salary & employment insights 2012 LEGAL Australia/new Zealand
table of contents Introduction About Hudson legal maximising value: the recruitment imperative market trends salary tables research methodology hudson's thought leadership program 1 2 3 5 9 14 15
introduction Welcome to our 2012 Legal Salary & Employment Insights. We conducted a comprehensive study of 5,563 employers and 5,748 employees in Australia and New Zealand. We cross-referenced their answers with our own data to develop an industry salary guide that is both broad and deep. 1 In keeping with our aim of providing our clients and candidates with the most up-to-date industry insight and counsel, we ve overlaid that data with our analysis of the findings together with some key points to take into account when considering salary packages. Our recommendations are set in the context of the economically uncertain times that are fast becoming a fact of life for most developed nations. Over the next 12 months, the great test for organisations on both sides of the Tasman will be to equip themselves with the people they need to move through the next phase of their economic cycles. Despite uncertainty in the market we are still seeing optimistic but cautious hiring intentions across the profession in both countries 2 and accordingly we can continue to expect to see strong competition in the quest for the very best legal talent. In such a climate, it s vital to understand the significance of remuneration in attracting the right people to your organisation. Overpaying can be as risky as underpaying. No organisation wants to be represented and staffed by employees who are only there for the money. Salary is just one component albeit a very significant one in an attractive employee value proposition. We hope you will find our Salary & Employment Insights useful. As always, we welcome your feedback. Dean Davidson National Practice Director Legal Executive General Manager, Regional Australia 1 Figures quoted are for Australia and New Zealand combined unless stated otherwise. 2 The Hudson Report, Australia/New Zealand, January March 2012. australia/new zealand LEGAL salary & employment insights 2012 1
about hudson legal Hudson Legal is a specialist practice within Hudson. A recognised leader in recruitment services in Australasia and internationally, Hudson understands the complexities and challenges of recruiting, hiring and managing legal professionals in a global economy. Hudson Legal s team of dedicated specialist consultants are trained to accurately assess your organisation's needs and help you discover exactly what you require for current and future growth. Drawing on personal and online networks, our consultants actively engage with a pool of top talent. Many have qualifications and experience in the legal profession, bringing a close understanding of the qualities needed to succeed. In addition, our range of proprietary tools and specialist talent management and recruitment expertise enables us to match legal professionals with the right culture and role, to ensure you are always building a team geared toward high performance. Working with over 70% of the top 100 asx-listed companies and many of Australia and New Zealand's leading law firms, our strong brand enables us to attract and select the right people to help you grow your business. 2 LEGAL salary & employment insights 2012
around two-thirds (66%) of all survey respondents are considering a change of jobs in 2012. Maximising value: the recruitment imperative Uncertainty is the new norm Uncertain is the word most often used to describe the global economy these days. The combination of sovereign debt issues overseas, volatile financial markets and instability of global equity prices is creating a particularly tough environment for business leaders, organisations and law firms all over the world. Australia is faring far better than many other economies. Although it faces pressure as a result of its strong dollar and so called two-speed economy, it remains relatively buoyant overall thanks to the mining and resources boom, although that seems to be easing. The prevailing mood in the legal sector is one of prudence: hiring intentions are positive but conservative and the pressure is on to do more with less. Nearly a fifth (18%) of hiring managers are under pressure to improve the quality of their hires, over a quarter (27%) are tasked with controlling the cost of hires and more than half (55%) say they are under pressure to do both. In such testing times, the challenge for organisations is not simply to stick to hiring budgets, but to maximise the value achieved from every dollar invested in human capital. The employee perspective The professional