Employee retention strategies a priority as 53 percent of Australian legal firms plan for growth in 2019
The 2019 ALPMA Australian Legal Industry Salary & HR Issues Survey reveals that, in addition to employment projections remaining positive (53% of law firms expecting to grow employment at their firms in 2019, compared with 42% in 2018), salaries have increased for most roles across the legal industry within Australia. In 2019,76% of employees are also likely to receive a CPI or above increase, with a further 79% of firms offering bonuses this year.
312 law firms across Australia provided information on salaries paid for 70+ legal positions (from Managing Partners, Lawyers and Graduates through to executive management, legal operations and administration roles), expected pay increases, employment structures and the key HR issues keeping law firm leaders awake at night. In addition to providing salary tables based on firm size, location and practice area new this year is an additional breakdown of salary data by location – capital city/regional – addressing the question of how much more do CBD lawyers receive and does it off set the lack of work-life balance that may be afforded to the more regional lawyers.
“In relation to salaries, it is particularly good news for those working in West Australia law firms with 25-74 staff seeing the highest salaries,” said Emma Elliott, General Manager, ALPMA. “This might be an attraction and retention strategy that WA firms are having to use given their location”.
With staff turnover rates remaining relatively consistent to prior years at 21% for lawyers and 26% for admin/support roles, Retention/Talent Management Strategies is not surprisingly identified as the top key challenge for legal firms, followed by providing regular feedback and mentoring & coaching, which are new entries on the HR challenges list in 2019. Other emerging issues in 2019 are managing mental health and managing innovation and change management.
“Given the shortage of top talent in the legal industry, focusing efforts on retaining current staff always makes commercial sense,” said Ms Elliott, “I’d also urge law firms to have quite a robust training (or retraining) program in place to equip their lawyers with the skillset they need in the future.”
Despite the industry being dominated by females, with 65% of all positions held by women, gender inequality remains an issue, with 40% of respondents believing there is a gender pay gap in the industry and continued under-representation by women amongst law firm partner ranks. While 58% of lawyers are female and women dominate all legal operational positions, they represent only 19% of equity partners and 38% of salaried partners at Australian law firms covered by the survey.
“The perception of a gender pay gap is clear,” said Ms Elliott, “but while 40% of respondents believe there is a gender pay gap, 85% of respondents said there wasn’t one at their firm. 21% of respondents conducted a pay gap analysis in 2018 with mixed results, so there is clearly much work still to be done to understand this issue within legal firms.”
Of the 21% of respondents who conducted a pay gap analysis, 76% found there was no gender pay gap, while 24% found there was, with gaps ranging from 1% to 20+%. Law firms with 75-149 staff were most likely to find gaps of between 1-5% (22%) or gaps greater than 20% (22%). Firms with 150+ employees were most likely to find gaps between 6-10% (25%) with 50% of results finding no gaps.
“It seems that the smaller firms of 1-24 employees found the least gender pay gaps, with 94% finding no gaps at all,” said Ms Elliott.
Only 18% of law firms have formal diversity and inclusion programs in place with work-life flexibility, gender equality and gender equality the most likely provisions to be included. Larger firms are more likely to have a formal diversity program and generally consider this to be a priority. Smaller Australian law firms generally lack the required staff to implement a formal diversity policy, do not have employees experienced in this field or do not consider this to be a major priority.
“However, direct feedback from many law firms indicated that employment of new staff was based on merit, and that their firm was culturally and ethically-diverse through informal policies,” said Ms Elliott.
Almost one-third (32%) of legal firms in Australia provide paid parental leave entitlements over and above government schemes to the primary care giver. The most common time period provided is 11 to 14 weeks, with almost half (48%) providing paid parental leave in excess of 11 weeks. Two out of 10 respondent law firms (21%) also provide additional parental leave to non-primary care givers, with most (89%) providing one or two weeks.
“Given the proportion of females within the legal industry I’m surprised by the lack of paid parental leave policies in place at Australian law firms, that go over and above government entitlements. This is a clear attraction and recruitment strategy that is being overlooked by 68% of firms. This could easily set firms apart and give them a competitive edge in the war on talent” said Ms Elliott.
Most firms offer flexible working arrangements with between 73-100% offering flexible working hours. Overall the report showed that permanent part-time positions largely remain stable again this year at around 20% of the opportunities on offer. Not surprisingly law firms with over 150 employees are leading the way and have the most alternate employment arrangements with only 65% of their staff employed on permanent fulltime arrangements. 19% are permanent part-time with a further 8% on contracted/temporary full-time arrangements.
“In today’s legal landscape this flexibility of hours worked is almost a necessity however it doesn’t seem to have translated overall into more flexible working arrangements on an employment front,” said Ms Elliott.
There was little movement in fee earner ratios in 2018, with Australian law firms employing 1.45 fee earners for every non-fee earner which was down slightly from 1.52 in 2017. Secretarial support is also servicing a decreasing number of fee earners with support ratios reported at 2.73.
“Staffing ratios are not surprising this year and could be a reflection of a market shortage of experienced lawyers,” said Ms Elliott.
For more information about the ALPMA Australian Legal Industry Salary & HR Issues survey and to purchase the report, visit https://www.alpma.com.au/Research/salary-survey/index.html