What a crazy time it has been for our good friends down under!
Over the course of the past five years, with the often-turbulent global financial conditions of the country, the Australian legal market has surprisingly seen an increase in revenue.
Whilst the COVID-19 pandemic did put a halt to the upward trajectory of the industry, with a decrease of 8.1% in revenue in 2019-2020, the Australian legal market has been relatively unscathed by the impact of the pandemic, flaunting an increase in work, unlike some of their other counterparts.
If we were to compare, by billable hours, Australia’s demand for legal services with another major global economic powerhouse, the likes of the US for example, Australia has handled the pandemic better than others. Australia averaged a 6.2% increase in demand for legal services, whilst the US recorded a 5.9% decrease over the same period. The demand for legal services in Australia finished the financial year 2020 in a positive state, despite fluctuating business conditions, the rise in price-sensitive clients and a weak growth in household incomes. A baffling outcome given the circumstances in which the nation found itself 24 months ago. These encouraging signs were further reinforced by an average growth of 2.2% in demand for law firms, as well as profits as a percentage of revenue, climbing to a record 36.8% for the financial year 2021.
Yet, this does not mean that Australia has escaped the worst of the pandemic. With the new Delta variant sweeping the nation and a relatively slow roll out of the vaccination, a surge in cases has meant that cities like Sydney, Melbourne and Brisbane have been forced into a new series of lockdowns, begging the question of how Australian law firms will adapt to what most would now consider to be the new norm unfortunately.
The highly regarded and well-renowned Big Six firms in Australia (Allens Linklaters, Herbert Smith Freehills, Ashurst, King & Wood Mallesons, Clayton Utz and Minter Ellison) have continued to secure high-profile mandates across the key practice areas, acting as the major players in the legal market. With the demand for M&A, banking & finance and general corporate work remaining steady, if not increasing, it is no surprise then that these titans continue to dominate the legal market in Australia.
So, what remains for the other firms beneath these heavyweights?
Given their previous solid years and reputation in Australia, the likes of Corrs Chambers Westgarth and Gilbert + Tobin maintain a presence in the legal market. The same goes for other top tier international firms who utilise their global networks to act on matters across Asia-Pacific.
Time will tell whether this will remain the case, but it is evident that the next 12-24 months will be crucial for law firms in shaping the Australian legal market.
If you are a Lawyer who is looking to potentially make a move to one of these top tier firms and wishes to explore the Australian legal market, contact William Whiteside Lopez at email@example.com to hear more about the opportunities available to you.