Less than a third of law firms expect to hand out pay rises in 2021
Law firms are warning that pay will remain largely flat in the legal sector and bonuses aren’t on the cards thanks to the pandemic-related recession.
Only 30% of legal firms expect to give employees pay rises this year – and those increases will largely be limited to $5,000 to $10,000, according to the latest salary survey from legal recruiting firm Robert Walters.
However, 40% of professionals in the legal sector said they expected pay rises this year, and 48% were open to changing jobs – a challenge for firms already battling low retention, according to a report by The Australian Financial Review.
Andrew Hanson, managing director at Robert Walters NSW, said retention would probably stay strong until at least July, which is the main salary and promotion review period at most law firms.
“There is a reluctance to move from a secure role to a new position, and lawyers will want to see how 2021 plays out before moving roles with confidence,” Hanson told AFR.
Hanson said that firms wanting to retain staff but unable to give pay hikes should offer greater flexibility and clear career progression plans.
“Remuneration and flexibility continue to be the most important factors for lawyers when considering whether to change roles,” he said.
Hanson told AFR that in 2021, large international firms would be hiring only for business-critical roles thanks to hiring freezes and redundancies spurred by the COVID-19 pandemic.
That would include both front- and back-end construction lawyers and technology experts, which Robert Walters predicted would be the most sought-after practice areas by both firms and in-house teams. Demand in those practice areas has outstripped supply for several years – a situation that is set to continue amid the high volume of infrastructure and technology projects launched in Australia over the past year, AFR reported.
Also in demand will be banking and finance lawyers with both transaction and regulatory experience, as private practices traditionally have only small teams in that practice area.
“This, coupled with limited supply of local talent, drives continuous demand across funds, and the big four banks in particular,” Hanson said.
Conversely, there has been a drop in demand for merger and acquisition lawyers due to a reduction in deals during the pandemic.
In terms of experience, senior associates were most in demand, according to AFR. They are in high demand by companies looking for in-house lawyers, as their level of experience translates well to internal roles that typically have less resourcing and support, Hanson told the publication. Senior associates are also in demand by private firms, which are dealing with retention problems at that experience level as staff jump at the prospect of lighter workloads in-house.
However, international border closures may improve the situation somewhat, as fewer lawyers are taking posts in the UK and US, where Australian lawyers are in high demand, AFR reported.