The years 2013 to 2015 were not
good years for law students to graduate. The law graduate job market retracted
at the same time that the number of law students graduating and job hunting
increased significantly. Will 2016 offer improved opportunities for law
graduates trying to get their foot in the door? While the downward trajectory
in legal demand continues, there are some positive signs for graduates trying
to get their first job as a lawyer, particular if law graduates are looking in
the right places. In this blog post I have drawn from my own experiences and
understanding of the legal market as well as the Melbourne Law School and
Thomson Reuters’ Australia: State of the
Legal Market 2015 available here.
Traditional commercial law firms
Demand for commercial legal services
in the Big 8 Firms (Allens, Ashurst, CU, CCW, HSF, KWM, Minters, Norton Rose)
and larger firms has been on a downward trajectory for the past five years and
the trend continues, with demand falling 2% in 2015 and a 3.8% decline in the
number of lawyers employed in commercial legal services. The decline in demand
is particularly prevalent in the industry’s three biggest practice groups –
dispute resolution, banking & finance and general corporate advisory. Some
Big 8 and large firms have continued to use offshore low-cost legal process
operations in places like India for work like discovery, due diligence and
document management services. While some of this work would ordinarily be given
to graduates, most of this work is very basic and is more likely to effect the number
of paralegals and administrative/support staff a firm employs than the number
of graduates.
The outlook is not all doom and
gloom for law graduates seeking a career in commercial law. Large law firms
have been conservative in the number of graduates they have recruited the past
three years, and in some cases, have under recruited. This could lead to an increase
in graduate positions offered in 2016. Demand for legal work in some practice
groups increased in 2015 including:
1. Mergers
& Acquisitions;
In 2015 there was a 2.1% increase
in demand for M&A work. The weaker dollar has caused an increase in international
investment in Australia, as investment is cheaper and there is a reduced risk
of currency fluctuation for bidders. Australia is the second largest M&A region
in the Asia/Pacific, second only to China. There is indication that these
conditions for M&A will continue in 2016. There is potential for even
greater growth in M&A, with the imminent review of the Foreign Investment
Review Board. Large firms will look for graduates who have a keen interest in
M&A, as this is a growth area in an environment where demand in other traditional
areas of commercial law are in the decline.
2. Real
estate, property, constructions and projects;
In 2015 there was a growth in
real estate and projects work, especially among the Big 8 firms.
3. Intellectual
property; and
4. Tax
law.
If you are interested in a career
as a GST lawyer look out for a spike in recruitment if the rumoured GST reforms
take place.
If you have a keen interest
and/or experience in one of these growth areas, you have a stronger chance of
obtaining a graduate position at a large firm. These growth areas could also
lead to large firms engaging in strategic hiring – that is hiring graduates to
settle directly into a team rather than undertaking the traditional rotation
training program. These opportunities will usually be advertised separately to
the ordinary graduate program and sporadically throughout the year, so make
sure you regularly check your target firm’s website. Demand for services of Big
8 and large firms increases significantly in November to December (before the
January slow down). Firms anticipate this and often recruit extra graduates in
September/October. Law graduates applying at this time of the year are usually
required to start work immediately. If you missed out on a position earlier in
the year, or finish half way through 2016 make sure you watch out for these opportunities.
Law graduates keen for a career
in commercial law should also look at medium sized firms that are rapidly
growing such as Mills Oakley and HWL Ebsworth. In the past three years HWL
Ebsworth increased its revenue from $102m to $219m. More growth means more jobs
for graduates. Note that medium sized firms that have seen rapid expansion may
not have had a formal graduate program before, so you will probably experience a
few teething issues, such as less comprehensive formal training than if you were
working as a graduate at a large firm. However, the benefit of working at a
rapidly growing firm is that you will likely be given more responsibility
earlier on and will always have enough work and billable hours. Medium sized
firms are more likely to hire graduates on shorter term contracts, such as 6
months and 12 months, but don’t let this put you off. Any experience in the
legal sector is better than none.
New law
The last two years has seen the
rise of the unconventional law firm, which commonly use technology and pricing
structure to differentiate themselves. Examples of new law firms include
HiveLegal, Nest, LawPath, and LawCentral. New law firms are increasingly seen
as a threat to traditional small and medium sized firms, as they are able to
contain pricing through use of digital solutions. Many are experiencing double digit
growth.
What can these new law firms
offer law graduates? You will be surprised that some new law firms, such as
Legal Vision, regularly recruit graduate lawyers. These positions generally
offer very interesting work and a young, upbeat and relatively relaxed working
environment, so are perfect for law graduates who would like to work in
commercial law but are not so keen on a strict corporate environment.
Government sector
Obtaining a job as a government
lawyer at the Commonwealth level has been difficult the past few years as
graduate programs were cut and an APS freeze was in place on new permanent
ongoing employees. This freeze has now been lifted, so prepare for an increase
in law graduate positions in 2016, particularly at AGS, which has survived its
movement into the Attorney-General’s umbrella and is once again thriving. At
the state level, getting a position as a graduate lawyer has been cut-throat
for some time. For example, NSW Crown Solicitors are rumoured to take on only three
graduates a year. However, the programs remain in place, and are up for grabs. Remember
that government recruitment processes take much longer than private sector, so
start applying at least 6 months before you would like to start a government
job. Formal graduate recruitment programs often recruit 12 months in advance.
In-house lawyers
The trend towards having larger
in-house teams continues and is likely to continue in 2016. Companies are
performing an increased amount of legal work internally, relying less on advice
from external law firms and briefing barristers directly instead of through law
firms. Some in-house teams are large enough to constitute their own law firm
and recruit graduates and junior lawyers. Companies to watch out for include Telstra,
Lend Lease, Woolworths, Coles Myer, Microsoft, Google and Yahoo.
Multi-disciplinary practices (MDPs)
Consultancy and business advisory
firms are expanding their portfolio to include legal. PricewaterhouseCoopers (PwC), KPMG, EY and
Deloitte have all indicated they will grow their legal capacity. Each of these
firms already has over 1,000 lawyers working for them and the numbers continue
to increase. These positions are predominantly in tax advisory law. If you have
an interest in this area, it could be a good alternative to working at a Big 8
law firm.
Community legal sector
Community legal centres have been
under severe financial strain for years, mainly due to government funding cuts.
In December 2014 the Productivity Commission released its Access to Justice Arrangements report. The Productivity Commission
looked at a broad array of factors effecting access to lawyers and legal
services including the level of demand for legal services and the economic and social
impact of the costs of accessing justice services and securing legal
representation. The Productivity Commission recommended an immediate increase
in government funding for legal assistance services of $200 million per year. A
full twelve months after the report was released the Productivity Commission is
still to receive a formal response from the government and the community legal
sector continues to operate on the verge of collapse. Community legal centres
can barely afford to pay their current employees, let alone employ and train graduates.
Law graduates keen for a career in the community legal sector may have to
obtain initial experience elsewhere and volunteer at a community legal centre
until they can work in their dream job full time.
