Recruitment

• The employment market remains tight. Hiring continues but the focus has shifted to retention, engagement, and utilisation.
• While many firms continue to be busy, some slowdown in transactional activity has resulted in the resizing of some practice groups.
• Recruitment at the sought-after 3–8 years level remains competitive.
• The impact of lawyers leaving Australian shores for the overseas law firm experience remains. Lawyers who left Australia in 2021 and 2022 remain overseas, leaving gaps in practice areas for this cohort.
• Firms have active watching briefs for high-calibre lawyers but are being more selective in their approach to hiring: recruitment must be backed by a solid business case.
• Law firms have reduced the hiring of contractors and have focussed on the hiring of permanent employees.
• Areas of demand include energy and resources (particularly renewables), construction and infrastructure, employment, insolvency and restructuring, litigation and dispute resolution (particularly class actions), and insurance.
• Despite attractive offers to make a move, lawyers want to work for a law firm whose values align with their own.

Retention

• Firms continue to offer creative rewards and benefits to retain valued employees.
• Salary increases and bonuses are an even more critical tool in the retention of lawyers given rising inflation.
• The hybrid working week is entrenched in most firms.
• Some firms are investing in their “office customer experience” to entice more staff back to the office and as a means of retention.
• Earlier promotions to Associate and Senior Associate are still being made to retain staff.
• The balance of power in the employment relationship is slowly shifting back toward employers, but for now remains tipped in favour of employees.
• Work/life balance and flexibility are essential to retain staff: these have become non-negotiable, particularly with more junior lawyers.
• Firms continue to promote and offer flexibility to retain an increasingly diverse workforce, for example, gender neutral parental leave.

Remuneration

• Salary increases have returned to the more conservative levels of the past, despite increasing cost of living pressures and higher inflation.
• Many lawyers received reviews less than CPI, in the order of 4-5.5%. Bonuses are being used to reward strong performers.
• Junior and mid level lawyers generally received generous reviews of up to 10% as they moved up and within salary bands.
• Bonuses were paid to top performers. Bonuses ranged from 8% to 20% of base remuneration.
• Mid sized firms awarded higher salary increases while the larger firms relied upon bonuses to reward their lawyers.
  

Trends

• Law firms continue to hire quality lawyers at the 3-8 years level to fill gaps.
• With leaner budgets for staff, law firms are moving away from hiring contractors. Their focus is  on hiring and utilising permanent employees.
• Billable targets and recorded work hours will increase at some law firms. Strict requirements for timely submission of timesheets will determine eligibility for bonus/rewards plans.
• Drivers for lawyers and senior associates are competitive remuneration, quality work, work/life balance, flexibility, culture, diversity, and learning and development opportunities.
• There will be redundancies in underperforming practice areas.
• Non-fee earner positions in some firms have been made redundant, more are anticipated.
• As fewer lawyers seek to work overseas, retention rates within firms will somewhat improve. However, there is still a ‘brain drain’ as private practice lawyers opt to work in corporate, not-for-profits, government, and NGO’s.
• There are the beginnings of generational tension in the legal profession as Gen Z lawyers come through. These lawyers have very different expectations of their career and employer and often see their career path as non-linear (at odds with the linear progression structure of law firms).
• Most lawyers are now working on hybrid working models with a minimum number of days in the office (in Sydney and Melbourne, particularly). This is not always the situation in other major cities where there has been a greater shift back to the office.
• Hybrid working week arrangements may come under pressure if the market contracts and firms seek to ensure that staff are more visible, and productivity is closely measured. 

   

• Jobs growth will slow.
• Restructures will continue throughout the first and second quarter of the 2023-2024 financial year.
• Restructures will create new opportunities for lawyers at General Counsel level including Divisional General Counsel.
• Cost-cutting measures within companies will increase workloads for in-house teams as they will have to do more with less.
• Corporate salaries are becoming more homogeneous between the various Australian states in the larger companies where teams straddle multiple capital cities.
• While lawyers generally continue to work on a hybrid basis, there is a stronger push to get lawyers back into the office (particularly in industries such as property).
• Fully remote working roles are now on the decline.
• Travel for work-related purposes has now returned.
• Meetings by Teams and Zoom are here to stay. In person meetings have reduced dramatically and digital meetings are now the norm.
• More lawyers are opting to leave secure roles to take 6-12 month career breaks to recharge, reflect and refresh.