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ACHIEVERS can no longer anticipate remuneration for their efforts.
That remuneration – whether delivered through bonus, salary or seniority – is no longer a guarantee for even some of the best of the bunch.
The Mahlab Report 2014 has drawn on actual salary figures, employment experiences and job satisfaction across the legal sector both internationally and domestically to infer that getting that little bit extra is likely to require a lot more groundwork than it did in the past.
Mahlab surveyed private practice lawyers and partners, in-house lawyers, general counsel, company secretaries, law firms and legal directorates to collate the report.
The recruiter also drew insight from discussions over the course of the year between clients and candidates.
Mahlab managing director Lisa Gazis (pictured) says the disparity between remuneration expectation and reality turned out clearly in the report, a reflection of a slow growth economy.
“Practitioners overall were hoping they would get stronger increases and didn’t feel adequately rewarded or compensated for effort,” says Gazis, noting that corporate salaries increased 3.3 per cent (up from 2.8 per cent last year) and private practice salaries increased 3.8 per cent (up from 3.7 per cent last year).
“However, increases aren’t automatic anymore, and bonuses are no longer being used to reward performers but instead only the highest of performers.”
Despite soft market conditions, Gazis says there have been conservative salary increases and a further lifting of salary freezes.
“While there has been a slowdown of salary bands and the market is remaining conservative, we must remember the industry is traditionally more conservative.
“Overall, it is a positive market and time for Brisbane lawyers.”
Gazis says banking, finance, corporate, construction, property and employment have been Australia-wide legal hotspots for the past financial year, with many of these areas trending in Brisbane too.
Recruitment is also picking up in strategic roles that require a greater focus on areas of risk management and compliance owing to a complicating regulatory environment.
“Energy and resources are still active in Brisbane, as well as construction, infrastructure and corporate commercial,” she says.
“Private practice seems quite desirable too – but we are perhaps seeing less satisfaction in this area through the outcomes of this year’s review.”
The report revealed that corporate lawyers were more likely to receive bonus in the past year, with 50 per cent of respondents reporting they did, while only 12 per cent of private practice lawyers shared in this reward.
However, private practice lawyers felt significantly more confident about career progression opportunities – 60 per cent compared to 31 per cent in corporate roles.
PATH TO PARTNERSHIP
Perhaps this is reflective of a more turbulent path to partnership, articulated by longer hours and higher budgets.
Moreover, lateral hires are proving more popular according to the report, so it may be more likely for competition on the partner path to come from left-field.
When one does get there, the modal partner salary at major Brisbane firms is $1,095,000, $745,000 for mid firms and $375,000 for small firms.
The skillsets and networks of potential partners come under closer assessment in a slow growth economy.
The report notes the drawcard of having offshore and cross-border experience listed on a resume when vying for a senior position.
Considering this and the popularity of lateral hires, the emphasis across the legal sector is on competence, rather than years of experience.
PROFIT PROFICIENCY
Partners and teams are leaving less profitable areas, as firms seem to go forward with a more cohesive vision in the name of profitability.
Salaried partner status is difficult to attain, let alone equity partner status, as firms ‘de-equitise’ to improve per partner profitability.
Therefore, firms are prioritising retention particularly at the senior associate level, by creating new positions that recognise and reward high-performers in cases where partnerships are not permitting.
As such, junior lawyers are experiencing restrained salary increases, as firms turn much of their budget to retaining senior practitioners.
WHAT’S NEXT?
Demand for contracted lawyers will continue due to companies requiring short-term solutions to resourcing shortages and a decline in the rates of these practitioners.
Moreover, payment models are taking a more solid shape. Mahlab reports an increasing trend for payment models based on pre-determined fees rather than hourly rates.
Gazis ends with a positive word about payment, saying that salaries and bonuses are well-positioned to rise.
“After some very challenging years, Mahlab Report 2014 reveals a rise in business confidence and commercial activity, and a more optimistic outlook for financial year 2015,” she says.
“More Australian lawyers – particularly in banking, finance and corporate – may set their sights on London, United Arab Emirates and Hong Kong as the global legal outlook continues to improve.
“This may also be good news for those fixed on staying here, as it could have an inflationary effect on salaries or increase the incidence of bonuses for existing staff and sign-on bonuses for lateral recruits in these areas.”
Mahlab works across industry, both domestically and internationally, to reveal employment and market trends.
The company has been developing its depth of knowledge in legal recruitment since the inception of the Mahlab Report in 1984.
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