Australian Legal Services

Australian Legal Sector Update | Elias Recruitment

The demand for legal services fluctuates based on the overall economic conditions and changes in Federal government and consequently government policy. However, despite a Federal election, interest rate rises, unparalleled inflation, overseas layoffs and risks from the geo-political landscape, most lawyers had a busy year and many reported record revenue. 2022 was a very successful year for the Australian legal profession. 

Most areas of law were busy especially transactional areas such as corporate, M&A. Property and construction were still busy but softened slightly with the effects of interest rate rises. Areas such as litigation and employment were busy. Family law and wills and estates were also busy. There was also a growth in in-house roles especially among smaller companies that may not have had in-house counsel previously. There was also an appeal amongst certain lawyers to work in the start-up space.  

Obstacles for growth

One of the key obstacles to growth was finding the talent to meet the client demand. In 2022, a shortage of candidates was prevalent, resulting in intense competition for top-quality lawyers. The cream of the crop was often inundated with multiple offers and, often approached with counter-offers from their current firm. An example was a fairly junior lawyer we met last year who was on $120,000, he was offered a role at $130,000 before his employer counter-offered with $200,000 and after a few months moved jobs anyway. 


Around 44% of law firms increased headcount in 2022, 34% were at the same level, and 22% decreased staff. Medium-sized firms saw the largest growth. Despite storm clouds overseas, we are yet to witness any mass layoffs, and firms have witnessed an average turnover of around 21% of staff.  60% of firms anticipate an increase in headcount in 2023. 

Services demand

Most lawyers were much busier than pre-Covid levels, and there was particular demand in transactional areas like commercial law, M&A and IT. Property was strong for the first half but cooled off with higher interest rates that began in May 2022. Commercial leasing was busy with companies downsizing as they now require smaller footprints with staff working from home part-time.  Litigation and employment have also been busy with changes to the law during Covid. The expected wave of insolvency work has not yet materialised. Insurance has been busy with large-scale disasters including the pandemic, floods and fires.

There was an increase in turnover (24% of professionals) as incentives were offered to move jobs and there was overall confidence in the job market removing the perceived risk of changing roles. Lawyers sought out firms with aligned concepts of flexibility and values. 

Sector salaries and conditions

Wages in legal firms generally increased nationally by 4.1%, which outperformed the national average of 3.3%. Paralegals and Knowledge management professionals were the big winners with a 5.3% and 14.8% increase respectively.

Research indicates around 78% of firms offer bonuses to some staff. Bonuses ranged from performance-based for individuals and teams, recruitment referrals and client referrals.  

There was also an increase in demand for flexibility. Full-time work in a firm is anachronistic and firms demanding staff on-site full-time “genie” is not going back in the bottle, with 93% of firms offering WFH and 81% offering flexible work hours. Flexible options also include additional leave, study and paid parental leave. 

Many firms are also finally focussing on well-being and are offering specialised programs, leave entitlements and Employee Assistance Programs. Other benefits include yoga classes, gym memberships, social activities, legal services, health insurance, professional development, meal allowances, laptops, phones and parking. With the tight labour market, there have also been generous sign-on bonuses to incentivise lateral moves. Similarly, counteroffers were employed to attempt to retain staff. However, counteroffers tend to just delay a departure rather than provide long-term retention.

Diversity and Inclusion

While there is a lot of lip service to diversity and inclusion, there is still a gender pay gap, but the trend is downward. Female solicitors (61%) outnumber male solicitors in NSW for the fifth consecutive year. As Women’s Agenda reports: “Male solicitors make more money on average in nearly all levels of the profession regardless of  age. Females were best represented at the partnership level in medium and medium-large firms.

Jason Elias

Jason Elias, CEO of  Elias Recruitment

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