Why business is booming for law firms

“I thought I’d stay for a few years, then all of a sudden you wake up and it’s 30 years later!” says Andrew Pike, Australia Regional Managing Partner at law firm Herbert Smith Freehills, a new entrant to LinkedIn’s Top Companies 2019 list and one of three legal giants included (alongside MinterEllison and Allens).

Having worked in the sector for the past 28 years (21 as a partner), Pike is well positioned to explain why law firms are increasingly attractive workplaces. “My thinking was, ‘Give law a go,’” says Pike of his own career after studying law and business. “I’d stay for a couple of years and see how it goes, and I just found great work, great people and lots of growth.

“That’s a big theme for me over my career, and one of the reasons I’m in the role I’m in now — you can make a career with multiple different careers within the one organisation, and for me that’s a really important part of what we’re about.”

From a global headcount of 4,957, Herbert Smith Freehills has 1,739 employees in Australia across five offices. It is one of the biggest employers of law graduates, recruiting 89 last year and 95 this year. MinterEllison took on 120 graduates this year; the firm has 2000 staff in their Australian offices, located in every capital city, and another 250 staff across Hong Kong, Beijing, Shanghai, Ulaanbaatar and London. Allens hired 98 graduates this year and has a total Australian headcount of 1,442 people.

Australia’s law graduate numbers have always been strong, says Pike, but one of the reasons there’s increased demand now to work at big firms is because there’s ample work, particularly in regulatory areas. “Across the board there’s large demand in M&A [mergers and acquisitions] and employment work and all sorts of law,” Pike explains.

“When you look at the overall legal system that we operate in, we’re external lawyers, most of the clients we work for have in-house legal teams, and there’s been significant growth in those in-house legal teams. Why is that? Because things like the [Financial Services] Royal Commission have shone a light on the fact that there is a need for good governance and controls and people making sure there’s discipline in the legal-related fields within an organisation. That has contributed to the overall growth in lawyers.”

Jane Lewis, Allens’ chief people officer (left), cites several factors that are influencing growth in law firms, from technology to regulatory changes.

“From a general perspective, law firms have been growing underpinned by a generally strong and stable economy by global standards,” says Lewis. “Obviously there’s been the pattern of Royal Commissions and the subsequent regulator action falling out of that, and in some states, there’s been state-based infrastructure development, and then obviously the impact of technology and data security.”

Allens even acknowledges this explicitly with the staff email signature: “Shaping the future with confidence, your business post-Financial Services Royal Commission,” it reads.

“There’s certainly nothing that tracks that growth specifically as compared to other sources of growth, but definitely the Royal Commission in and of itself created a lot of work, and then the subsequent regulator action and what that will mean going forward will continue to create work in the disputes and regulatory space,” says Lewis.

MinterEllison’s chief talent officer, Mary Lyras (above), believes the legal services sector in Australia has grown for various reasons. “Firstly, a more complex regulatory environment, whether it’s anti-money laundering, whether it’s privacy, whistleblower legislation, there’s a whole lot of legislative changes that fuel a lot of work that requires legal work,” says Lyras. “The property sector, the infrastructure, yes, there’s a huge boom going on right now in New South Wales — those things ebb and flow and right now we’re at a peak.”

Australia’s property boom has also contributed to the demand for more lawyers, especially those working in cross-border contracts. Pike says HSF works more in the commercial rather than residential sector, but even at that end, they have seen a lot of money flowing into real estate — in a low interest rate environment, people chase higher returns which has led to an increase in development. A lot of the capital flowing into Australia is from overseas, says Pike, because our “very safe, generally certain regulatory environment” attracts investment.

Lyras says there’s always room for a lawyer, at any stage of the economic cycle, but that doesn’t mean the profession has job security. “There’s lots of work, but there’s more uncertainty because you’re only as good as your work if clients re-engage you,” she explains.

“In the legal sector, you’ve got to be able to win work, each and every day, and you do that based on your reputation and the quality of the team that you’re putting in front of your clients. That sounds like a lot of investment in people — it’s absolutely critical because that’s who you’re putting in front of clients and that’s who enables us to win more work.” 

To get an offer at MinterEllison, graduates must pass multiple interviews with partners and psychometric tests to determine culture fit. “We know the sort of qualities that will lead to success here: curiosity, ability to work with others, courage to think differently,” says Lyras. “A philosophy that I have is ‘it’s the right place, for the right person, at the right time.’ The person could be brilliant, but they may not succeed in the environment at that point in time. That’s what we spend a lot of time in the interviews on."

MinterEllison prides itself on a move towards what it calls “tailored” careers that allow graduates greater flexibility to find their niche. This could mean overseas postings — to London and Mongolia, and soon Hong Kong — or enabling staff to work pro-bono with various community partners.

The brand of a big law firm is a drawcard for many graduates, says Lewis.

“We have a strong brand as an employer; we’re ranked the number-one law firm for 2018 and 2019 by Graduate Australia, we’re ranked in the AFR’s top 100 innovative companies in Australia, we’ve been recognised for over a decade as an employer of choice for women. I think all of those sorts of external credentials give people confidence.” Another factor attracting talent to Allens is its global alliance with Linklaters, which began in 2012 — it is the only Australian law firm to have an alliance with a “Magic Circle” firm, a term for the five most prestigious London-headquartered multinational law firms.

Australian graduates are attracted to top tier law firms because even if they decide they don’t want to be lawyers, Lyras says they’ve gained skills that position them as highly employable anywhere. “It’s a place that really delivers good training and development and people can see that career paths can open up for them,” she says of MinterEllison. Those who do leave MinterEllison tend to move to legal positions in-house or to the Bar, with a small number joining competitors.

Pike agrees that many graduates think of it as a stepping stone. “People are seeing it as a very good first step, being quite open with you. It’s a good grounding not just in law but in business and the way in which people operate. We like to have all of our people stay for a long time and become partners etcetera but we’re very open to the fact that many will want to stay with us for four, five or 10 years then step into another career.”

Pike disagrees with former Prime Minister Malcolm Turnbull’s comments in 2018 that Australian students shouldn’t study law unless they want to be lawyers.

“I think the study of law is a great discipline in terms of the thought process, the relationship-building skills, the ethical underpinning to it all,” says Pike. “It’s a good base degree. I look at where a lot of our alumni have ended up and the skills they use — a lot of those basic legal skills, they’re using in professions everywhere.”

Did you study law and stay in the profession or use it as a stepping stone to another career? Share your story below.