Departures continue to outweigh hires for top New Zealand law firms
Quarter 3 of 2024 saw the top New Zealand law firms continue to lose more lawyers than they’re hiring with every 1 hire seeing 2 lawyers depart. This is another increase in departures from quarter 2 (where every 1 hire saw 1.8 lawyers depart) and quarter 1 (every 1 hire saw 1.3 lawyers depart). The trend has steadily increased throughout 2024.
Hires
The two main sources of talent for the top 7 firms (almost 50% of total lateral hires) during quarter 3 were other top 7 firms (24%) and overseas returnees (23%). Recruitment from these two sources of talent was up from quarter 2 where top 7 firm hires made up just 16% and there were no overseas returnee hires. Although, that number could be impacted by lawyers wanting to wait until after the northern hemisphere summer before returning.
The next largest sources of talent were national firms (19% – an increase from 10% in quarter 2) and in-house (14% – a decrease from 32% in quarter 2). Boutique / specialist firms and city firms made up the rest of the hires with 10% each.
The most sought-after expertise was corporate and commercial, followed by finance and employment in equal measure, and then litigation and dispute resolution. The most sought after PAE brackets during this quarter were fairly evenly divided: 0-2 years PAE (34%) then 3-7 years (29%) and 11+ years (29%).
Quarter 3 hires were much more evenly sourced from overseas, top 7 firms, in-house and national firms than in quarter 2 where almost two-thirds of hires were sourced from in-house and boutique/specialist firms.
Departures
The two most notable points from quarter 3 departures from the top 7 firms are the increase in those leaving to go overseas (33% – up from 17% in quarter 2) and in-house (21% – up from 11% in quarter 2). See more detail about where they are headed below.
The next most popular moves are to city firms (12%), boutique / specialist firms (10%), another top 7 firm (5%), national firms (2%) or to join the bar (2%). The trend definitely shows New Zealand law firms continue to lose more lawyers to going either overseas or in to in-house roles.
Top firms are attracting overseas returnees
In our quarter 2 insight, we commented that while many firms are making considerable efforts [to recruit lawyers returning home…to New Zealand], the figures do not show these efforts have yet come to fruition. We said we’d watch this space as the year progresses, and notably, the quarter 3 figures show that the top firms’ efforts have not been in vain.
With 23% of the top firms’ hires coming back from overseas, it’s clear that the proactive effort put in by these firms has paid off. It will be interesting to see if this trend continues into quarter 4 and 2025 as the demand for lawyers continues to remain high.
The Insource data also shows that 19% of the quarter 3 hires made by the top 7 firms were alumni hires, with half of these returning from overseas. This highlights the importance of staying in touch with your top performing alumni when they head overseas, and ensuring your firm is their first choice for their return to NZ. Yet New Zealand law firms continue to lose more lawyers to both overseas and in-house options.
Overseas and in-house are attractive options
The Insource data shows that there has been an increase in departures going overseas and to in-house roles in quarter 3 (33% left for overseas (17% in Q2) and 21% left for in-house roles (11% in Q2)).
The attraction of working overseas is no longer just for countries far afield like the United Kingdom or Dubai – Australia is also an incredibly attractive option at the moment. In quarter 3, the Insource data showed that the top 6 Australian firms1 hired 12% from overseas with 42% of these hires coming from NZ firms (from Chapman Tripp, Bell Gully, MinterEllisonRuddWatts, Buddle Findlay and Russell McVeagh). Not only does Australia pay more, these Australian firms can also provide more specialist experience and access to more global work with a number of international firms having offices in Australia. We have also seen the rise of Australian recruitment agencies employing recruiters on the ground in New Zealand to specifically target and hunt kiwi talent for Australian law firms.
The allure of working in-house continues with top lawyers deciding to move out of private practice. Although, this is somewhat offset by the top firms also hiring out of in-house as well – a growing trend over the last 18 months.
New Zealand law firms continue to lose more lawyers – time to Identify and keep track of top talent
With the need for law firms to keep track of top overseas talent in anticipation of them returning to NZ, Insource customers have an advantage in being able to identify Australasian lawyers currently located overseas and keep track of them.
The Insource searchable database contains up-to-date profiles of all lawyers with a current New Zealand (and Australian) practising certificate no matter where they are in the world. Insource enables our customers to keep track of those lawyers and stay connected with them (through our activity tracking system) to ensure your firm is top of mind when they’re considering a return home. Better yet, Insource can show you talent that has previously worked with your existing workforce. It is always better to hire someone you know something about than someone you know nothing about.
If you’re interested to explore 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. As New Zealand law firms continue to lose more lawyers, now is the time for you to use technology to enable you to win the war for legal talent.
