Pay Rises in the Pipeline for Most Lawyers & Staff at Australian Law Firms

Most lawyers and staff working at Australian law firms can expect to receive a pay rise at or above the Consumer Price Index (CPI), according to the 2016 ALPMA/empire group Legal Industry Salary & HR Issues Survey results.

254 Australian law firms from across the country, employing 10,153 people, participated in the research conducted by the Australasian Legal Practice Management Association (ALPMA), supported by the empire group.

“Forty five percent of respondent Australian law firms expect pay rises to be above the rate of CPI this year, with a further 32 percent planning on increases in line with CPI,” said Ms Emma Elliott, ALPMA Board Director and Business Manager at Steinepreis Paganin, a Perth-based corporate law firm.

Only 6.5% of respondent firms are planning a wage freeze.

“Victorian firms are the most bullish about wages growth, with 58 percent of firms planning individually negotiated wage increases above CPI for their staff, compared to only 21 percent in South Australia,” she said.

Large law firms (75 + employees) pay the highest salaries for lawyers for nine of the 14 legal roles tracked in the survey.

Western Australian lawyers continue to be the best paid in Australia, earning the highest salaries for 11 of the 14 legal roles tracked in the survey. Only Managing Partners, Salaried Partners and Consultants are better paid in other States.

“Overall, law firm salaries are 38% higher in capital cities than in regional areas, with capital city senior executives paid a whopping 63% more than their country counterparts.”

Bonuses for performance

Bonuses continue to make up a crucial element of compensation packages for lawyers.

“Firms are increasingly using metrics to clearly define their expectations for lawyers’ performance, and are using bonuses as leverage to focus and reward individual effort in targeted areas,” Ms Elliott said.

It’s hard to find quality staff

“Finding quality staff remains the number one HR challenge for most law firms in 2016, followed by managing poor performance and employee engagement/retention,” said Ms Karen Waldock, Managing Partner at research partner, the empire group.

The exception to this is for large firms (75 to 149 staff), where ‘developing organisational leadership capabilities’ was cited as the number one challenge.

“The number of firms planning to recruit staff has increased this year (from 28 to 31 percent)—and most of those planning to hire new lawyers are doing so as part of their strategy to grow their firms (70 percent), rather than just to replace departing staff (30 percent),” she said.

“There are also a number of missed opportunities that law firms should consider in terms of benefits packages to attract staff,” she said.

“For example, only 15 percent of firms offer social responsibility volunteer programs, yet these are very appealing for Generation Y and Z staff, who often look for more meaning than firm profitability from their work.”

More work to be done on diversity and inclusion

The survey found that women dominate the Australian legal profession but are under-represented in partner ranks and in law firm board rooms.

“The figures speak for themselves. While the majority of lawyers at respondent law firms are women, only 34 percent of non-equity partners, 17 percent of equity partners and 21 percent of law firm board members are women,” she said.

“The issue of under-representation of female lawyers at the highest levels of the profession is not a new one and presents an on-going challenge firms need to address,” she said. “New, creative approaches to retaining women in the law are needed to solve this problem.”

Under-representation at this level is not just isolated to Australian firms—the results for New Zealand firms in terms of lower female representation in the partnership ranks and board room were strikingly similar, she said.

Women dominate management roles (64 percent overall) and hold 87 percent of all administrative roles at law firms.

Gender Pay Gap

The majority of respondents (61 per cent) do not believe there is a gender pay gap in the legal industry and very few (6 percent) believe there is a gender pay gap at their firm.

“Interestingly, the views of respondents from very large firms on the prevalence of the gender pay gap differed significantly from their colleagues at smaller firms, with 80 percent of large firm respondents indicating there was a gender pay gap in comparison to 27 percent of respondents from smaller firms.” Ms Elliot said.

“The best way to confirm this perception is to conduct a gender pay gap analysis. It seems large firms are leading the way here, with 67 percent planning to conduct a gender pay gap analysis this year,” she said.

Comprehensive, independent information on salaries, benefits and bonuses

The 2016 ALPMA/empire group Australian Legal Industry Salary & HR Issues survey report is the most comprehensive, independent report on salaries for all roles at Australian firms. This is the eighth year the research has been conducted.

252 respondent law firms, employing 10,153 staff, from across Australia provided comprehensive information about salaries, benefits and bonuses paid for lawyers, management and administrative staff, and insight into the critical HR issues and challenges facing firms.

The report shows the highest and lowest salary paid and the ‘typical’ salary paid for 67 roles at law firms. Salaries for each role are also broken down by size of firm and by location, allowing companies to benchmark their remuneration strategy for each role with similar firms.

Other information provided in the report includes anticipated salary movements, recruitment plans, employment benefits, bonuses, staff employment arrangements and diversity and inclusion programs. This year, the survey was extended to include questions about gender mix by legal roles and gender pay gap perceptions.

The ALPMA/empire group Australian Legal Industry Salary & HR Issues survey report is provided free of charge to all participating firms. Non-participating firms can purchase a copy online for $A550 (ALPMA members) or $A2,200 (non-members). Data was collected in March, 2016.

About ALPMA

The Australasian Legal Practice Management Association, (ALPMA), is the peak body representing managers and lawyers with a legal practice management role. ALPMA provides an authoritative voice on issues relevant to legal practice management. Members of ALPMA provide professional management services to legal practices in areas of financial management, strategic management, technology, human resources, facilities and operational management, marketing and information services and technology. For more information about ALPMA, visit www.alpma.com.au

About the empire group

empire group is a specialist recruitment company with offices in Brisbane, Sydney, Melbourne and Perth. We specialise in Legal Support and Legal Professional recruitment for the legal profession, recruiting into both private practice law firms and in-house organisations. We also have separate teams dealing with Corporate Support, Medical Support and Accounting & Finance recruitment. The organisation delivers solutions for targeted industries through the empire group brand and the empiregroup.careers website. Legal eagles (www.legaleagles.careers) is the specialist legal support arm, empire legal  (www.empiregroup.careers) is the specialist legal professional brand.

2016 ALPMA Australian Legal Industry HR Issues & Salary Survey research report is available now.