Mahlab Report 2017

1 PRIVATE PRACTICEAUSTRALIA - INTERNATIONALM ahlab Report 2017 Introduction 1 Partners 6 Private Practice Lawyers 9 International 15 All artwork reproduced with the kind permission of the artist, Bill Sampson Figures contained within tables in this survey have been rounded to the nearest $500 and are quoted in local currency. Mahlab Recruitment (Vic) Pty Ltd 2017 Mahlab Recruitment (NSW) Pty Ltd 1 Mahlab Report 2017 Private PracticeThe Mahlab Report has always been informed by a unique mix of industry knowledge, research and discussions with clients and lawyers, with the aim of producing a useful, accessible guide for the legal profession. We interviewed clients and lawyers and engaged in discussion groups, which enabled us to source information more widely from the legal profession about work conditions, remuneration and emerging thank our consultants for their commitment, work and effort in providing quality search services to our clients and in assisting lawyers with career management and placement services.

2 Their efforts and work have enabled the discussions regarding the legal profession, employment experiences, trends and remuneration which have informed the Mahlab Report 2017 . We thank all contributors for their frank perspectives and the generosity with which they have shared their information and experiences. It is this first-hand information that has equipped us to produce industry relevant reports that not only inform but also challenge best practice. We invite you to join the social media conversation about #MahlabReport2017 by following @MahlabLegal or connecting with us on FINDINGSV alue and innovationAn increasingly savvy and demanding corporate client group, and investment in technology and innovation are the key elements driving the growth and speed of the legal profession this year.

3 Corporates are demanding faster and cheaper solutions from their law firm panel members but also expect innovation and business partnering. Competition on price and service, including value-adds, is more ferocious than ever; innovation is the catch-cry of corporations in their demands of law have also led the way in their use of technology and a nimble work force, with a high take-up of technology to track external spend and manage process in compliance, litigation and transactional work and the employment on a needs basis of contract, secondee, part time and flexible staff. While law firms are also investing heavily in new technologies, many still struggle with flexibility of resourcing, the formation of contract labour subsidiaries of legal process by mid sized and larger firms and companies with a sophisticated in-house legal function is now the are retaining more and better work in-house.

4 The trend is for only very specialised and very large transactions and litigation to be outsourced, Mahlab Report 2017 The Mahlab Report is a leading source of insight for employers and professionals into Australia s legal industry. The Mahlab Report is recognised for its in-depth information about the legal profession, employment experiences, trends and remuneration tables. 2 Mahlab Report 2017 Private PracticeIntroductiongenerally to the larger firms. Not surprisingly, firms of all sizes Report a decrease in work flow outside these categories (and even within, as competition for each matter is heavy), although small firms may still retain high volume, low margin work from a corporate client. Private practice winners are those firms with clients not large enough to hire their own lawyers yet.

5 Government continues to provide a steady work flow to panel firms, albeit at lower hourly entrants, including US firms, have disrupted the local market particularly in Sydney and Melbourne. Well-established global firms (themselves newcomers only five years ago) are facing aggressive competition for their partners, many of whom have moved to new global entrants with deep pockets. Firms feel pressured not only to cut their fees, but also to provide secondees, CLE, entertainment and engagement opportunities for their in-house counsel clients. At the same time, corporates are sourcing team members from the very firms that service them, building in-house capability beyond broad commercial law into specialised areas such as competition, finance and mergers and for lawyers with 3 to 6 years experience is particularly high.

6 Areas of demand in private practice have centred on construction and infrastructure, (especially front-end), property, competition, IT, banking and finance, wealth management and general commercial including business structuring and trusts. Companies are competing head-on with their law firm providers for the same talent pool. Legally qualified individuals are becoming more deeply embedded in the company, not only in legal and company secretary roles but also risk, compliance and regulatory. The general counsel role has in many instances expanded to encompass other service areas such as governance, corporate affairs and insurance. Company secretarial recruitment has been stable. As opportunities change and develop in the corporate world, the path to partnership is slower than ever.

7 Disgruntled senior associates, while paid well, are more inclined than ever to explore loss-leader career choices in government and in-house law. Senior associates (and partners) are also more motivated than ever to explore careers outside the law. The market has responded favourably, with senior lawyers being regarded as highly attractive candidates for non-executive directorships, CEO and senior government roles. Management consulting, participation in start-ups and quasi legal roles also attract many partnership numbers are falling as equity is redistributed from existing equity holders whose status is changed to non-equity or they are encouraged to leave the firm. Salaried partnership is being used as a smokescreen: to all the world a partner but in reality, still an employee.

8 Overall, partner income has fallen slightly this activity has fallen in Perth but remains strong in Sydney and Melbourne. Brisbane is picking up; Adelaide remains market has responded favourably, with senior lawyers being regarded as highly attractive candidates for non-executive directorships, CEO and senior government Report 2017 Private PracticeIntroductionIntroductionIntroduc tionRemunerationIn private practice, movement in remuneration has continued to be conservative, with an average national salary increase of , down from in 2016. However, this figure belies the hot spots of demand and remuneration -based retention strategies. Hard-to-find and hard-to-replace lawyers in banking and finance, for example, might enjoy a 25% uplift upon promotion as a senior associate; new global entrants will pay well above the odds to secure partners and lawyers with 3 to 6 years post qualification experience in the larger firms enjoyed increases of 7 10%.

9 High-achieving senior associates in similar sized practices were awarded increases of up to 10%, plus a remuneration movement is generally linked to corporate performance: lawyers are not singled out for special treatment. Having said that, in-house lawyers joining a company from private practice will usually find that their current remuneration is at least matched or a slight increase applied as inducement in a competitive market. Overall in-house remuneration has risen by a national average of compared to last in private practice are still applied where individual performance is exceptional; corporate bonuses are less common due to the company not hitting its targets. That said, 62% of lawyers working in the corporate sector still have a bonus component in their package, and this percentage has been fairly consistent for over five , an in-house candidate this year is more likely to ask for and receive compensation for the bonus they will forego if they change from one corporate to firms, especially those based in the US, have continued to enter the Australian market, in some instances through aggressive recruitment of whole instability and tighter visa rules has dampened enthusiasm for Australian lawyers seeking adventure in London and Australian firms interest in foreign lawyers.

10 Although inter-office secondments continue in the global firms and can be an effective retention strategy for mid level SampsonLisa Gazis62% of lawyers working in the corporate sector still have a bonus component in their package, and this percentage has been fairly consistent for over five Report 2017 Private PracticeState of the marketCORPORATEPRIVATE PRACTICEHIRING ACTIVITYS ydneyMelbournePerthAdelaideBrisbaneAvera ge national salary increase of down from last yearAverage national salary increase of down from last yearCurrent partner market is turbulentGeneral counsel role is broadeningPartner income flattened or fellOutsourcing trend growingSome work being lost to in-house lawyersRetaining more and better work in-houseIncreased recognition for corporatesFirms feeling pressure to cut feesInvestment in technology and innovationCompanies becoming more flexibleNew entrants are disrupting local marketsDemand for