CURRENT STATE OF THE LEGAL JOB MARKET
Expectations vs. Reality in the Legal Job Market
After 21 years in legal recruitment, I thought I knew a thing or two about the legal job market. After all I had lived through the 2001 Recession and the Global Financial Crisis.
The Initial Impact of COVID-19
I predicted when Covid hit that there would be mass lay-offs and very few job requirements and a deluge of quality candidates struggling to find work. Well after a large serving of humble pie, I admit I was absolutely off-target.
The initial uncertainty and fear when the pandemic struck in Jan-March 2020 – which according to a recent Jobadder report led to a drastic 41.6% drop in the number of placements across industries by agencies. This was the biggest drop in demand I have witnessed.
The Swift Recovery
However, the recovery was just as rapid with a rise in business confidence and a realisation that Australia was in a relatively good position compared to countries like the US, UK, India or Brazil. Perhaps as a result of early actions by governments, perhaps by civic duty of most citizens complying with health advice and perhaps sheer luck that we are an island- whatever the reason the catastrophic fatalities overseas were largely avoided here.
A Candidate-Short Market
Meanwhile business went on and needed lawyers to do the work. JobKeeper meant that mass lay-offs in industries like the law were avoided. There were some redundancies in April-June quarter but anecdotally some law firms have suggested it was an opportunity to let some B players go.
With the rapid bounce came strong demand for lawyers and a scarce supply at the right levels. There is a large number of law graduates but very few quality lawyers on the market at the2 year post-qualification experience level.
There are some movements of teams with firms merging or even ceasing operations, but the legal job market is definitely candidate-short. Even though lawyers represent only a small percentage of the workforce, 10 of the top 20 Hardest Jobs to Fill were for lawyers (Seek report)
Many lawyers are risk-averse by nature and the idea of changing jobs in an uncertain economic climate has reduced the natural churn in the market for legal jobs. There has also been a dramatic rise of counter-offers. Busy employers who do not have time to recruit are throwing cash at disgruntled employees to stay put. Inevitably the financial incentive only last 6-12 months before many employees end up leaving the firm anyway. Many explain that once they have said they were going elsewhere, they were treated differently.
Areas of Increased Demand
There are few surprises in the areas of demand. NSW has experienced a rapid property boom, so property and banking and finance lawyers have been in demand with a 235%and 223% respectives increase in jobs from Oct-Dec 2020 to Jan-March 2021. There were also large increases in corporate and M&A work (187%), regulatory(450%), litigation(143%). Covid lockdowns are also partly responsible for the increase in demand for family lawyers- rising 400% in one quarter. There was slightly less demand last quarter in financial services, insurance and inhouse roles.
The chart above clearly shows an explosive surge in demand across several legal specialisations, particularly in Regulatory Law and Family Law, which experienced 450% and 400% growth, respectively. These trends reflect the impacts of the COVID-19 pandemic on regulatory frameworks and family dynamics. Meanwhile, NSW’s property boom fueled strong growth in Property and Banking & Finance law roles.
This dramatic quarter-over-quarter change illustrates how external events like lockdowns and economic shifts can rapidly reshape the legal job market.
The greatest increase in level was for Division heads, junior and intermediate associates, while there was a decline in partner and graduate roles.
One refreshing change has been the openness to flexibility. While law firms were gradually moving this way, the pandemic was a major catalyst. Firms glued to the idea of lawyers having to be in the office to be productive have realised that many professionals are actually more productive at home and work longer hours without having to commute. This has opened up opportunities for many lawyers who also juggle family responsibilities.
The Shift Towards Flexibility
Firms who want to return to full-time in the office post-pandemic, may struggle to attract many lawyers who have embraced flexibility and a number who have even relocated outside of metropolitan centres.
Adapting to New Realities
Progressive firms have seen this as an opportunity to reduce their rent and downsize premises which are now only partly occupied. Some are evaluating suburban regional hubs rather than only a CBD presence with higher rents. There is also less need for marble foyers, glamorous board rooms adorned with fancy Artworks and harbour views if your clients are now on Zoom.
How Firms Can Compete for Talent
In the war for talent, firms will be competing. A few tips to help firms have the edge over their competitors:
- Don’t rely on generalist job boards like SEEK or Indeed
- If you see a good CV, call the candidate that day and get them in ASAP
- If you must have more than 1 interview don’t spread them too far apart, it just leaves the opportunity for another firm to compete.
- When you interview, while assessing applicants, also sell your opportunity- point out your EVP- employee value proposition.
- Be fair, pay market and don’t lowball candidates (read the ALPMA survey for market rates). You will get more from employees who feel valued and will tend to stay longer.
Looking Ahead
The legal job market is definitely bullish and short of some major third wave or unforeseen economic curve ball, FY22 will be a good year for the legal profession with strong growth and demand for lawyers. Then again, my crystal ball last year was faulty.
Jason Elias, CEO Elias Recruitment