workforce on the whole however is on the move around two-thirds (66%) of all survey respondents are considering a change of jobs in 2012. One of the reasons for moving is dissatisfaction with pay. Our research shows nearly two-thirds (63%) of professionals believe they deserve a pay Better working conditions, more flexibility Strong leaders and boss I respect rise in 2012 and around one in five (21%) say they are not adequately remunerated for their contribution in the workplace. Organisations wanting to retain talented employees should note that almost a fifth (19.2%) would be motivated to stay by better career opportunities and 13.5% would stay for a work culture that would make them happier. However the biggest factor cited by well over a third (36.4%) of respondents was an increase in salary. Assuming that respondents are happy with their base annual salary, the survey revealed that the most important benefits for professionals across most sectors are bonuses including short and long term incentives (14.2%), private health insurance (14%), more annual leave (12%) and flexible working arrangements (11%). Which of the following would influence you most to stay in your current role for the next 12 months? Increased salary Better career opportunities Organisational values Work culture that will make me happy More seniority and responsibility than I currently have 0 10 20 30 40 % of respondents australia/new zealand LEGAL salary & employment insights 2012 3
the top three staff benefits offered by employers are flexible working arrangements (19.1%), bonuses (18.9%) and private health insurance (7.5%). the benefits bias Above and beyond base annual salary, the top three staff benefits offered by employers are flexible working arrangements (19.1%), bonuses (18.9%) and private health insurance (7.5%). Base salary remains the single most important means of rewarding employees. Employers without deep pockets might do well to tailor their benefits packages to individual employees since different people have different wants and needs. Hudson research revealed the following reward priorities beyond a competitive salary package: Gen Ys (20 31 yrs) are looking for: bonuses including short and longer term incentives (14.5%), private health insurance (14%) and more annual leave (13.3%). Less than 10% of respondents cited flexible working arrangements as a key element of their reward package. benefits offered as compared to what employees want. Bonuses long term incentives and short term incentives Increased superannuation Private health insurance Income protection insurance Death/disability insurance Increased annual leave (more than standard 20 days) Flexible working arrangements Company motor vehicle Car allowances Gym membership Paid maternity leave (above govt allowance) Paid paternity leave Employers giving Employees want Gen Xs (32 46 yrs) are seeking: private health insurance (14.1%), more annual leave (12.3%) and bonuses including short and longer term incentives (14.4%). Baby boomers (47 yrs+) want: increased superannuation contributions (15.5%), private health insurance (14.8%), bonuses including short and longer term incentives (13.5%) and flexible working arrangements (10.6%). Others 0 5 10 15 20 % of respondents 4 LEGAL salary & employment insights 2012
market trends The industry is undergoing a period of rapid structural change, as international firms seek to establish themselves in the local market, and large Australian firms adjust their market positioning to align with international partners. Amidst these changes, those firms which remain independent are focused on offering a unique value proposition, both to clients and to their prospective employees. The ongoing development of resources and infrastructure projects is driving continued growth within these sectors. Despite growth within the broader industry, demand has cooled slightly in the mining sector, as significant projects are delayed due to falling commodity prices and increasing costs. The oil and gas industry, however, remains a key growth industry (particularly in Western Australia and Queensland), where demand for lawyers with skills in both onshore and offshore projects, construction and petroleum contracts remains high. Key trends: Salaries have remained generally stable and becoming more consistent. The disparity in remuneration between top-tier and upper mid-tier, international and boutique firms is disappearing. Despite the strong demand for lawyers with high quality training and experience, firms and organisations are increasingly unwilling to pay a significant premium to attract top talent. Private practice firms are particularly focused on maintaining parity between lateral hires and