Market Insights – 2022 ALPMA Fluid Legal Salary and HR Issues Survey

During 2021 and into the start of 2022 we have seen another strong year for recruitment in New Zealand. This has been driven by unprecedented client demand for quality recruitment solutions from within the legal industry. While candidates have been scarce, fully exhaustive, and innovative search campaigns have continued to get results for Fluid Legal clients.

The recruitment landscape has been very competitive over the past 12 months with firms battling each other to both to attract new staff and retain their current staff. In a talent short market, the power has somewhat shifted to the employee, and it is not uncommon for top talent to have counter offers to stay from their current employer and multiple offers from law firms looking to secure their talent. It’s therefore not uncommon for firms, recruiting for talent, to now be negotiating with candidates with multiple offers at hand. Fluid Legal have had to work harder than ever to overcome multiple counteroffers for firms, which have become more common than not, and to guide candidates and clients through complex multi-offer scenarios.

From our experience firms who have worked the hardest to position themselves with a strong employer brand in the market, who have been most willing to compromise on the brief, or tweak their recruitment process, have seen the best results. In a market such as this, flexibility coupled with quicker decision-making processes is the key.

The 2022 ALPMA report shows that overall, 64% of firms are expecting to grow their employee staff base in 2022 and 81% are expecting that they will need to hire lawyers (either for replacement or growth requirements) in the coming year. This will continue to create strong demand for these talent short roles and call upon proven talent acquisition strategies across the sector.

Not surprisingly, employee retention is a hot topic within the legal industry and is backed up by this year’s report in which employee retention has been ranked as the second most important HR issue facing law firms for the coming year. This position is also reinforced through numerous colloquial reports from Fluid Legal clients that are stating that keeping talented employees engaged and satisfied within the firm is becoming increasingly challenging.

Furthermore, the New Zealand legal industry is coming up against three consecutive years of pent-up OE demand, most prominent in the 2–5-year PQE demographic, which has already proven to be the most common and challenging level to recruit for domestically. Adding further fuel to the fire is the talent hungry international law firms who are both cashed up and being forwardly aggressive in their pursuit for New Zealand trained talent.

If your law firm is producing well trained lawyers, you should expect that they are being approached regularly by both local and international firms.

A high-quality talent acquisition strategy within the legal industry requires an increased level of sophistication and strategic planning from firms than ever before. According to the ALPMA 2022 report only a quarter of firms have implemented a proactive talent acquisition strategy, but Fluid Legal expect that will increase out if necessity as the lead time to secure suitable talent increases and vacancies sit unfilled for longer due to reactive recruitment practices.

From Fluid Legal’s perspective, partnering with law firms and gaining insights into the firm’s long-term strategic plan gives us the ability to identify and attract suitable talent to meet those objectives on an ongoing basis, and that has become crucial to our ability to deliver.

Our advice to clients is to earmark top performers who you don’t want to lose and put proactive strategies in place to keep them engaged. Equally, flag employees who are potential flight-risks and start to talent pool these roles ahead of time and as extensively as your resources allow, whether that be internally resourced or externally resourced via an agency partner.

In addition, be prepared to invest in external resources (contract lawyers) in high-demand and/or high-risk practice areas for when workflow fluctuates, and ad-hoc opportunities arise. Also keep in contact with quality staff you may lose overseas or to other regions. This low-cost, high-reward strategy that can pay dividends when looking to re-secure their services in the future.

Expedited career progression, coupled with exposure to more challenging work and salary increases have been tools being used by firms to keep employees interested and engaged. Not surprisingly firms are more willing to pay slightly higher salaries to retain quality talent, whereby those employees hold significant value to the firm and would be a significant loss to lose. In conjunction with rising inflation numbers, Fluid Legal suspects that will continue to drive salary growth across all levels and regions in the year to come.

Eden Brown, Managing Consultant – Legal

P: 021 0443607 | E: eden@fluidrecruitment.co.nz | W: www.fluidrecruitment.co.nz