In last year’s legal remuneration report, in our outlook for the coming years in legal remuneration, we stated: “While the last few years the legal landscape has witnessed a resurgence of opportunities within private practice firms, showcasing the sector’s resilience despite the challenging economic backdrop. As of 2023 looking out to 2024, these opportunities have largely dried up. There will always be an attractive opportunity for those with a book of business but for many, legal opportunities are unavailable. Moreover, with many attorneys not meeting targets, they simply do not have the billable records to necessitate the roles and salaries they are after.” This was absolutely 100% correct. Reflecting upon this year’s many hundreds of face-to-face interviews we conducted, one thing that jumped out at us, that we had not really seen on such a scale before, is the number of Attorneys, at all levels of experience, in both practice and in-house – that have side hustles. Senior Attorneys’ have often had other business interests or board appointments, but our field research showed that this is becoming more and more prevalent in younger legal professionals as well. From sponsored podcasts to clothing lines to YouTube channels and much more, the fulfilling side hustle is becoming a staple of young Attorneys’ lives across SA.
Legal Practice
The combination of a slowdown in the M&A and Corporate Finance markets, and the inflexibility (until now) in some billing structures, we believe will lead to salaries not increasing much at all – in law firms, we are predicting a max, of 1-3% remuneration increase on average. Recently there was a paper released, supporting a minimum wage for CA’s, whilst many have supported this, there has been little understanding for small law firms who may not be able to afford any increase. The more pressure that is put on the law firm’s bottom line, the more pressure there will be on lawyers, at all levels, to bring in work – which is the complete opposite of where the industry should be heading it should be encouraging technical brilliance. In the US, we are now seeing more and more firms incentivize Associates to get new clients, and if we are not careful, this will happen here. Why is that a bad thing? Because if the focus is more on the sale and less on the delivery, clients will start looking for alternatives.
In-House Counsel
We recently conducted a straw poll of General Counsels, and 70% of those surveyed said their biggest pressure, as in-house counsel, was on reducing costs associated with using external law firms. This has always been the case and is not always because things are considered too expensive, it might simply be the regular pressures department heads get from the board to control costs. But we did think that it was noteworthy that there was a very high percentage of GCs putting this as their biggest challenge. Other challenges were the quality of talent available and which technology to install. We’ve seen a small increase in remuneration packages this year, with more details below. We are not expecting a huge difference in the volume of roles or changes in remuneration in the coming year across all industries – the main reason is there is never a shortage of people that will go in-house, so whilst our clients complain they can’t always get the right talent, there is never a shortage of actual talent.
ALSP
The Alternative Legal Service Provider market is growing. Why? Because SA is very popular as a BPO. This will continue. What the longevity of this is, what it means for legal professionals’ careers are interesting topics, but law firms have to stop seeing them as a threat (because they are not competing in the same space) and start finding smart ways to work together.
Compiled by Umbiie.com
Read the report below…
