2018 has seen a consistent demand in the in-house legal market at all levels. The previous year was also buoyant, but we have seen an increase of 37 per cent in in-house legal roles this year to date (to end November 2018 compared to 2017).
There are a number of factors that have affected this in my view. A big one has been the effect of the Royal Commission into the Banking, Super and Financial Services industry. This has created a number of new contract and permanent in-house opportunities within financial services and insurance, as well as the need to backfill internal transfers.
Other industry sectors have also seen growth due to an increase in infrastructure projects (another big employer of in-house lawyers), corporate deals, litigation/class actions, regulatory matters and new market entrants. The fact that two of the largest in-house sectors (banking and infrastructure) have seen increased activity both in frontend transactional work and backend litigation is rare in itself.
On top of this there has been ongoing growth in the in-house legal sector as a whole (59 per cent growth for the five years to 2016, according to Thomson Reuters) as well as the Australian legal market generally (7.8 per cent growth in the last financial year, according to The Law Society of NSW, compared to a 0.2 of a percentage point contraction in the US).
This has seen great demand for the best talent, as it also coincides with an increased need for lawyers within domestic law firms (*5 per cent headcount increase overall) and overseas markets. This has increased pressure on salaries and retention efforts in order to be competitive.
We have also seen an increase in senior roles (senior legal counsel and above) due to increased movement in the market and also new senior roles being created due to the growth in the sector and the corresponding need to develop more complex departmental structures.
Where there was previously often a general counsel or head of legal and a very flat structure below them, there is now often a need for additional formal management roles or senior legal counsel to step up and mentor or formally supervise juniors within the team.
Additionally, new positions have been created such as legal operations to help in-house teams make the most of the growing legal tech sector and changes in work practices.
Although some of these factors are specific to this year, I would say that the signs are that the market will continue to increase at a good pace in 2019. Although the royal commission is drawing to a close, we are already seeing a demand for lawyers to implement the recommendations, handle remediation work and ongoing regulatory matters.
Given the strong markets in other corporate sectors, when combined with an ever-increasing in-house legal population, I believe that we can expect more busy times ahead!