existing staff, as perceived disparities increase attrition rates and create upward pressure on salaries across the firm. Firms and organisations are also generally unwilling to compromise on technical skills or experience in areas of high demand. Given tight project timeframes and high workloads at senior levels, firms and organisations are increasingly unwilling or unable to invest in training lateral hires who cannot hit the ground running. Construction remains a key area of demand, and candidates with both non-contentious (front-end) and contentious (back-end) experience are highly sought-after. The shortage of candidates within private practice continues to be exacerbated by demand from in-house organisations servicing the infrastructure and resources industries. Construction lawyers are also in demand by these organisations to fill key commercial and contract management roles. As a consequence of the ongoing growth within the construction, resources and infrastructure sectors, demand for employment, industrial relations and occupational health and safety lawyers has soared, as market participants seek specialist legal advice to manage complex blue-collar workforces, labour hire contracts, industrial disputes and serious workplace incidents. australia/new zealand LEGAL salary & employment insights 2012 5
many boutique practices are merging with large international firms. Those which remain, generally pay above market salaries. Despite the downward trend within the financial services sector generally, demand for banking and finance lawyers remains consistent, as Australian and international banks focus on securing high-value, complex deals. Lawyers with project finance experience are particularly sought-after. After a slight decrease in demand during the first half of 2011, demand for litigation (especially insolvency and reconstruction) lawyers has increased significantly. This growth has been fuelled by an increase in disputes and corporate insolvencies arising from the challenging economic conditions facing small to medium enterprise and the manufacturing and industrial sectors. Similarly, demand for insurance litigation lawyers remains high, however candidates can expect salaries to remain stable, with continuing downward pressure on fees by large insurers and consequent profit squeeze on specialist defendant insurance practices. As a result of continuing uncertainty in Europe, there remains a consistent flow of mid to senior level lawyers returning to Australia with valuable experience in corporate and commercial law including M&A and private equity financing deals. Such professionals are highly sought-after, particularly by top-tier law firms. Demand for high quality corporate/ M&A lawyers generally remains stable, however with the downturn in transactional activity during late 2011 and the first half of 2012, candidates who do not have blue chip experience with leading Australian or international firms may find it more difficult to secure a role. Demand for property and development lawyers has generally increased, particularly at Senior Associate-level, however environment and planning has cooled significantly within private practice. Environment and planning lawyers seeking to pursue an alternative career pathway may, however, find their skills in demand within the resources sector, particularly within the project approvals, land access and environmental compliance spaces. Across the board, in-house salaries are stable and demand remains strong for lawyers with five to eight years post qualification experience. Increasing numbers of firms are introducing (or reintroducing) Associate-level as a stepping stone between lawyer and Senior Associatelevel, or retitling lawyers as Associates for consistency with international partner firms. 6 LEGAL salary & employment insights 2012
most law firms and in-house legal teams prioritise quality over cost when it comes to recruiting. Salary expectations are very high at junior levels: less senior lawyers continue to have high salary expectations. This is particularly evident among those with three to four years post qualification experience who frequently seek salaries of up to $110 130K, a figure well above the typical market rate. Formal bonus and incentives schemes are becoming more common, particularly at Senior Associate-level and above. Many legal professionals at mid-level and above are negotiating remuneration packages incorporating a definitive bonus component, rather than the discretionary bonuses which have been common in the past and we expect this trend to increase in 2012 2013. An increasing number of firms and organisations are providing additional (non-financial) incentives, including gym memberships, smart phones etc. In general, most law firms and/or in-house legal teams prioritise quality over cost when it comes to recruiting. Organisations are digging deeper: firms are also embedding new elements in their reference and background checking procedures to understand more fully the technical skills and potential cultural fit of new hires. Clients value specialist local knowledge: independent local firms remain the preferred choice for some clients, particularly in the resources sector where top-tier firms compete against local practices with profound industry knowledge. Are you concerned about losing high performing employees in 2012? 