Most firms plan pay increase this year

by Sol Dolor11 Apr 2018

New Zealand law firm staff members are in for a treat this year as most of the legal industry expect to increase pay at or above the consumer price index (CPI).

The insight comes from the recently concluded “2018 NZ Legal Industry Salary and HR Issues Survey” commissioned by the Australasian Legal Practice Management Association (ALPMA) and McLeod Duminy, which gathered responses from 101 law firms that employ nearly 2,700 staff.

Half of the respondent law firms expect to be offering pay increases above the rate of CPI this year, said Sheryll Carey, ALPMA NZ chair and general manager at Lowndes Jordan. The survey, conducted by research firm Survey Matters, also found that 22% of firms planed a CPI-adjusted increase.

The data also show that 2% of firms planned a total wage increase, while 17% planned a limited freeze with select positions getting increases this year.

Carey said that 56% of firms supplement increases with bonus payments available to all staff, which is 15% more firms than last year.

“For fee-earners, bonus payments are calculated on their individual financial performance – usually based on fees they generate for the firm – while bonuses for other staff mainly relate to discretionary individual performance measures,” she said.

The survey found that most lawyers can expect at least 5% of their base salary in bonuses, while senior managers can expect 3% to 5% of their base pay as bonuses. Support staff can expect less than 2% of base pay in bonus payments.

Half of respondent firms expect to hire new staff, mostly to fuel firm growth. The number one HR issue among firms this year is retention, with figures showing an average employee turnover of 14% among the country’s law firms in the past year.

“It’s clear that law firms have been focusing on addressing this retention, as employee turnover is down four percent from a high of 18 percent in 2017,” said Kirsty Spears, McLeod Duminy Legal Careers director. “When you consider that ‘finding good people’ is second biggest challenge for law firms, it certainly makes good business sense to develop new strategies to keep the people you have.”


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