Top tier law shops … Soaring pay packets for law graduates … Salaries hit $100k for fresh recruits … Instagram survey … Pay secrecy and inequality … Social media collects the numbers … Henry Chen has the data
Salaries in the Sydney offices of the Big Six range from $92,000 at MinterEllison to $97,800 at Allens, with Ashurst ($94,000), King and Wood Mallesons ($94,000), Clayton Utz ($95,000) and Herbert Smith Freehills ($97,000).
The six digit salary is reserved for graduates at the upper mid-tier firm Gilbert + Tobin, who receive $100,000, including superannuation. But G+T grads work hard for the privilege, with co-founder Danny Gilbert describing long hours as a “reality of life“. The firm was investigated twice by SafeWork in 2019 over reports that lawyers slept in the office and abused drugs to keep up with work demands.
Allen & Overy pays its graduates $97,000 and offers a $10,000 sign-on bonus – a device usually reserved for the tech and finance industries, and rarely seen in the law.
The graduate salary data was collected in an anonymous survey by The Aussie Corporate, a popular Instagram meme page for “community-driven insights, news and gossip” in the corporate sector.
This comes amid a wages surge over the course of the COVID-19 pandemic, with across-the-board pay increases of 10-15% in 2021 for junior lawyers at top and mid-tier firms caused by a shortage of talented staff.
This “candidate-driven market” has been created by a combination of limited growth in previous years, an increase in M&A activity, border closures preventing firms from hiring from overseas, and demand for junior lawyers in in-house and overseas roles.
These factors compound the culture shift away from long hours on limited pay that have transformed heights of the legal industry since 2019, as junior lawyers and law students demand improved working conditions, and firms search for non-monetary incentives to retain staff.
However, wages growth for graduates outside the major firms has been more subdued. According to the 2021 QILT Graduate Outcomes Survey, the median salary for an Australian law undergrad who finds a full time job within four months after graduation in Australia is $66,800, compared to $60,000 in 2017.
An analysis of 2017-18 tax data by the Department of Education similarly revealed that median incomes across all law graduates, including those not in full-time employment, ranged from $66,900 (UNSW) to $38,800 (University of the Sunshine Coast).
Australian law graduate salaries remain far short of BigLaw in the United States, where a first year associate will be paid US$215,000 (AU$310,000). Graduate salaries in the US are infamously bimodal, with BigLaw graduates earning three to four times more than their counterparts in other firms.
According to the Financial Times, Magic Circle’s Clifford Chance has raised starting price out-of-school salaries to £125,000 a year (A$221,000), the same as Freshfields Bruckhaus Deringer.
Linklaters and Allen & Overy each are offering new grads £107,500 ($A190,125).
But both of these sources are strikingly inconsistent. For example, the Mahlab salary guide for 2021 reports that first year lawyers at top tier firms in Sydney will earn $90,000 to $100,000, Gatehouse Legal Recruitment reports $80,000 to $95,000, Ablethorpe Recruitment reports $75,000 to $85,000, and the Hays salary guide reports $66,000 to $77,000. Similarly, salary ranges in Glassdoor are often too wide to be meaningful.
While established media institutions like the Financial Review seek salary information from the firms themselves, social media provides a grassroots platform for information sharing. As an unconventional source, The Aussie Corporate first came to prominence for revealing a racist trivia event at PwC where a staff member dressed up as a “bat from Wuhan“.
The Aussie Corporate’s salary data is a public display of over 300 precise data points linked to company names, drawn from a community of over 40,000 Instagram followers. In a sign of the changing priorities of young professionals, The Aussie Corporate has also undertaken detailed surveys on Working From Home policies and paid parental leave in the corporate sector.
Online forums are also changing how prospective lawyers find information about the workplace. The technology-focussed website Whirlpool Forums has long been the platform of choice for summer clerkship applicants, with students using annual threads to discuss the clerkship process and track firm responses to applications.
The 2021 Whirlpool Forums clerkship thread, viewed over 16,000 times, placed law firms’ blunders squarely on the record when Bird & Bird forgot to BCC its rejection emails, and Corrs Chambers Westgarth accidentally sent interview invitations to rejected candidates.
It’s fair to say that The Aussie Corporate’s salary survey has obliterated grad-level pay secrecy in the Australian legal industry. Pay secrecy suppresses wages by amplifying the information asymmetry between law firms and their employees.
Michelle Brown, Professor of Human Resource Management at the University of Melbourne, argues that pay secrecy also increases the gender pay gap – an observation echoed in the US and the UK, where the rights of workers to discuss pay are protected by law.
Since April 2022, Westpac, NAB, ANZ, the Commonwealth Bank and PwC have removed pay secrecy clauses in their employment contracts. This follows a push from the Finance Sector Union to address the 29% gender pay gap in the finance industry. The Australian Labor Party has pledged to outlaw pay secrecy.
The major law firms haven’t taken any such steps to remove pay secrecy. Yet, the power of social media looks set to make pay secrecy ineffectual in any event. As The Aussie Corporate’s followers reach the heights of the profession, buoyed by their rising salaries, who knows what they’ll shake up next?