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Legal survey a sobering bellwether of SA economic fortune

Opinion

A national survey of the legal profession is difficult reading for South Australians, with the local industry stagnating and languishing behind every other state. As a barometer of economic health and to stop young people leaving, we need to work hard to catch up, argues Morry Bailes.

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The just published biennial National Survey of the Legal Profession is a tale of demographics, relative state economies, composition of the profession and a road map of the federation.

For South Australians it is a grim read, but I have a hope the survey may look more encouraging two years from now.

There are a number of striking elements to be found in the 2019 publication – which doesn’t take into account barristers, who make up 10% of the profession – that build on themes seen in the previous 2017 published survey.

Firstly, the big three states of NSW, Victoria and Queensland count for 84% of the legal profession in Australia.

Obviously population is a pre-eminent factor, but it is also a navigating tool of where we are finding economic activity and the influence of business, because where there is increased activity it requires lawyers, like accountants, to transact it.

New South Wales alone accounts for 43% of the profession and, since the first survey seven years ago, its profession has grown by 33%.

The Victorians have experienced a similar growth pattern and Queensland beat the triumvirate at 39%. To coin an expression; ‘how good is Queensland’.

The ACT is an anomaly at 67% because it had a change in the requirement for practicing certificates for government lawyers, which is how the numbers are arrived at.

But that all makes the South Australian result seem so much worse.

We account for 5% of the Australian legal profession, and that is understandable on the basis of size, but it is our growth that is heartbreaking.

In the last two years we have grown but 1%; in the last seven years only 7%.

Why so? There are two distinct reasons. The first is a series of tort and legislative reforms enacted by the former Labor government that took substantial rights away from injured workers and injured motorists, and thereby work from lawyers bringing and defending claims.

The oddity of the reforms is that you would not have expected them to fall from a Labor government, but as has been seen on a national scale, whose interests are represented and defended by the ALP is all a bit of a mystery.

The second, of course, is our previous economic malaise. There are now signs of confidence in all sectors, but it is plain from these statistics that whereas in the eastern states commercial and property transactions have bolstered the demand for lawyers to advise on and enable these transactions, the same cannot be said for South Australia, at least not at the time of the survey.

That and the irritating habit of South Australians and, on occasion its governments, to use larger interstate firms on big South Australian deals.

That the state is now in a seeming period of economic renaissance is not reflected in the survey, both because the survey was conducted during 2018, and the fact that arguably lawyers see the effect of a rising economy in its later stages.

We are not the worst since the 2017 published survey. The West Australian profession actually shrank in the last two years, but it is 26% larger than it was seven years ago, leaving South Australia with the wooden spoon for the growth award amongst all of the states and territories on the seven year analysis.

Don’t bother hanging on to the thought that Tassie is the perennial loser. Its profession grew a whopping 62% over the seven years.

Other statistics of interest include demography of the profession and gender. We have a profession that is hanging on to older members, no state more than South Australia, but there has been a lot of recruitment across Australia of lawyers under 25 years; a very good sign.

The mean age is 42 years.

Male and female across jurisdictions are roughly the same, a bit more female than male in South Australia and other places. In our firm, at last count for instance, we were 58% female and 42% male lawyers.

Two thirds of lawyers are in private practice, the engine room of the legal profession. The remainder is in government and corporations.

Confirming that we are a divided profession with cottage industry at one end and internationals at the other, 86% of the private firms are sole practitioner or 2-4 partners firms only. Only 2% are 5 partner firms or larger.

There is a statistical oddity in these numbers, explained by the fact that in 12% of cases the size of the firm was unknown.

The takeaways for South Australia may seem depressing, but it is heartening to witness what appears to be a quickening economy.

It is entirely unsurprising, on these numbers, that young South Australian lawyers may look to jobs other than in our state, but please consider our state first because change is afoot.

We have bucked a national trend, which is a consistent growth in legal professional services that has, other than in our state, enthusiastically picked up young lawyers.

If the legal profession is a bellwether of economic and property activity, we have a long way to go before we can again be compared with even the Apple Isle.

The South Australian legal profession is as stagnant as it is ageing. We can collectively hope for better days ahead, but we have a hell of a lot of catching up to do.

Morry Bailes is the managing partner at Tindall Gask Bentley Lawyers, immediate past president of the Law Council of Australia and a past president of the Law Society of South Australia.

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