No more 25pc pay increases for lawyers as market turns

afr.com:

The era of 25 per cent increases in pay, sign-on bonuses and junior lawyers playing firms off against each other is over, as flatter revenues and a softer labour market turn the balance back in favour of employers.

Jonathan Walmsley says lawyers’ negotiating power has reduced greatly in the last year.  

The demand for Australian lawyers in the United States and London has also dropped off, and local firms that went on “hiring frenzies” during COVID-19 have put the brakes on.

Law firms in the US and Asia, as well as local professional services firms, have all begun to lay off staff and delay the start dates for new recruits.

But Australian law firms are holding off on redundancies, wary of being caught understaffed when the legal market rebounds.

Jonathan Walmsley, head of recruitment firm Marsden’s Australian division, said “there are not a lot of jobs going” for junior lawyers looking to move laterally.

As a result, attrition rates for junior lawyers have reduced considerably.

“Lawyers are just happy to sit tight at the moment,” Mr Walmsley said, and their ability to negotiate or agitate over long hours, flexible working and employment benefits had diminished greatly.

Pay is back in employers’ favour, says legal recuiter Matt Brown. 

That is a far cry from last year, when law firm leaders described talent recruitment and retention as their “biggest challenge”, and were offering out-of-cycle promotions and enhanced leave arrangements to retain junior and mid-level lawyers.

During the pandemic and its immediate aftermath, graduates and junior lawyers often fielded multiple offers from different firms, allowing them to negotiate higher pay and, in many cases, sign-on bonuses.

That era is over, according to Matt Brown, a