Aussie associate salaries ‘competitive’ with UK (at least for now)

New salary data shows that lawyers with up to nine years’ PQE in Australia’s major metropolitan cities are raking in remuneration that is starting to rival those based in the United Kingdom — although it may not last.

Taylor Root has released its Law firms salary and benefits Australia report for 2022, detailing the salary bands for lawyers with up to nine years of post-qualification experience (PQE) in the three major cities on Australia’s east coast and in major international jurisdictions, where Aussie lawyers often work internationally.

This year’s report, for the first time, also outlined the key benefits and incentives that are driving talent attraction and retention, in line with the elevated salaries that have been seen in the last 12 months.

It follows an exploration by Lawyers Weekly into whether salaries in Australia’s mid-tier firms have “possibly peaked”.

Taylor Root detailed, in its report, that lawyers with one year of PQE in Sydney, Melbourne and Brisbane could earn anywhere between $72,000 and $105,000 in a mid-tier firm, or between $95,000 and $115,000 in a top-tier or international firm (depending on the city). In UK-based silver circle firms, a lawyer with the same level of experience will earn £100,000 to £123,000, and in magic circle firms, remuneration is from £110,000 to £136,000.

Once an associate reaches four years’ PQE, salaries in the three Australian cities will range from $120,000 to $155,000 at mid-tier firms and $130,000 to $165,000 at top-tiers. This is in contrast to lawyers at the same level in the UK, where one can earn £125,000 to £140,000 at a silver circle firm or £130,000 to £176,000 at a magic circle.

Thus, Australian associates who are at senior associate level are currently reaping remuneration that is almost in line with their UK-based counterparts.

Once they reach senior associate level — that is, approximately six years’ PQE — there appears, at present, to be parity in salaries here and in the UK.

A senior associate in their first year of the role in Sydney, Melbourne and Brisbane can earn up to anywhere between $165,000 to $180,000 at a mid-tier firm, or up to $190,000 to $210,000 at a top-tier or international firm. An associate with six years’ PQE in the UK, by comparison, can earn up to £170,000 at a silver circle firm or up to £200,000 at a magic circle firm.

In conversation with Lawyers Weekly, Taylor Root partner and head of Australia, Hayden Gordine, said that associates with up to nine years’ PQE should interpret the findings such that the “favourable increases” in salaries here in recent times mean that remuneration in Australia is “now competitive with silver circle firm salaries, and in some cases, magic circle salaries, that you’d get in the United Kingdom”.

This said, he added that Australian salaries are “never going to be competitive with, or match”, what a US-based law firm can offer for those working in cities like New York, San Francisco or London. This is evidenced by the substantially higher salaries not just for firms in North America but also US-headquartered firms operating in the UK and other jurisdictions.

Moreover, current remuneration for such professionals in Australia is also nowhere close to salaries being experienced by those in the Middle East or Singapore.

However, Australian-based remuneration is currently comparable with salaries in Hong Kong, both at international and offshore law firms.

When asked if he thinks associate salaries in Australia will continue to increase, or if the current inflated levels of remuneration are a flash in the pan, Mr Gordine determined that they are in fact a flash in the pan.

“I don’t personally think there is a lot more movement in terms of where associate salaries can go in Australia,” he deduced.

“Although the tap is turned off in terms of Australian returnees presently, you would assume that at some point, all of those lawyers will start coming back, which has always been a saviour for the Australian law firm market in terms of experienced candidates coming back into this workforce.”

Ultimately, Mr Gordine surmised, even though salaries for those with between one and nine years of PQE look good now, it is still important — if not essential — for lawyers to ensure they are still demonstrating value, so as to garner the salaries they want and likely expect in a post-pandemic market.

Recently, Lawyers Weekly has also published the following stories pertaining to legal salaries and the market factors driving them:

• Should lawyers take a pay cut for permanent WFH?
• Is it time for firms to publish wage data?
• A looming recession may not impact legal salaries
• Are lawyers ‘quiet quitting’ their jobs?

This article was originally featured on 26 Sept 2022 in Lawyers Weekly