33% Employers are scrutinising potential employees more carefully, with an increasing number of firms introducing psychometric testing as a standard part of the recruitment process for mid to senior level appointments. Yes No 67% australia/new zealand LEGAL salary & employment insights 2012 7
Most in-demand roles and skills Lawyers with energy and resources expertise Construction lawyers, both those with contentious and non-contentious experience Easing demand for Corporate lawyers in Victoria and New South Wales Environment and planning lawyers Mid to senior level lawyers with uk experience (particularly in M&A and private equity financing in the mining states) Lawyers with strong commercial experience including litigation skills Insurance lawyers with defendant professional indemnity, public liability and product liability experience Insolvency specialists Lawyers with experience in protecting intellectual property Technology specialists, particularly those with experience in corporate and government IT and telecommunications contracting Lawyers with experience in workplace relations including occupational health and safety We developed Hudson Legal Salary & Employment Insights with the aim of providing clients and candidates with the most up-to-date industry insight and advice. If you would like to find out more about how Hudson can help you source, manage and retain the best talent for your business, please contact: marketinginsights@hudson.com Alternatively, if you are considering looking for a new role, let us help you find an employer who will recognise and appropriately reward you. Please contact your nearest Hudson office to arrange a confidential discussion with one of our legal recruitment specialists. We look forward to working with you. 8 LEGAL salary & employment insights 2012
salary tables
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act nsw QLD vic WA TOP TIER ANNUAL SALARY 2012 AUD '000 0 1 year PQE 60 75 70 80 60 70 70 80 72 78 1 2 years PQE 75 85 77 92 65 80 77 90 76 88 2 3 years PQE 80 90 88 100 75 90 82 98 84 96 3 4 years PQE 90 105 90 115 80 100 90 110 90 105 4 5 years PQE 100 110 105 135 90 120 100 130 106 128 5 6 years PQE Not SA 110 120 110 140 110 140 115 140 115 135 sa1 105 120 140 160 120 150 130 155 138 165 SA2 120 135 140 175 130 160 135 160 140 162 sa3 135 160 160 190 140 180 145 185 160 185 sa4/special Counsel 150 200 170 290 150 250 180 270 200 270 Salaried Partner 200+ 300+ 250+ 300+ 300+ MID TIER 0 1 year PQE 60 70 65 75 55 70 65 75 63 72 1 2 years PQE 70 80 68 89 65 75 68 85 71 84 2 3 years PQE 80 90 73 95 70 90 73 92 80 90 3 4 years PQE 90 100 80 105 75 100 80 105 85 105 4 5 years PQE 95 105 92 125 85 105 90 120 102 125 5 6 years PQE Not SA 105 115 100 135 100 120 100 130 108 130 sa1 110 120 110 140 110 130 115 135 120 155 SA2 115 125 115 150 120 160 115 145 118 140 sa3 120 140 130 175 130 180 125 175 135 178 australia LEGAL salary & employment insights 2012 11
act nsw QLD vic WA MID tier (cont.) ANNUAL SALARY 2012 AUD '000 sa4/special Counsel 135 175 140 240 150 220 150 220 160 200 Salaried Partner 180+ 200+ 200+ 200+ 200+ BOUTIQUE 0 1 year PQE 40 55 45 70 40 60 50 60 60 82 1 2 years PQE 50 65 50 80 50 70 60 70 70 94 2 3 years PQE 65 80 60 85 55 75 65 85 80 100 3 4 years PQE 75 90 77 99 70 85 72 95 90 112 4 5 years PQE 85 100 88 120 80 100 80 110 110 135 5 6 years PQE 90 110 90 125 85 105 85 115 110 140 sa1 100 115 100 145 90 110 95 120 130 160 SA2 110 120 110 150 100 120 105 130 130 165 sa3 115 140 120 165 120 150 110 160 145 190 sa4/special Counsel 140 180 125 220 130 200 120 180 170 200 Salaried Partner 150+ 150+ 140+ 145 300+ 150 300+ IN-hOUSE (GENERAL) 0 1 yrs PAE/PQE 50 60 65 78 55 65 60 75 60 80 1 2 yrs PAE/PQE 55 75 75 89 65 80 72 90 75 100 2 3 yrs PAE/PQE 70 100 85 112 70 100 85 105 85 115 3 4 yrs PAE/PQE 90 120 90 125 80 120 90 125 100 115 4 5 yrs PAE/PQE 110 120 105 145 100 150 100 135 110 140 5 6 yrs PAE/PQE 120 140 115 150 120 180 110 148 120 160 6+ yrs PAE/PQE 135 150 130 220 130 200 130 200 140 250 12 LEGAL salary & employment insights 2012
