Market Update
Welcome to the first Adelaide legal market update for young lawyers in 2011.
Lawyers in Demand?
After a very slow 2010 calendar year, legal recruitment activity started to warm up generally across Australia in late 2010, with law firms interstate showing a more positive appetite for creating new roles and replacing vacating lawyers. Markets like Brisbane and Perth, far less affected by the GFC, showed solid demand, particularly in transactional areas related to the mining boom.
In Adelaide though, despite the end to the GFC, corporate activity, large transactions and general business sentiment remained low, leading to parallel levels of low recruitment by law firms. This effectively left Adelaide lawyers in the lowest level of law firm recruitment seen since the recession we had to have.
Fortunately, across Australia financial markets started to pick up noticeably in late 2010, with increased performance into 2011. After 2 years of being unable to assist finance lawyers seeking new roles in markets like Melbourne and Sydney, we were suddenly inundated with newly created roles in B&F in the eastern states, as financial markets started to free up access to cash and legal work increased.
Demand for lawyers remained insignificant in London and the US, with a massive oversupply of local lawyers yet to be dented post GFC. Hong Kong, however, started to pick up in late 2010, with demand in oil and gas, energy and corporate increasing and Australian lawyers with very strong experience gaining interviews.
Markets in the Eastern states have picked up significantly in 2011, with most of the large national firms re-entering the market.
Finally in March/April this year, transactional work in Adelaide showed signs of increasing. This, coupled with the increasing trickle of Adelaide lawyers heading east, has brought a number of local firms back into the recruitment market. Although far from a boom, there are now good local opportunities opening up in corporate and transactional areas at 2-5 year levels for the first time in years and firms are struggling to find lawyers to fill those roles.
Future Demand?
The increased appetite by firms in the Eastern States is likely to begin to drive further market demand in Adelaide over the next 6 months. A spike in demand is unlikely though, with overseas markets yet to pick up in any meaningful way, particularly in London, where the appetite for Australian lawyers remains mild and there are still barriers to entry. While much talk is being made of the minerals boom in South Australia, most of that work is still at capital raising or exploration stages and is not currently providing the hoped for boom. As a result, we are predicting steady growth in Adelaide over the next 6 months for front end lawyers while in the Eastern states we are expecting more rapacious levels of demand to return. Specialist areas like finance, tax, construction, mining/energy and IP/IT ought to follow along with the increase in demand experienced by lawyers in corporate.
Litigation remains steady in Adelaide, with reasonable demand. Insolvency, so often a driver of litigation demand in Adelaide, has been relatively flat, so while demand for litigators has been steady, it has yet to improve and may take a very large matter for demand to pick up.
Salary Review - the Market...
Always a topic of contention, May sees us start to consider what firms are doing this year with salary rises. Although lawyers may feel they have done it tough, with a freeze in 2009 and moderate rises in 2010, our advice is to expect similar rises this year. The market has yet to see any significant rise in demand and there are few lawyers in the market who are smashing budgets. Anecdotally, firms are facing increased costs across the board and revenues have stayed relatively flat. That said, for lawyers who are well ahead of budget there would be a good chance to stand out from the pack this year.
The good news is that next year should see more significant salary rises as the market begins to feel the effects of a more lengthy period of increased demand locally and interstate and more lawyers are drawn out of Adelaide in the 3-6 year bracket. London may even begin drive demand later next financial year if it continues to improve.
Good luck with your reviews and with what appears to be an improving market within which to consider your options either locally or interstate. For lawyers with particular skills (Finance, Corporate, Resources or Energy) the overseas markets are starting to re-awaken.
