Aussie firms feel bite as pay rates outstrip growth

Australia's top-tier law firms reported only minimal growth in turnover during 2004-05, at the same time as pressure increased for firms to bolster remuneration packages in order to retain staff.

According to the latest Australian Legal Business (ALB) law firm fee survey, Australian giant Minter Ellison suffered a small drop in turnover during the 2004-05 financial year, while Blake Dawson Waldron, Freehills and Mallesons Stephen Jaques all reported increases under 5 per cent.

Minter Ellison still managed to place third in the tables based on gross revenues after reporting a turnover of A$405m (£174.7m), trailing first-placed Mallesons with a turnover of A$445m (£191.9m) and second-placed Freehills with revenues of A$417.8m (£180.2m).

However, Melbourne boutique Arnold Bloch Leibler topped the tables based on fees per lawyer, with each of its 65 lawyers billing an average of A$615,000 (£265,200) last year.

The middle tier enjoyed the strongest growth, with firms benefiting from aggressive growth strategies in terms of lateral hires and new office openings, although this also affected profits negatively.

Legal recruitment has been busy in the last 12 months, according to the latest Mahlab Recruitment salary survey, with the highest amount of movement comprising departures from top-tier to mid-tier firms. Movement from private practice to the corporate sector and overseas was also active.

Nationally, demand outstripped supply, but this did not result in the expected high salary increases across the board. Instead, many firms used pay rises as an active part of their retention strategies where performance warranted this.

Private practice salaries rose 8 per cent nationally, compared with an average increase in salaries of 5.9 per cent within the corporate sector and a 5.5 per cent increase for company secretaries.