27 Apr Private Practice Update – The eye of the storm
We’ve reached that time of the year again when, from their own perspectives, lawyers and law firms start to hold their breath, cross their fingers and start treading water in anticipation of the annual announcement of pay rises. For the last few years it’s been clear, even against the backdrop of the pandemic, that lawyers are in demand and working hard. It’s been equally clear that law firms have weathered the storm well and many have made bumper profits. So it’s normal to see a level of friction build between expectation and commercial reality around May of each year.
So, if this happens every year at this time, why does it feel so different this year? Why have we had so many more direct enquiries from candidates seeking granular advice tailored directly to them whilst our clients are beyond hungry for any morsel of insight into what their key competitors are planning?
The answer is that this year has been different. This year has seen the previously semi-polite war for talent break new ground and become far less polite. This year has seen the war for talent being waged on new fronts as firms, already struggling to dislodge local talent to boost their local ranks, are also being actively besieged by overseas firms luring Australian lawyers away in ever increasing numbers. The Australian recruitment market was tight enough when our lawyers had their wings clipped by COVID. Now they’re free to go anywhere, to markets just as desperate as our own but with infinitely deeper pockets, and they’re leaving in their droves.
We’ve seen salaries in the last year reach heights we would have laughed at three years’ ago and it’s clear that everybody knows their market value has shifted significantly. Transactional lawyers have overseas’ firms calling them at their desks (firms, not just agencies). Everyone has a mate or three who moved down the road and picked up 30k more. Almost every offer we receive is higher than we’ve prepared our candidates to expect (a personal favourite).
So, this last quarter of the year is very much the eye of a storm that’s been building for several years. It’ll be calm for a month or two but from 1 July this year you’ll have to choose whether to stay under the barn or get back in your truck.