Across the country, a shortage of lawyers, particularly within the corporate, banking and construction practice areas has been the major source of frustration for law firms since our last report. The shortage of lawyers, particularly in these areas, has seen firms commonly compete with one another – which again, is a frustration for them.
What this has meant is that law firms are trying new ways to attract, retain and reward quality lawyers. As we have previously reported, we have seen more examples of law firms of all sizes adopting agile and flexible working practices. Flexible working in Australia has historically been seen as the domain of experienced female lawyers with parenting responsibilities, but this is no longer the case.
Junior lawyers, both male and female, are increasingly able to work from home or work more flexibly around their extra-curricular commitments at the encouragement of their supervising partners. In some firms, they are also encouraging their staff to dress-down throughout the week. The hope is that this will change the culture and provide lawyers (particularly at the junior end) to balance their lifestyle with their profession.
From a salary perspective, lawyers in Australia have generally seen their salaries impacted by three main factors over the past 12-18 months.
The first is the impact of the US law firms entering Australia. First such as Jones Day, and more recently White & Case, have brought with them an increased salary banding for their Associates. Whilst the offices of US firms in Australia do not pay on the Cravath scale, salaries within their Australian offices are commonly the highest within the country. This is starting to have a flow on effect to the traditional top-tier Australian firms, as they seek to retain their own lawyers, but to also attract talent to their offices across the country.
Second, lawyers have been fortunate to have multiple options to choose from when considering their options. The vast majority of recruitment within law firms is taking place around 3-6PQE. That’s not surprising, given this is usually when a lawyer is getting to the Senior Associate mark, and deciding which way they should take their career. Of course, in-house positions are also increasingly available at this level of experience – a factor that commonly impacts on retention levels for law firms. With the increased level of positions available, lawyers will typically have a wide selection of choice and the end result being multiple offers to choose from. Law firms know this and are responding by offering higher salaries to entice lawyers to them over their competition.
Finally, the demand for Australian lawyers overseas has seen firms increasing their salaries in order to retain talent. Australian lawyers are fortunate enough to have options across many different jurisdictions. It was almost a rite of passage for Australian lawyers to want to gain experience in London in years gone by, and whilst that certainly hasn’t changed, many are now finding new places outside of Australia and the UK to call home. Singapore, Hong Kong, Dubai, Cayman and the BVI are increasingly looking for Australian lawyers to join them. With more options outside of Australia, law firms (typically the top-tier) are reacting by ensuring their lawyers are paid well and also making strides in provided them with clearer career progression.
We invite you to download the complete Taylor Root Australia Private Practice Salary Report & Market Update for 2019-2020 by clicking on the link below, or for an in-depth discussion on any of the material in the report please contact one of our consultants today.