Tough luck for juniors: Mid-tiers boosting partners and cutting lower level staff

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Mid-tier firms are increasingly choosing to boost the numbers of their partners and senior associates and cut down the number of junior lawyers and admin staff.

These results appeared in the June quarter edition of the Commonwealth Bank of Australia’s (CBA) Legal Market Pulse report, which was completed in association with Beaton Research + Consulting.

CBA’s national manager of professional services Marc Totaro told Australasian Lawyer that this trend relates to the cost pressures being felt by the firms in the middle of the market.

One of the biggest costs comes from staffing, he says, and if firms can outsource the more straight-forward work that is usually done by junior lawyers, they can make significant savings.

But interestingly, the mid-tiers’ larger counterparts are lagging behind this trend and experiencing the reverse.

“While partner numbers are due to increase, mainly by the mid-tier firms, the larger tier firms are still looking to decrease that number,” Totaro says. “Over the last year we’ve probably seen a reduction of 5% in terms of partner numbers [for top tiers].”

This relates to the ongoing revenue pressures that are felt across the industry - revealed as the number one concern of all law firms by the research.

The mid-tier respondents may seem generally more positive in terms of partner numbers and opportunities presented because they are not as impacted by big international firms coming into Australia, says Totaro.

“They are more comfortable and can compete more and more against top tiers going forward,” he says.

But it’s not all bad news for those at the top: The research also shows that looking ahead, top tiers are far more positive about M&A and IPO work, and those firms in particular most strongly believe that the economy will perform positively over the next 12 months.

But it can’t be denied that the results don’t pose such great news for junior lawyers, especially during a time when there is a growing trend towards too many law graduates and not enough jobs.

“There is definitely pressure across the profession as more and more jobs are off-shored, and this will put more pressure on the junior roles,” says Totaro. “Particularly in legal and accounting there is a concern about the numbers of graduates entering these courses compared to the intake going into firms.”