Bonuses for Australian lawyers in larger firms go as high as 20 per cent of the base remuneration package for senior associates, report says.
The 2018 Mahlab Report, covering remuneration and rewards, trends and employment experiences of lawyers both in private practice and in-house, shows ‘high-achieving senior associates’ typically earn a raise of three per cent plus a bonus, most commonly around the 10 per cent mark.
The 20 per cent level is generally reached by senior associates who ‘exceed expectations in fee generation, client attraction, management of matters and teams.’ Lawyers with three to six years of post-qualification experience in the larger firms achieve salary increases ranging between three to five per cent, while outstanding performers can achieve increases of up to 10 per cent. Partner remuneration levels have generally remained steady, the report noted, with slight increases in some firms, although most firms reported a profitable year. The report states ‘however, profits were generally modest and relied heavily on the creation of efficiencies and, in some instances, on reducing partnership numbers. Competition and business challenges resulted in several partnerships reducing partner compensation, while other partnerships reduced equity partner numbers to maintain overall profits and thus retain valued partners.’
Some practice groups report lawyers achieving greater increases in their salaries, with those in ‘hot spots of demand’ like banking and finance, construction and infrastructure and corporate/M&A earning higher salary rises than their counterparts in other groups. The report states, ‘those firms who cannot reward high performers appropriately risk losing key partners and practices,’ adding ‘this is an issue for even some of the largest and most successful firms, in which high-performing partners and practices may in some circumstances need to financially support niche or less profitable practices to provide the seamless service demanded by many clients.’ Generally, bonuses continue to be used as retention strategies by their employers, along with the provision of ‘laptops, phones and other offerings.’