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Most firms expect to increase headcount this year
Despite significant economic headwinds on the horizon, a majority of Australian law firms — big and small — intend to grow their staff numbers during 2023. Who firms are looking to hire, however, offers interesting insights into how legal businesses may be positioning for the future.
Jerome Doraisamy
The Australasian Legal Practice Management Association (ALPMA) has released its annual Australian Legal Industry HR Issues and Salary Survey, which provides an annual overview of salaries paid in law firms across the country. This year’s survey provides data for 9,785 staff employed across 307 legal offices in Australia.
According to the findings, confidence remains high about the employment market — despite difficult market conditions.
Three in five (60 per cent) of Australian law firms expect to increase staffing levels this year. This is a slight drop from last year’s figure of 64 per cent but still marks an uptick from growth confidence of 53 to 59 per cent between 2018 and 2020. Medium-large firms are the most bullish on their growth prospects, with 66 per cent anticipating an increase in numbers.
One in three (34 per cent) of firms project that their staff numbers will remain the same, and just 6 per cent are anticipating a decrease.
This is not to say, of course, that law firms of all sizes will actually be able to increase headcount.
Last year, less than half (44 per cent) were able to boost their numbers, compared to 64 per cent who predicted they would. In 2020, 53 per cent of firms projected growth, but just one in three (34 per cent) could do so.
Who firms are targeting
Demand is greatest for solicitors and lawyers, with four in five (78 per cent) of Australian law firms, across the board, seeking such professionals.
Despite a trend among bigger firms towards consultancy arms, just one in four firms (25 per cent) are planning to recruit consultants — which perhaps speaks to how firms may be viewing consultancy practices in the current economic climate, or simply reflects the trend towards consultancy not yet picking up steam.
At the partner level, 23 per cent of firms are likely to seek non-equity partners, and 15 per cent want more equity partners.
Interestingly, just over one in two (57 per cent) of firms are planning to recruit paralegals and law clerks this year — a trend consistent with 2022. This may indicate the market’s intention, conscious or otherwise, to lean more heavily on the burgeoning artificial intelligence space for certain operational duties, or a need for fee earners to continue bearing a greater burden of said duties amid ongoing uncertainty.
Supporting the former proposition, however, is the fact that there has been a fall in the number of law firms looking to recruit secretarial support roles (48 per cent, down from 52 per cent last year). Intent to recruit for other administrative roles sits at 39 per cent.
Reflections
Speaking to Lawyers Weekly about the findings, ALPMA president Stephen van Dorp considered that while the forecast market conditions that many economists are predicting may well be considered challenging, “there are various reasons why many law firms continue to have expectations of increasing staff levels into 2023, and the need to attract through, strong reward and recognition, are consistent with these pressures on talent”.
“In the small and medium law firm sector, firms with an industry specialisation and an effective marketing message within their target industry will continue to experience strong demand for their specialised legal services. In the medium and large sectors of the legal market, firms are somewhat insulated as a result of having a diverse range of corporate services that they offer to their clients,” he detailed.
“This diversity of commercial legal services ensures that, when the economic cycle appears to be slowing, there are areas of law within each firm — such as insolvency litigation, for example — that are forecasting an increase in demand and counterbalancing those legal practice areas within firms that may be forecasting a slowdown in demand.”
“It is this balanced commercial offering of legal services, combined with a greater focus on effective collaboration between law firms and their clients that will lead to greater demand for legal services and give firms the confidence to increase staff numbers into 2023 even in the face of the forecast challenging market conditions,” Mr van Dorp noted.
Jerome Doraisamy
Jerome Doraisamy is the editor of Lawyers Weekly. A former lawyer, he has worked at Momentum Media as a journalist on Lawyers Weekly since February 2018, and has served as editor since March 2022. He is also the host of all five shows under The Lawyers Weekly Podcast Network, and has overseen the brand's audio medium growth from 4,000 downloads per month to over 60,000 downloads per month, making The Lawyers Weekly Show the most popular industry-specific podcast in Australia. Jerome is also the author of The Wellness Doctrines book series, an admitted solicitor in NSW, and a board director of Minds Count.
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