Good lawyers are increasingly hard to find with demand set to grow. However, recent research uncovers that many firms may be under-utilising key tools & strategies available to attract top talent. Salaries have remained flat despite obvious, and continuing, high demand for quality personnel.
These are among the top findings of the 2019 Australasian Legal Practice Management Association (ALPMA) /McLeod DuminyNZ Legal Industry Salary & HR Issues Survey, which drew a range of views from 100 New Zealand law firms across the country. These firms employ 2714 people in more than 40 different roles.
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The fact that three-quarters of firms (77%) intend to recruit and grow fee earner numbers is an indication of a buoyant industry. “Yet, at the same time, finding and retaining good staff is recorded as the number one challenge for 94 percent of respondents.
Expectations for employment growth will continue to be strong in 2019. Overall employment in New Zealand is forecast to grow by 2.3 percent and 53 percent of the legal firms who responded to the survey expect to increase the number of staff they employ in 2019, likely to be driven by mid-tier firms.
“Competition for talent is expected to persist, so it’s not surprising to see 94 percent of firms indicating they struggle with talent recruitment and acquisition, while 91 percent continue to rate employee retention and talent management a top HR challenge,” says Sheryll Carey, ALPMA NZ Chair and General Manager at Lowndes Jordan.
“Given the demand for employees and a static period for wages over the last handful of years, we were expecting an adjustment upwards this year, which hasn’t happened. This creates an obvious opportunity for those who are serious about attracting the best: with supply limited, you need to attract people from other roles and attractive salaries are one way to do that. Most firms we talk to will say that they pay ‘market rate’ or ‘top of market’. Perhaps the ‘market’ has shifted and is demanding more,” adds Spears.
Remuneration, however, is only part of the story; a top package is only attractive if the right individual is made aware of it. Spears says it is another opportunity missed that the percentage of law firms which lack any recruitment strategy has stayed constant at 45 percent. “Without a strategy, you’re probably missing out on the best people,” she notes.
Furthermore, the survey shows that just 15 percent of firms have a pro-active sourcing strategy, plus a decrease in the number of firms using recruitment referral bonuses.
“And the benefits that might make a firm more attractive or help retain staff remain uninspiring, with few firms doing much out of the ordinary, particularly when compared with other professions and law firms overseas,” she adds.
Need For Creativity
For example, Spears says just 14 percent of firms offer benefits over government requirements; for half of those that do, this is limited to extended unpaid parental leave. “We know our candidates value additional leave, so being creative with how employees might be eligible for, or earn additional leave could be a real point of difference,” adds Spears.
Previously attractive perks like flexible working, a mobile phone and connectivity are no longer seen as benefits and are instead viewed as normal expectations by candidates who, in some cases, see access at home as more a curse than a blessing.
“Three-quarters of New Zealand’s law staff are permanent full-time employees despite the talk around flexible working. And the feedback we receive is that it is still hard for fee-earners, as opposed to support staff, to find part-time positions,” says Spears.
Continuing the trend of the previous three years, employment amongst participating firms increased in 2018 with 51 percent indicating staff levels at their firm grew over the previous 12 months. This rises to 59 percent of mid-tier firms and 57 percent of large firms and is up from 44 percent in 2017.
Staff turnover is consistent at 16 percent, “That’s high for professionals,” Spears says, “and explains why firms are hiring. But it is where they are hiring which is also notable, and the fact that is fee-earners, inferring the ratio to support personnel is increasing. Does that perhaps indicate that fears of tech taking jobs in the legal industry are playing out?”
Employment Expectations High
Expectations for employment growth will continue to be strong in 2019. Overall employment in New Zealand is forecast to grow by 2.3 percent and 53 percent of the legal firms who responded to the survey expect to increase the number of staff they employ in 2019, likely to be driven by mid-tier firms.
Amongst other things occupying the time of HR to be managing the mental health of their employees. Nearly 9 out of 10 firms (87 percent) believe this will be an area of concern for the coming year. It is hard to say whether this has been driven by concerns within firms, or by a focus on mental health issues in the wider community and by the legal profession.
“Offering flexible working conditions is one of the ways firms can support employees to manage their mental health. Unfortunately, from this year’s respondents, we have seen the number of firms offering flexible working conditions decrease to 74 percent in 2019,” notes Carey.
More Women
In a positive sign for gender equality, 50 percent of salaried partner roles were filled by women for the first time in 2019. And, in a big step forward, the proportion of female equity partners has also increased from 16 to 24 percent. “Perhaps even more important because this is where genuine influence and leadership sits,” says Spears.
While women hold nearly three quarters (73 percent) of executive and senior management positions in legal firms in New Zealand. Consistent with 2018, nearly two-thirds (64 percent) of solicitors / lawyers are female.
Finally, Spears is pleased with the range of responses received in this year’s survey. “It’s great that 40 percent of our respondents come from outside the three main cities, with 57 percent employing less than 25 employees and 36 percent less than 75. This is where most lawyers actually work and, in this survey, we’ve got a picture beyond the larger, Auckland-centric firms,” she concludes.
