While recent years have seen the profession be a “candidate’s market”, resulting in inflated legal salaries and mid-level lawyers and senior associates in high demand, as hiring slows slightly in the market, so do potential raises and salary increases – as, according to Naiman Clarke Legal director Kristina Steele, firms are more likely to wait for the right person.

Speaking on a recent episode of the Lawyers Weekly Show, produced in partnership with Naiman Clarke, she analysed the salary review conversations she’s been having with candidates and the right and wrong reasons to go to market following those conversations.

“The information that we have seen regarding salaries has been very inconsistent and very broad. So, I suspect employers and lawyers are extremely confused as to what they can expect, what’s in line with the market in terms of roles generally,” Steele said.

“There are trends [that] I think couple well with what’s going on with the economy. For example, we aren’t seeing as many corporate law roles, less transactional roles coming through, although they do still exist, particularly in the larger firms. But I think our biggest trend at the moment is commercial litigation and or insolvency litigation.”

Despite this, there hasn’t been much concern among candidates, according to Steele.

“A candidate shortage in the legal industry in Australia [has] always been something I’ve noted since working in recruitment, but it’s particularly short at the moment. I don’t think that is indicative of people being afraid to move. I haven’t really had many conversations despite these potential economic issues that we are hearing about and envisioning will happen,” she said.

“But generally, people are coming to market fairly confidently. [But] we have seen some people going to market for the wrong reasons.”

While looking for a new job purely for a raise isn’t necessarily “wrong”, Steele emphasised that candidates should also have genuine reasons for moving.

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“We’ve seen people going to market purely for a salary increase, for example, which is fine. Sometimes, that is the main driver. You feel you’re not rewarded enough for your hard work, and that is absolutely fine. But if you are going to market purely to get a salary increase and/or to use that as a tool against your current employer to get a counteroffer, we need to balance out, you know, your genuine reasons for wanting to move. And should you get a counteroffer, are you going to then upset potential future employers?” she said.

“Now, that might not matter now when you have got a counteroffer, but you will, or you may find yourself going to market again in the future. And if you’ve been particularly popular across potential employers and had four or five interviews, and you’ve withdrawn from potential offers purely because you’ve got the counteroffer you want, reputationally, it doesn’t sit well across the market.”

This sentiment rings particularly true as the profession moves more towards an employer’s market.

“During COVID, from 2020, even through to 2022, it was very much a candidate-driven market. There were a lot of opportunities available, and candidates had a pick of the pick of the bunch and [were] often getting extremely high salary offers compared to what they were on, sign-on bonuses, [and] promises of flexibility,” Steele said.

“I have recently undertaken a market research project with some of my active, very close clients who kindly gave their answers about what they’re seeing as a firm in terms of growth, in terms of what they’re looking for, in terms of what they’re willing to negotiate on, what they’re not, when it comes to employing for a specific team or role. And the overwhelming response was that they are willing to wait for the right candidate. They’re not as willing to be flexible with experience, you know, not willing to look at a two PQE lawyer when they’re advertising for associate.

“They really are streamlined as to these are the roles we want to fill. This is the level we need to fill it at. These are our salary brackets, which we’re not often provided with, to be honest, nowadays. But it’s just getting a lot stricter in terms of what employers are looking for. And I don’t think it is as much of a candidate-driven market as it used to be, depending on the area we’re looking at.”

The fact that employers are willing to wait for the right candidate also means that candidates shouldn’t necessarily jump ship if they get a lower salary increase, which Steele predicted to be on the lower end.

“We’ve recently completed our salary guide for the new financial year. It took a lot of time and a lot of research because there’s such inconsistent information out there regarding salaries. So, it presents a challenge, I think, not only for candidates, but for employers as well [for] what’s fair, what’s affordable. So, I just encourage lawyers and employers, if you want to retain your staff. Yes, we are seeing a market where things are calming down. Salary increases were predicted to be 3 to 5 per cent. Some firms aren’t even offering that,” she said.

“So, I think employers need to be fair in their reviews, and if they want to retain good staff, then absolutely do your best because you will see lawyers going to market if they don’t get what they want. But in turn, the lawyers going to market need to be realistic. If you go to another firm, and if you do go to another firm, what are your prospects of progression from there? What’s next year going to look like if you do get a huge increase? It all just plays into going for the right reasons.”

The transcript of this podcast episode was slightly edited for publishing purposes. To listen to the full conversation with Kristina Steele, click below:

Lauren Croft

Lauren is a journalist at Lawyers Weekly and graduated with a Bachelor of Journalism from Macleay College. Prior to joining Lawyers Weekly, she worked as a trade journalist for media and travel industry publications and Travel Weekly. Originally born in England, Lauren enjoys trying new bars and restaurants, attending music festivals and travelling. She is also a keen snowboarder and pre-pandemic, spent a season living in a French ski resort.