Each year Taylor Root write of the disparity between the short supply of lawyers and the ever- increasing demand for their services. In that respect, this year is no different; the talent shortage facing Australian firms is as acute as ever.
What is different, though, is how widespread that skills shortage has become. The last few years has seen a relentless demand for banking, corporate and projects lawyers. This year, the Royal Commission into the Financial Services industry has created a voracious appetite amongst law firms of varying shapes and sizes for litigators and financial services advisory lawyers. Following closely behind is a resurgence in needs across employment, competition and IP.
Globally, there is still huge demand for transactional lawyers. A momentary pause in recruitment drives amongst UK law firms post the mid-2016 Brexit referendum, soon gave way to a resurgence in transactional activity and a “business as usual” mentality as it became evident that the finer points of Brexit were not going to be hammered out any time soon. This has continued to deplete stocks of Australian mid-level lawyers seeking greener pastures in London and indeed other locations.
Whilst we hoped for an exodus of returning Australian lawyers back to our capital cities, it became evident over 2017 that Australian lawyers working in London were being well looked after – continuing to enjoy high quality work and responsibility and excellent earning power.
In other words, the shortage of mid-level and senior associate Australian lawyers across numerous practice areas continues.
As corporates continue to review their legal expenditure and endeavour to keep as much of their legal work in-house as possible, in-house legal teams have continued to grow solidly.
We have seen extremely competitive offers from them to attract mid-level and senior transactional lawyers from private practice. This, combined with often better working hours, continues to make in-house a very attractive option for private practice lawyers.
We have seen some international firms and even boutiques offering salaries that are exceptionally high – as much as 30% above their competitors.
What does this mean for salaries in the 2018/19 financial year? That seems to depend on several things: which firm you work at, what practice area you work in, how profitable your firm is, whether you are a lateral hire or have come up through the ranks within your current employer, whether your firm has a bonus scheme and what other benefits may be on offer. In the last 12 months, we have seen a flurry of record breaking offers for lateral hires from in-demand practice areas, particularly where firms are competing for a candidate.
Law firms are increasingly trying to find other ways to attract, retain and reward quality lawyers. Over the last year, we have seen far more examples of law firms of all sizes adopting agile and flexible working practices. Flexible work has historically been the domain of experienced female lawyers with parenting responsibilities, but this is shifting. Junior lawyers, both male and female, are increasingly reporting that they are more able to work from home or work more flexibly around their extra-curricular commitments at the encouragement of their supervising partners. This is a positive shift as junior lawyers have previously reported that they are not always comfortable to request flexible working (even if the firm has a policy in place), often citing cultures of presenteeism within their firms and the perception that they may be overlooked for the best work if they are not physically in the office.
We have also seen more lateral hires at all levels be more proactive in putting part-time or flexible working requests on the table when they are negotiating offers and firms enthusiastically marketing their flexible working policies to attract lawyers.
Generous paid maternity as well as paternity leave schemes have become a recent talking point for law firms. They can be another way in which law firms, particularly the international firms, seek to distinguish themselves from their competitors.