After an extended period of stagnation, Australian law firms saw levels of growth in revenue and demand in fiscal year 2018 that would have been unthinkable just a year prior.
A new report issued by Thomson Reuters Peer Monitor and the Melbourne Law School, “2018 Australia: State of the Legal Market”, details how these staggering levels growth came to be and what to expect as firms move forward into fiscal year 2019. Boom conditions in Australia which led to demand and revenue growth came out of developments such as: The Hayne Royal Commission’s look into the banking and financial services sector, regulatory changes, major infrastructure projects, and a strong flow of direct foreign investment.
The outcome: Demand for legal services increased on average by 7.8% in FY18; and revenue similarly was up by 7.4% by year’s end, which subsequently fed significant increases for qualified fee earners. On average, headcount increased by 5.0% in FY18 relative to the previous year.
The average qualified fee earners (QFEs) at an Australian law firm most likely did not have trouble sleeping after work in FY18, as they were increasingly relied upon to shoulder heavier workloads. Utilization, or the average amount of hours worked per QFE, increased by 2.6% in FY18. In the fourth quarter alone, QFEs worked an average of 13 hours more than Q4 of 2017.
FY18 saw the trend of market consolidation continue. Over the course of the year, there were 19 mergers and acquisitions among law firms operating in Australia. Further, when the size of the aforementioned deals are measured by the number of partners involved, the number is the largest since FY2013.
FY18 also saw the continued success of legal technology companies in market, as well as the beginning of reinvented curricula within Australian law schools. The result of all of which is a positive outlook for continued growth and success in the foreseeable future for law firms from the land down under.
You can download the “2018 Australia: State of the Legal Market” report, for free here.