In the last 5 – 10 years Perth has seen growth in the number of law firms entering the market. From magic circle global firms, to eastern seaboard mid-tier firms to large law firms as well as other global law firms.
To achieve this growth, these new entrants have had to undertake a number of different strategies:
- Transfer lawyers from other states/countries to set up their Perth office;
- Merge with existing small or medium size law firms in Perth; and
- Entice Partners or Special Counsel from other firms to either start up or grow their Perth office;
However while this was happening other factors were/are impacting the market including:
- The Perth economy softened at the same time as many firms were growing and entering the market; also
- Many successful operators, in larger firms, bucked the trend and set up their own boutique law firms instead.
So what has this meant for firms in Perth; especially those wanting to grow in 2019 and beyond?
For those that have grown or started up in recent years, if they have enticed Special Counsel to set up their Perth offices with the promises of partnership or senior partners with unsustainable remuneration, then the fallout is happening now where remuneration and levels of appointments are and should be being adjusted to more accurately reflect practice size and other contribution.
Overall there has been a trend of massive demand for growth, recruitment and expansion but at the cost of firms cannibalising each other. I believe that firms are falling into one of the following categories:
If they have grown in size in the last 5 years, they have gotten their strategy and culture right, plus they likely have a great relationship with a search team who is working closely with the leadership team, helping them executing an aggressive and proactive growth strategy.
If they have contracted or stayed the same size -many firms I have spoken to have indicated that they have struggled to grow or in fact are losing their partners to other firms and not being able to replace them. Brand perception, changes in remuneration structures, culture are obvious issues to explore first as causes.
However as the market is fluid and constantly changing, sometimes it is the small things that give a firm a competitive advantage, simply being more proactive and aggressive in executing your growth strategy, i,e. putting time, effort and resources into recruitment, leads to placements which leads to traction and momentum. This is especially in a market that is getting flooded with new entrants and is finite in terms of lawyer numbers as is the case in Perth. I believe that firms who are not growing already will, over time, continue to lose traction and eventually either close their doors or stay smaller.
If you would like to discuss yours or your firm’s strategy in relation to recruitment and growth please feel free to contact me for a confidential discussion on 0422 442277.