Legal market is ‘definitely bullish’
According to new research, the post-pandemic marketplace is bringing “strong demand for lawyers and a scarce supply at the right levels”.
After 21 years in legal recruitment, including the global financial crisis, Elias Recruitment chief executive Jason Elias thought he “knew a thing or two” about the market.
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“I predicted, when COVID-19 hit, that there would be mass lay-offs and very few job requirements, and a deluge of quality candidates struggling to find work,” he wrote.
“Well, after a large serving of humble pie, I admit I was absolutely off-target.”
Mr Elias’ comments form part of the 2021 Australian Legal Industry HR Issues & Salary Survey Report, compiled by the Australasian Legal Practice Management Association. The survey was open in February and March of this year and received responses from 295 law firms (covering over 10,000 employed legal professionals) of varying sizes from all states and territories.
Steady employment and expected growth
The survey found that while growth in firms was lower during the age of coronavirus than was anticipated pre-pandemic, employment across the profession “remained steady”.
“Thirty-four per cent of responding law firms had increased staffing levels by the end of 2020, while 34 per cent maintained a consistent headcount. A further 32 per cent reduced their workforce over the course of 2020. Cuts were most prevalent amongst small and medium firms,” the report detailed.
“Positively, despite the uncertain operating conditions in 2020, law firms continue to provide secure employment with a majority of staff employed on a permanent full-time basis.”
Elsewhere, firms are “optimistic”, ALPMA’s report noted, about their growth prospects in 2021, with 59 per cent saying that they expect staffing levels at their firms to increase over the next 12 months. Such levels are the highest, the association said, since 2017.
“Recruitment of lawyers will remain strong, with 75 per cent of respondents expecting to hire for these positions in 2021. Law firms also expect to recruit for additional legal executives (39 per cent), secretarial support (52 per cent) and administrative positions (45 per cent), with the majority of positions to drive firm growth. Recruitment of executives will be predominantly for replacement,” the report said.
Reflecting on the findings, Mr Elias wrote that there has emerged “strong demand for lawyers, and a scarce supply at the right levels”.
“There is a large number of law graduates but very few quality lawyers on the market at the two-year post-qualification experience level. There are some movements of teams with firms merging or even ceasing operations, but the market is definitely candidate-short,” he posited.
Many lawyers are risk-averse by nature, he mused, and submitted that the idea of changing jobs in an uncertain economic climate has “reduced the natural churn” in the market.
There has also been a dramatic rise of counteroffers, he added.
“Busy employers who do not have time to recruit are throwing cash at disgruntled employees to stay put. Inevitably the financial incentive only last six to 12 months before many employees end up leaving the firm anyway,” he said.
“Many explain that once they have said they were going elsewhere, they were treated differently.”
Moreover, there have been a few surprises in the areas of demand, Mr Elias continued.
“NSW has experienced a rapid property boom, so property and banking and finance lawyers have been in demand with a 235 per cent and 223 per cent respective increase in jobs from Oct-Dec 2020 to Jan-March 2021. There were also large increases in corporate and M&A work (187 per cent), regulatory (450 per cent) and litigation (143 per cent),” he said.
“COVID-19 lockdowns are also partly responsible for the increase in demand for family lawyers, rising 400 per cent in one quarter. There was slightly less demand last quarter in financial services, insurance and in-house roles.”
Competing for top talent
In the “war for talent”, Mr Elias continued, firms of all stripes will be gunning for the best practitioners. In order to ensure they have an edge over their competitors, he suggested: “Don’t rely on generalist job boards. If you see a good CV, call the candidate that day and get them in ASAP. If you must have more than one interview, don’t spread them too far apart, as it just leaves the opportunity for another firm to compete.
“When you interview, while assessing applicants, also sell your opportunity – point out your employee value proposition. And be fair – pay market and don’t lowball candidates. You will get more from employees who feel valued and will tend to stay longer.”
Looking ahead, Mr Elias said that the market is “definitely bullish”.
“Short of some major third wave or unforeseen economic curve ball, FY22 will be a good year for the legal profession, with strong growth and demand for lawyers,” he wrote.
“Then again, my crystal ball last year was faulty.”