FY20 War for Talent in the Australian Legal Industry

197 partners switched firms in FY20

Highlights from our 'FY20 war for talent in the Australian legal industry' report are visualised below

Our companion report is available for download at the bottom of this page

The COVID-19 pandemic has disrupted the Australian economy with ripple effects that can be seen across all industries. The impact on Australia’s partner movements is apparent in our FY20 analysis of the war for talent in the legal industry, with the 197 partners switching firms last financial year coming in at a five-year low. Our breakdown of partner movements by month in FY20 revealed a drop-off from March 2020 (which coincided with the lock-down rules issued across the country) onward that is much more significant than the previous 5-year average trend (see chart below).

In FY20, 197 partners switched firms, a decrease from the 228 partner moves between firms in FY19. The Sankey diagram below shows where these 197 partners have moved from and to. Use your mouse to explore the data.

Visualising the movements of these partners within Australia’s legal industry identifies how firms are strategising for growth. A deeper dive into the data by practice area in the diagram below reveals that firms have been gearing up for growth in litigation and dispute resolution, banking and finance, employment and workplace relations, mergers and acquisitions, and property and real estate. Hover over, click and drag the discs in the diagram below for more information.

These movement patterns are a good signal of where firms intend to compete in FY20 and FY21, noting that some of these practice areas have been busy throughout the pandemic.

The firms that attracted new partners in FY20

Australian firms attracting the most lateral moves in FY20

One of the fastest growing firms over the last decade, Mills Oakley set the pace in FY20 with 13 lateral partner acquisitions. Another notable gain came from Kingston Reid, a new boutique launched by the former employment and workplace team at K&L Gates launched Kingston Reid. The nine partners involved made it the biggest boutique breakaway of FY20.

The rise of NewLaw firms and alternative legal services companies continued in our FY20 analysis. Keypoint Law was notable in this category, gaining eight consulting principals through the lateral market.

The firms that partners left

Australian firms with the most lateral departures in FY20

Over the last financial year, Norton Rose Fulbright saw the departure of 14 partner-level lawyers to various firms. K&L Gates' employment and workplace team departed to launch Kingston Reid, making it the biggest boutique breakaway of FY20.

Departures from PwC Legal ranked in the Top 10 of our analysis for the first time in FY20. The most notable loss for PwC was Mark Pistilli, who stepped into the Chief Executive Officer role at Gadens. Prior to joining PwC Legal as a partner in 2016, Mark was Managing Partner at Chang, Pistilli & Simmons, which merged into Clifford Chance in 2011.

Analysing partner moves by gender identified that firm changes by female partners accounted for 34.5% of partner moves in FY20, which roughly aligns with the gender split of Australian law firm partners where only 28.5% of Australia’s 50 largest law firms are female.

Our analysis of year-on-year changes to partner move numbers, however, reveals a 20% reduction in moves by female partners between FY19 and FY20, compared to a 10% reduction in moves by male partners for the same period.

Explore partner moves by gender by clicking the coloured areas of the charts below.

Firms have used the lateral market to build new practices. Mills Oakley has expanded into new areas of work including digital law, and the legal market has attracted accounting firm Moore Stephens, which recruited a Dentons corporate partner to launch its legal practice.

This year’s research also revealed an emerging trend whereby some firms are beginning to build diversified practices. These firms poached partners in advisory services around business consulting (Sparke Helmore Consulting), defence and commercial advisory (McCullough Robertson), governance (Ashurst and MinterEllison), legal operations (Lander & Rogers), risk advisory (Ashurst and Norton Rose Fulbright) and technology consulting (MinterEllison).

Breaking down partner movements by strategic group reveals that globalisation continued to shape the legal landscape in Australia in FY20, with 19 international law firms gaining 58 partners through the lateral market. Baker McKenzie was the most active, acquiring three mergers and acquisitions partners, two banking and finance partners, and one partner in each of its competition, consumer and trade practices, energy and resources, and intellectual property teams.

FY20 also marked the entry of another international firm to the Australian market, as boutique San Francisco firm Rimon Law opened its office with a capital markets partner in Sydney.

The continued rise of NewLaw firms and alternative legal services companies continues in this year’s analysis. NewLaw firm, Keypoint Law sets the pace by adding law firm partners to its ranks, gaining eight consulting principals through the lateral market. Nexus Law Group, meanwhile, expanded its footprint into the Adelaide market with the lateral hire of a wills and estate planning lawyer.

The trend towards team acquisition has also shaped the war for talent in the Australian legal industry in FY20. Forty-one partners switched firms as part of a team of lawyers, making this the highest number of partners to move across with their team since Alpha Creates began tracking this data in FY16.

Mills Oakley and Thomson Geer are the two firms that have consistently recorded team acquisitions over the last 5 financial years. This trend has continued into FY21, as observed by Thomson Geer’s recent acquisition of Dentons’ Brisbane team and DLA Piper’s Perth corporate team. Team acquisitions have made the transition easier for new partners at their destination firms, as they can hit the ground running with their existing team instead of having to assemble a team of internal lawyers at the new firm.

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Notes on research parameters and interpretation of results

The research tracks movement of partner-level talent where:
- A partner/principal switched firms and remained a partner/principal with the destination firm.
- A partner/principal switched firms but moved into a non-partner role with the destination firm (e.g. consultant, special counsel).
- A senior lawyer switched firms and was elevated to partner/principal with the destination firm (e.g. special counsel to partner role).
- A general counsel moved into private practice as a senior lawyer or partner/principal role with the destination firm.
- A senior lawyer or partner/principal moved into an in-house role as general counsel of the destination organisation.
The time period of the research is for FY20, from 1st July 2019 to 30th June 2020.
The research also tracks:
- Boutique breakaways (i.e. partner or senior lawyer sets up own practice).
- Greenfield offices (e.g. when a firm opens a new office by acquiring partners).
- Movement of teams (i.e. partner plus a team of lawyers).
- Diversification of practice (e.g. when a firm diversifies its offering into parallel legal services).
Law firm mergers are not analysed in this research.
All movements of partners are sourced from legal news outlets such as The Australian Financial Review, Lawyers Weekly and Australasian Lawyers.