It’s a lawyers’ picnic as firms and economy shine

Women comprise the overwhelming majority of law school graduates – accounting for 70 per cent of solicitors under the age of 24, according to the Law Society’s study.

As the second year of the pandemic draws to a close, signs of this country’s resilience can be found in one of the most unlikely of places: the career prospects of solicitors. And the signs are good.

The business outlook for law firms is an indicator of the overall health of the economy. And continued partnership growth, despite the impact of the pandemic, supports the argument that the economy is stronger than some might believe.

These firms are acutely attuned to fluctuations in demand for their services. Existing partners are unlikely to approve any expansion without confidence that the profit pool will be sufficient to accommodate any new partners while leaving their own take undiminished.

That is why Friday’s survey in The Australian on partnership growth at law firms is relevant beyond the narrow confines of the legal profession. If those who provide professional services are doing well, it’s a good bet that their clients are too.

When the results from the 41 surveyed firms are averaged out there is no sign that this part of the legal services industry expects demand for its services to decline.

On average these firms are still growing. And while the numbers are small, any growth in the midst of a pandemic is significant.

Even though some new partners will be salaried, and overall partner numbers are up by just 1.16 per cent in six months, this is still a positive sign for 2022 – not just for lawyers, but for the broader community.

Smart lawyers, with skin in the game, have taken account of the uncertainty associated with Covid-19 and have decided there will be enough work to justify inviting more people to join them at the top table.

These findings indicate the pandemic has failed to halt the extraordinary growth in legal services that has taken place over the past decade.

Just last month, the Law Council produced a report citing estimates that the legal services sector employs 100,674 people and provides work for 22,333 businesses.

The total market size of the legal services sector is estimated to be about $23bn, according to IBISWorld’s legal services in Australia market research report.

The NSW Law Society produced a report last year for the conference of law societies that shows a 45 per cent increase in the number of solicitors practising in Australia – up from 57,577 to 83,643 since 2011.

But that is not the most startling aspect of that report.

The statistics published in that study, the 2020 National Profile of Solicitors, confirmed that the largest branch of the legal profession is dominated by women – at least numerically.

It shows that 53 per cent of the nation’s solicitors are female – a trend that was first apparent in 2018. Women have the numbers in all states and territories.

In nine years, the number of female solicitors had grown by 67 per cent compared to just 26 per cent for male solicitors.

The same trend has shown up in Friday’s partnership survey of the 41 firms.

The number of female partners at these firms grew by 2.82 per cent in the past six months – more than twice as fast as the overall growth rate.

This is despite the fact that last year’s study by the Law Society shows that private practice is the one sector where women lawyers are under-represented – comprising just 48 per cent of private sector solicitors, compared to 53 per cent of all solicitors.

And the reason?

Women are over-represented in the public sector where they comprise 68 per cent of legal staff as well as in corporate practice (60 per cent) and in the community legal sector (71 per cent).

Private practice, where they are under-represented, is still the largest area of practice with 67 per cent of all solicitors.

But the fastest growth is taking place in areas where women dominate: the corporate and government sectors, where the number of solicitors rose by 82 88 per cent respectively in the nine years to 2000.

The above-average growth in female partner numbers is not evidence of social engineering or wokeness. It reflects reality.

Women account for at least 61 per cent of solicitors in every age category up to age 39 – the cohort that could be described as the pool of potential partners.

What we are witnessing is not just demographic change. The solicitors’ branch of the profession is in the midst of a female takeover. Private practice – and partnership in particular – are merely the last bastions to fall.

The numbers suggest one possible reason for the continued male dominance of partnership ranks could be the fact that a disproportionate number of women simply prefer to work elsewhere.

But change is coming. And it is happening because it serves the business interests of all law firm partners – men and women.

Despite the fashionable guff produced by some law firm leaders, the rise of women partners has nothing to do with gender equity and everything to do with money.

Women comprise the overwhelming majority of law school graduates – accounting for 70 per cent of solicitors under the age of 24, according to the Law Society’s study.

So if the current partners want profits to grow, they need to remain competitive by recruiting the best legal brains. They need to show newly admitted solicitors – most of whom are female – that the path to partnership is open.

The list of firms where women lawyers do well appears in The Australian on Monday, followed next Friday by the Chambers and Partners rankings of the top law firms.

Chris Merritt is vice-president of the Rule of Law Institute of Australia.