Quarter 3 sees similar trends as quarter 2 for top Australian law firms recruitment in 2024
Quarter 3 of 2024 saw the top Australian law firms hiring as many lawyers as they were losing with a 1:1 ratio. This is an increase from quarter 2 which saw 0.8 lawyers hired for every 1 lawyer departing.
Hires
The largest source of hires for the top six firms were the top 50 firms (excluding the top 6) (33%) and in-house (22%), with an additional 20% coming from other top 6 firms.
Intriguingly, these numbers are very similar to quarter 2:
| Source of hires | Quarter 3 (2024) | Quarter 2 (2024) |
| Top 50 firms (excluding top 6 firms) | 33% | 40% |
| In-house | 22% | 21 % |
| Top 6 firms only | 20% | 14% |
We’ve often heard the big firms comment that they recruit offshore, and the local market isn’t a large source for hires for them. However, the Insource data clearly shows that the top firms are still hiring locally with 82% of hires in quarter 3 coming from the domestic market. Also, as explained further below, of those hired from overseas 42% were from just across the Tasman in New Zealand.
Alumni hires make up 22% of hires in quarter 3, which is the average of alumni hires across quarter 1 (30%) and quarter 2 (13.3%).
Continuing the trend from earlier this year, the most sought-after practice areas continue to be corporate and commercial, and litigation and dispute resolution – followed by finance and property and real estate.
The most sought after PAE group also remained the same with intermediate level lawyers at 3-7 years PAE the most sought after (representing 47% of new hires). The next sought after PAE brackets were 0-2 years (29%) and 11+ years (18%).
New Zealand lawyers were half of overseas hires
While quarter 2 and quarter 3 saw similar rates of hiring from the various sources, the main difference is that hires from overseas increased from 3% to 12%. Almost half (42%) of these overseas hires were taken from top NZ firms (Chapman Tripp, Bell Gully, MinterEllisonRuddWatts, Buddle Findlay and Russell McVeagh).
This aligns anecdotally with an increase in Australian recruitment activity in New Zealand, with Australia is viewed as an attractive option for NZ lawyers due to comparatively larger salaries and a generally more positive economic outlook.
Departures
For talent departing the top 6, we also see continuing trends, with most taking in-house roles (43%), taking on positions in a competing top 6 firm (14%) or top 50 firm (18%) and with a steady flow of talent heading overseas (10%). Again, these numbers are similar to quarter 2:
| Lawyers departed to | Quarter 3 (2024) | Quarter 2 (2024) |
| In-house | 43% | 39% |
| Top 50 firms (excluding top 6 firms) | 18% | 18% |
| Top 6 firms only | 14% | 10% |
The rate of these top-drawer lawyers heading overseas remains steady at 9%.
Therefore when comparing those joining and those leaving the stats show Australian law firms hiring as many lawyers as they are losing. Which means an awful lot of legal recruitment expenses.
Top 6 talent happy to move to mid-size firms
There can often be a reluctance from mid-sized firms to try to tap the big firms for talent because they wouldn’t be successful given the salary difference. However, we can see here that firms outside of the top six, including mid-tier firms that fall within the top 50, are seeing success in moving talent from the top six firms.
We’d humbly suggest that salary is not everything when it comes to attracting talent.
Australian law firms hiring as many lawyers as they are losing. A renewed focus on Retention: EVP, flexibility and the Right to Disconnect
The Insource data for quarter 3 continues to support the proposition that the talent leaving the top six law firms are seeking a change in firm/role rather than overseas opportunities. As we commented in our insight on quarter 2 moves, these lawyers are not heading overseas in large numbers and are instead opting for domestic roles for either a change of lifestyle (i.e. in-house) or into another top firm.
While there are some indicators of a softening in the market (from an employee to an employer market), this hasn’t really been felt on the ground by HR professionals in law firms. Consequently, to retain your current top talent and attract other talent there needs to be a focus on a firm’s employee value proposition (EVP). As Angela Sharpe (Head of People and Culture at Swaab) said in a recent HR Leader podcast:
I think what businesses need … is really to invest in an EVP (so an employee value proposition) to find out…what it is they can offer to an employee over and above a salary. And find out from candidates what it is that they want? Is it salary, is it great working conditions, is it flexibility, is it learning and development, all of those things. And I think investing in a robust EVP we are able to respond to a candidate or employer market regardless of where the balance lies.
The recent Right to Disconnect laws in Australia will also impact law firms’ ways of working as they aim to ensure that employees have time to rest and recharge without work interruptions. Angela Sharpe also commented that the challenge is how does the legal profession manage this when being a lawyer is not a 9-5 with remuneration packages acknowledging that work ‘after hours’ is part of the job.
Melanie Vairawanathan (founder of Melmark Law) also recently commented, when discussing the Right to Disconnect laws, that:
…what law firms need to remember is… if you foster that workplace that is…inclusive and accommodating of the needs of staff then there’s a better retention rate…you’re only as good as your staff.
These laws are a “moment for potential growth” and another opportunity for firms to again consider how they retain and attract top talent.
Insource identifies quality talent for you
Australian law firms hiring as many lawyers as they are losing, means there needs to be a focus on retention as wall as recruitment. As law firms focus on improving retention rates and ensuring their firm is attractive to top talent, Insource customers have an advantage in being able to quickly identify that talent and get to the front of the queue for the best talent more quickly.
With a searchable database of up-to-date profiles of more than 100,000 lawyers with a New Zealand or Australian practising certificate, Insource gives our customers complete visibility of the entire talent pool of lawyers in seconds. Law firms can quickly identify the right candidates for live vacancies, build future talent pipelines and get insights into the movement and composition of talent.
Oliva Holmes (Chief People Officer at Macpherson Kelley) has commented that one of the benefits their partners have seen from their use of Insource is that:
The partners have really appreciated understanding the depth or lack of depth for some of the skill areas across our practice areas. Being a data driven firm to be able to have that evidence has been really helpful for us,
How to tackle the Legal Recruitment issue
If you’re interested in exploring how Insource can assist your firm in making effective and quality hires, don’t hesitate to reach out to us and book in a demo. We’re here to empower you to take control of your recruitment and enable you with the fastest way to hire the right talent for your needs.
