Elias Recruitment brings you the latest state of play in the Australian legal market, drawing on the Urbis National Profile of Solicitors Report – Urbis (2016) and a review of the State of the Legal Market by Melbourne Law School and Thompson Reuters Peer Monitor (2016).
The profession is growing, aging and diversifying
The Australian legal profession is experiencing significant growth. Over the last five years there has been a 24% increase in the number of practicing solicitors. This reflects significant growth in the profession.
Indeed, for the first time, gender parity has been achieved, with an equal number of men and women in the profession. Women now make up nearly 25% of all partners in all law firms and a third of partners appointed in the six months to 2 July 2016.
However, this diversity is not enjoyed across the board. Australian lawyers with Asian heritage have encountered a ‘Bamboo Ceiling’, with six of Australia’s large law firms having no partners with Asian backgrounds, and only 0.8% of the Australian judiciary having an Asian heritage.
Much like Australia’s overall workforce, the profession is also becoming older, with one in 12 solicitors aged 65 years or older.
Legal employment sectors are also shifting. Whilst the majority of lawyers continue to work in private practice, there has been a significant increase in the number of solicitors working in the corporate sector and government. Between 2011 and 2016 there has been a 59% increase in this sector.
Revenue and demand declining, while competition and disruption is on the rise
The legal market is in a state of considerable flux. Revenue and demand for traditional legal services is declining – with total legal spend going to traditional law firms contracting. The big winner are multidisciplinary practices, digital solutions and NewLaw models which are expected to seize 40% of total legal spend by 2021.
With the pace of change increasing, progressive law firms are adapting quickly to outperform their competitors. It is imperative that lawyers and law firms looking to survive and thrive in this new environment understand the key elements disrupting traditional legal services – NewLaw and related technology, Multi-Disciplinary Practices, and Boutique, Specialist and Focus Firms.
What are the Macro Trends?
- Lateral partner movements – acquiring proven rainmakers from competing firms is the next best alternative to drive revenue growth – but these come with cultural risks!
- Growth of digital – the App takes hold of law firms.
- Supply of legal graduates – but don’t believe the media! Whilst we are told that there are now 41 law schools in Australia producing over 15,000 graduates per annum the figures collected in 2015 by the Counsel of Australian Law Deans reported that just 7,583 law students graduated in 2015.
- Investment in sales and pricing capability – many firms are investing heavily in upskilling their partners and senior staff in selling and pricing skills.
- Growth in the mobile lawyer.
In conclusion, the present state of the legal market is one of considerable change and opportunity. Firms which adapt to new business models and lawyers who embrace an understanding of new technology and adopt a broader advisory role will be best placed to benefit. Those who don’t risk falling behind their competition.
If you’re looking for more details about the market, or interested in exploring your next career move, get in contact with Elias Recruitment on (02) 9555 5711.