22 Dec 2023 – How was it for you?
On December 15th 2022, I was sitting in this exact same chair wondering why I’d left it until the day of the deadline to begin writing my contribution to the last Monty Monthly for the year. Fast forward to December 20th 2023, the day of this year’s deadline and yep, you know where I’m going with this.
Going back over last year’s hasty post for inspiration, I realised I left a gift for myself. I’d previously written a few questions only future Matt could answer. In late 2022 we were coming off the back of the busiest 18 months I’d ever experienced in recruitment. We were desperately pretending Covid was cured, demand for M&A lawyers in particular had been almost comical and Australia’s best and brightest had been heading to London and New York in their droves. However, whilst we all wanted to believe the good times would never end, as the year was winding down there was a definite wind of change beginning to blow through the market as global conflict and financial stresses started to rear their heads internationally.
Unsure of what the future would hold, my younger self asked me these five questions, so it’s time to answer them:
1. Are three-year lawyers being paid $200k yet? Obviously, a key feature of the legal recruitment market this year has been the runaway train called “market rate”. We have seen salaries offered that have truly made us wonder where this is all going to end. As an organisation that commits to producing an accurate salary survey each year, we’re currently considering replacing the detailed numerical analysis with the words “more, just more” to ensure we’ll be right every time.
Answer – nope. Someone hit the brakes this year. Lawyers are still enjoying the fruits of 2021/2022 when all the bandings increased, but those bandings locked in hard this year.
2. Did anyone end up getting a pay rise in July 2023? Against the backdrop of this year’s record raises and a potentially declining global economy it’ll be very interesting to see what firms end up doing next year and whether there’s any chance they can keep pace with the expectations that lawyers, particularly juniors, have begun to think of as normal. The supercharged salary reviews of 2022 will be very hard to maintain particularly if the market shifts and retention starts to fall off the front page.
Answer – yes and no and mostly not much. We did see small increases this year but nothing like the previous few years and in fact, in the face of the inflationary war we ended up fighting, most reviews were simply an exercise in treading water whilst retention fears were eased considerably by a contracted, jittery market.
3. Is London still a thing? This will be interesting in light of the exodus that’s taken place this year as Australian lawyers flocked to the UK. Many will have been quickly greeted with a concerning economic outlook, a deceleration in active recruitment, energy crises, political turmoil, the end of Neighbours and a war on the doorstep. Will the volume of recruitment undertaken when we believed the good times were to stay see a backlash now it looks like the good times have been re-classified as “having some electricity”
Answer – the flow of lawyers to London (and other destinations) ground to a standstill in the first few months of 2023 with most firms over there ceasing all recruitment into their transactional teams. Interestingly though, I was in London in September of this year to meet with a wide range of Australian lawyers working over there and they were, as a whole, a pretty happy bunch and there certainly wasn’t any sense of anxiety from them. Most said they were still very busy, albeit not to the crazy levels of the previous few years, and there was a confident sense that they could take this as an opportunity to breathe and perhaps travel, ahead of the market accelerating again in 2024. We’ve seen very little uptick in the numbers of Aussie’s leaving to return home unless it’s their choice and, in the last month or so, we’ve actually seen some Australian lawyers heading back in that direction whilst some of our London based clients are again briefing us on roles offering sponsorship and relocation. It’s not a tsunami yet but the attitudes of the lawyers I met over there and the subsequent return of some demand, all point towards 2024 being a much better year.
4. Are interest rates at 27% yet? They are, aren’t they. I knew it.
Answer – it was touch and go there for a moment, but it does seem like we’ve crested the hill. Waiting for a decision from the Reserve Bank each month began to feel like waiting for the Premier to announce our Covid numbers each morning. Both things I hope I can now stop following for a few years.
5. Who’s currently top of the “most-wanted” list? The last 18 months or so have been dominated by the demand for corporate lawyers and projects/infrastructure lawyers. The appetite for these people has been insatiable and lead to some of hardest fought battles for their attention. The end of 2022 has seen the hunger for corporate lawyers slip slightly, with demand for banking, disputes and restructuring lawyers taking the lead. It’ll be interesting to see if this trend continues and who’ll be getting all the love by mid-next year.
Answer – the decline in demand for corporate lawyers certainly continued throughout 2023 and hasn’t really recovered, but I still haven’t spoken to many M&A lawyers this year who have told me they’re not crazy busy, particularly as firms have held back on replacing staff who have left. Recruitment into most transactional areas slowed this year, particularly into the already well stocked teams in Australia’s larger/tier-one firms, but this was decidedly the year of the litigator, the leveraged finance lawyer, the project finance lawyer (because no one believes you’re actually real) and the real estate lawyer. Special mention goes to employment lawyers this year – we have no idea why but the demand for you guys has been bananas!
So, I’m slightly afraid to say “Hi – how was 2024?” to myself reading this in twelve months’ time but, for now, it seems like we might be inching past the worst of the market with some positive signs starting to pop up all around that indicate we could be heading back to the good times once more.
