Latest news: Property lawyers ride the wave; Firms going for growth; More work for fewer practices in US

High demand for property lawyers

If you are a mid to senior-level construction or property lawyer in Australia, you are in luck. The latest Quarterly Report from recruitment firm Hays shows that private practice, in-house and government organisations want more lawyers in these fields. The emphasis is on finding candidates “who have come from highly reputable private practice backgrounds and those who have benefited from additional in-house experience, such as secondments or permanent roles”, the report states.

In the same vein, property paralegals are in high demand. According to Hays, the need for construction and property lawyers is unlikely to ease “given current construction and infrastructure projects and the continuous acceleration of certain property markets”. Sydney, especially, is likely to be a hot spot.

In private practice, Hays says the market continues to suffer from skill shortages, causing a lengthy recruitment process as the best candidates are identified and then attracted and recruited. As a result, many employers are considering candidates from interstate, especially in areas such as family and planning and environment legal roles. Some employers are offering flexible work hours in an effort to attract and retain staff. Banking and finance lawyers are also in continuous need in the areas of property finance, project and asset finance.

Australasian firms confident of growth

A new snapshot of Australian law firms reveals that they “cashed up and optimistic for growth”. The findings are from the sixth Financial Performance Benchmarking Study of Australian Law Firms, conducted by the Australasian Legal Practice Management Association (ALPMA) and accounting firm Crowe Horwath. The survey focused on trends in the business of law in the 2015-16 financial year. Key insights from the report include:

• Seventy per cent of all firms surveyed are striving for an average of 10 per cent growth as a result of improved cash flow and financial performance. This was reflected in partner appointments and lateral hires, with 92 per cent of participants expecting to hire in the next year and 36 per cent of practices having specific plans to recruit for growth.
• Firms are investing in technology and digital strategies. About 30 per cent of firms are mainly spending on digital technology solutions such as digital disclosures; client portals and live chat; use of cloud technology; and new practice management systems. This is in line with participant responses in relation to the impact of internal inefficiencies and staff costs on firm profitability.
• Hourly rates are still the norm. The survey results showed that many firms continue to adhere to traditional approaches to financial management, with billing by the hour firmly entrenched as the norm at respondent firms. Various firms were embracing change and innovation to improve financial performance and partner profitability. However, this did not affect the norm of charging hourly rates.

US companies consolidate legal providers

It seems to be a case of fewer firms doing more of the work as corporate clients in the United States seek to consolidate their external legal work. According to the latest LexisNexis CounselLink Enterprise Legal Management- Trends Report, the upshot is that fewer firms are on panels, but they are getting a bigger slice of the legal spending. The report reveals that 62 per cent of companies had 10 or fewer law firms account for at least 80 per cent of their legal spending in 2016. This is up from the 57 per cent recorded in the previous report.

The Lexus-Nexis findings suggest that almost a third of companies 80 per cent to 90 per cent of their legal fees on 10 or fewer firms, while about a third allocate 90 per cent or all of their legal spending into 10 or fewer firms. LexisNexis analysed data from legal departments that process billing information through the company’s CounselLink platform.

The level of legal spending consolidation varies from industry to industry, with companies in retail trade (77 per cent spending at least 80 per cent of legal fees on 10 or fewer firms); information (71 per cent); manufacturing pharmaceutical (70 per cent); and professional, scientific, and technical services (69 per cent) leading the way.