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The past financial year marked another extraordinary one for the legal industry with hiring across the market growing at levels unseen for a decade.
The past financial year marked another extraordinary one for the legal industry with hiring across the market growing at levels unseen for a decade.
Law firms of all sizes faced a ‘perfect storm’ of multiple pressure points, culminating in hiring difficulties and a retention crisis. In response to the ensuing war for talent, law firms increased salaries significantly.
Fears of the ‘Great Resignation’ manifested into the reality of the ‘Great Migration’.
With the borders now open, Australian lawyers were now free to leave Australia in search of an international posting. Exceptionally strong demand for Australian transactional lawyers was seen from law firms in London, New York and San Francisco. Unfortunately, however, continued border restrictions prevented inbound international lawyers filling the void.
As well as this one-way migration, law firms experienced multiple other pressure points on associate supply including a resurging in-house market and lawyers transitioning from mid-tier to top-tier.
Retention quickly became the major concern. Law firms responded to this competition for talent by increasing associate compensation significantly through salary adjustments and bonus payments
The annual report by Taylor Root, the global legal, risk and compliance search and recruitment specialists, reveals that some lawyers this saw their salaries increase by as much as 40% over the past 12 months.
Hayden Gordine, Head of Taylor Root Australia commented that as law firms and corporates emerged from the worst of the pandemic, demand for legal services continued to grow resulting in law firms seeking to hire large volumes of associates.
This was accompanied by a sizeable increase in associate pay including the introduction of a mid financial year salary review in January 2022, all of which was unprecedented in the Australian legal landscape.
With intense competition for talent, Gordine commented that offers that they were seeing were consistently above market rates, resulting in the overall market rate shifting significantly. He also commented that many candidates were now being offered sizeable sign-on bonuses, something that is less common in the Australian market.
The average salary for lawyers at top tier or international law firm with just one year experience is now$100,000. Experienced senior associates with 8-9 years’ experience are taking home $220,000 at a minimum.
Taylor Root warns that the challenge ahead for law firms will continue to be candidate supply, with compensation remaining a major component of a law firm’s strategy to recruit and retain associates. Unlike the UK and US markets, law firms here are unable to continue the war for talent by increasing salary alone.
For candidates, it is a world of opportunity. Australian lawyers have never been in higher demand - locally, internationally and in-house - in what is the tightest candidate market the Australian legal sector has witnessed to date.
The information contained in our salary and benefits report relates to the salaries and benefits of thousands of lawyers across Australia and the data is collected from offers we have secured for candidates.
We invite you to download the full report, complete with breakdowns of salaries for law firm lawyers across regions and years of experience, or for an in-depth discussion on any of the material in the report please contact one of our dedicated Law Firm consultants today.
