, finding a job back home will be difficult. "We're talking about people who are coming back - not just from the UK Magic Circle, but even the Skaddens of the world - who are finding it incredibly difficult."

Andrew believes it's rare to find lawyers returning from overseas who have not lost their jobs. "If you're lucky enough to have retained your job in an overseas market, you would be rather foolish to give it up and try and find something else in Australia at the moment," he says. "It's a probability that you won't find what you're looking for back in this market."

The harsh reality is that these lawyers are returning home to a market already over-burdened by hundreds of redundancies, especially in the top-tier.

The benefits stream in

For law firms, the flight of Australian lawyers back home is placing a new twist on the recruitment market. For those that are hiring - which are few - it's a chance to recruit some top-level talent. At Henry Davis York, a mid-tier firm which has been in the process of hiring new lawyers, the return of Australian lawyers offers the opportunity to gain significant international experience.

HR Director Deborah Stonley says she is fielding applications from lawyers in, or returning from, the UK, US, Singapore and Moscow. "I think it's a terrific opportunity for areas of growth in the firm, and in areas where we want to build greater strength and expertise to be able to use this time to secure top quality candidates to the firm," she says.

Last November, Stonley made a trip to the UK for the purposes of a recruitment drive for HDY. Working out of a recruitment office in London she recalls frequent telephone calls from a lot of junior Australian and New Zealand lawyers who were starting to feel concerned about their roles in the UK.

Stonley says she was interviewing only senior lawyers who, at the time, weren't necessarily feeling vulnerable about their positions in London. "But since I've come home, and as the economic downturn has continued, where some of the candidates I was interviewing were interested in coming back in the next 12 months, they have actually brought their plans forward."

Bringing them home

Across the Tasman, New Zealand-based firm Bell Gully is also making the most of the mass return of New Zealand lawyers. The firm recently announced the appointment of 10 senior associates from Australia and Europe as New Zealanders decide it's time to return home. It's a welcome relief for the firm, which has witnessed the drain of so many New Zealand-trained lawyers to Australia, London and other global jurisdictions over the last few years.

Roger Partridge, Bell Gully chairman, says that most of the associates are returning alumni of the firm that he believes, to an extent, have returned because of the global recession. For Bell Gully, Partridge says it's "a once in a lifetime opportunity to recruit top quality returning lawyers who might otherwise have stayed in the UK or the northern hemisphere had global conditions not become so adverse".

"The vacuum cleaner hoovering up top-quality people has had its plug pulled," says Partridge. "We've had to work harder to get people back because they are coming back to a smaller market than the Australian firms are dealing with."

It's not just the ability to hire pure numbers that the firm can benefit from, but also valuable experience. "I think the big benefit is not so much that they are getting experience that they couldn't get in New Zealand, but that it's really concentrated experience," says Partridge. "There's really an opportunity to specialise in the United Kingdom which just doesn't exist in smaller markets."

Holding on for the future

Partridge does not believe that a return to the recruitment game being a "sellers' market," will occur anytime soon. "I think we will see the effect of [the global financial crisis] over several years and we may see a semi-permanent change to the overseas experience concept," he says. "It may be that New Zealanders and Australians go overseas for a short period - say six to 12 months - rather than four to five years or longer."

But Andrew doesn't agree that that will necessarily be the case for Australian lawyers. He questions why any partner internationally would be interested in taking on lawyers for shorter periods in the future. Meanwhile upcoming local tax changes in Australia could also persuade Australian lawyers to disappear internationally for longer periods once, and if, the market picks up again.

With lawyers working outside of Australia for between 90 days and two years soon having to pay taxes on their wages earned back in Australia, Australian lawyers moving overseas to low-tax jurisdictions may find staying much longer than two years a particularly appealing option. "If you went to Dubai for 12 months and you found out the government was going to tax you on 46 per cent of your earnings, I think you'd be more inclined to stay for two years," says Andrew.

Whether or not the global legal market returns to its same form as the boom days remains to be seen. But for some Australian lawyers, many of whom are returning home to find themselves out of work locally, the memory of global markets crumbling will surely remain well into the future. According to the anonymous lawyer mentioned above: "I have my whole life ahead of me here now, and I'm happy to stay."

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