An interesting finding that emerged in a major market sentiments and recruitment survey is a trend towards big overseas firms “waking up” and coming here to try and snaffle up our lawyers.
The Mahlab Report 2014 has revealed a series of trends for the years ahead, and encouragingly the studies of both private practice and in-house legal counsels indicate the legal market is beginning to recover from the fallout of the GFC.
Main trends include a loosening up of bonuses, a trend towards performance based remuneration across all levels of seniority, more partner scrutiny and a growth of in-house legal departments.
But Katherine Sampson, the managing director of Mahlab’s Melbourne office, told Australasian Lawyer
that a particularly interesting finding was that overseas firms are increasingly wanting to recruit Australian lawyers.
“Once you get a big market like London waking up, the competition between lawyers rises, and law firms in Australia will have to compete to defend their staff,” she says.
The potential consequences of this could be an increase in “sign on” bonuses here, and greater pressure for Australian firms to increase salary levels.
“A lot of the recruiting firms in London tend to be the really big firms and recruit from the big firms in Australia. I think what happens is that if your senior associate in banking and finance comes to you and says ‘I’ve been offered such and such an amount’ it becomes incumbent to the current employer to say we’ll match that or have a pay review,” Sampson says. “Competition tends to put pressure on salaries.”
This would likely lead to an upward trend in salary levels across Australia, she says.
In terms of current salary conditions, the Mahlab report reveals that since last year salaries have remained flat in private practice, while corporate lawyers have enjoyed a slight increase.
Almost 50% of the corporate lawyers surveyed had received a bonus this year, in contrast with a low 12% of those in private practice.
And on the whole, corporate lawyers were also more satisfied with their salary review than their private practice counterparts.
However seemingly in contrast to the salary results, it was revealed that private practice lawyers were actually more satisfied in their current role, felt more secure and were more satisfied with career progression opportunities than corporate lawyers.
“I guess that says it’s not all about money,” says Sampson. “I think because we’ve seen some big corporates go bust or really contract through the GFC and beyond, the in-house counsel feel less confident, but they shouldn’t be. They’ve probably seen big changes in the market that affects their company, whereas in fact I think they are quite secure [in their role].”
The results of salaries by region in the report doesn’t hold many surprises: Sydney is still leading the pack, but Melbourne and Perth are hot on the heels and fast closing the gap.
Sampson says rising living costs across all of these regions means that moving interstate to get a big salary top-up is no longer the quick fix it used to be.
This in turn could also provide lawyers with an even greater incentive to give in to the approaches of overseas competitors.
“The Australian legal market has improved but so too have international markets,” Sampson warns. “They pose a new threat to major firms, whose banking and finance and corporate lawyers in particular are in high demand offshore.”