act nsw QLD vic WA IN-hOUSE (GENERAL) (cont.) ANNUAL SALARY 2012 AUD '000 Deputy General Counsel 145 170 150 270 180 240 160 240 140 260 General Counsel 200+ 180 300+ 250 400 190 300+ 180 300+ government QLD government act nsw PO3 67 74 0 1 yrs PAE/PQE 45 60 50 65 po4 78 88 1 2 yrs PAE/PQE 60 80 65 80 po5 88 85 po6 97 103 so1 115 120 so2 105 110 ses1 105 120 ses2 129 146 ses3 148 173 2 3 yrs PAE/PQE 80 90 75 85 3 4 yrs PAE/PQE 85 95 80 90 4 5 yrs PAE/PQE 90 105 85 100 5 6 yrs PAE/PQE 95 130 100 120 6 10 yrs PAE/PQE 110 140 120 140 ses1 6 140 250 145 280 ses4 179 189 government vic VPS1 37 39 vps2 41 52 vps3 54 65 vps4 66 75 vps5 76 92 vps6 94 125 Senior Technical Specialist 7 127 173 All Government figures above are exclusive of super. Please note: Salary ranges are based on information provided by Hudson clients, candidates and other sources and as a result are approximate guides only. They relate to base salaries including superannuation but do not include things like bonus/incentive schemes/stock options. Further they incorporate placements across both small to medium companies (defined as having a turnover of less than $100 million) and large companies (defined as having a turnover of more than $100 million). Roles marked. For non-government roles, they indicate insufficient placement data to represent the market adequately. australia LEGAL salary & employment insights 2012 13
research methodology Hudson conducted quantitative research into salary and employment insights of employers and employees across Australia and New Zealand. In addition to the responses collected and analysed, we also drew on placement data across the first half of 2012. Qualitative information was gathered by our specialist recruitment consultants through conversations with their clients, and by drawing on their extensive knowledge of placements made across the Hudson Legal Practice. A total of 5,563 employers and 5,748 employees across Australia and New Zealand were sourced from the Hudson database, and interviewed online regarding their experiences and views on salary and employment expectations and key issues. Employers and employees each received distinct survey questions. totals All Legal employers 5,563 All Legal employees 5,748 Additional client survey (extra questions) 204 14 LEGAL salary & employment insights 2012
hudson's thought leadership program As an industry thought leader, Hudson produces a wide variety of white papers, conducts specialist forums and regularly contributes to media on HR and employment trends. Here s a selection of some of the research we produced last year. If you wish to register for a copy of this year s research, please visit au.hudson.com/thought-leadership or nz.hudson.com/thought-leadership the hudson 20:20 series the hudson Industry Leaders Series The Hudson report The Hudson Report details employment trends and is a key economic indicator gauging employer sentiment across the nation. Our renowned quarterly employment survey evaluates the job market and reports on job projections by industry in each region. For details, see au.hudson.com/hudson-report or nz.hudson.com/hudson-report Released annually, the Hudson 20:20 Series is Hudson's flagship research publication. The white paper series investigates talent management issues that have critical impact on business performance. Last year s Hudson 20:20 Series asked the question of how and why current recruitment procedures are failing organisations and recommendations for the ways they can be improved. The report also contained new research findings from Hudson that demonstrated how current hiring practices are impacting on organisations quality hires and offers practical solutions for improvement. To view the report visit au.hudson.com/hudson-2020 or nz.hudson.com/hudson-2020 Hudson s A&F and ICT Industry Leaders Series delved into the key skills-related issues facing professions today. They each brought together C-suite executives from across Australia and New Zealand in business roundtables to discuss and gain an insight into what is influencing their profession. To access the report go to au.hudson.com/ils or nz.hudson.com/ils australia LEGAL salary & employment insights 2012 15
contact us To discuss the Salary & Employment Insights or your recruitment needs in more detail, please contact your Hudson recruitment consultant or email us on marketinginsights@hudson.com Adelaide +61 8 8223 8800 Auckland +64 9 977 9800 Brisbane +61 7 3258 8333 Canberra +61 2 6229 1555 Christchurch +64 3 977 8500 Newcastle +61 2 4927 2220 Greater Western Sydney +61 2 8836 0222 Melbourne +61 3 9623 6666 Mount Waverley +61 3 9535 8222 Perth +61 8 9323 0222 Sydney +61 2 8233 2222 Wellington +64 4 917 9200 au.hudson.com nz.hudson.com