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New lawyers find it tougher as glut looms

Some firms are cutting starting pay, taking fewer trainees and reducing hiring

RHTLaw TaylorWessing's Mr Tan says that the firm recently reduced the front-loading component of pay packages.

TSMP Law Corporation's Ms Yuen-Thio says that her firm is not reducing its starting pay for newly qualified lawyers.

Nicholas & Tan's Mr Narayanan sees the silver lining of quality candidates joining smaller firms like his.

Withers KhattarWong's Mr Nathan says that reducing starting pay by 10-15% will give firms room to hire one or two more new lawyers.


THEY were once eagerly courted, but those days might be over for freshly minted lawyers.

The trials of market forces and a slowing economy have led several law firms here to cut the sizable starting pay packages seen at the height of the lawyer crunch a few years back, moderate the number of trainees that they take in, or reduce the number of new lawyers that they hire.

Unlike three or four years ago when the legal sector faced a shortage of lawyers, the sector now faces a mismatch in supply and demand. Observers say that this is expected to worsen in the next few years as measures to ramp up supply kick in.

Previously, the average gross starting pay in the Big Four firms was S$6,000 and more a month, while medium-sized firms paid new lawyers between S$4,500 and S$5,500.

Given the current oversupply, The Business Times was told that starting pay in bigger firms have moderated to between S$5,500 and S$6,000 monthly. Gross pay in medium-sized firms and small firms have fallen more to S$4,000-5,000, and around S$3,500, respectively.

Patrick Ang, Rajah & Tann's deputy managing director, said that many firms used to offer pay packages that comprised higher base salaries and lower variable bonuses. The firm however has now switched back to the previous model of lower front-loading so that monthly salaries are lower and bonuses are higher. Since last year, the firm also reduced its trainee intake from more than 40 lawyers to about 35 now, although about 90 per cent of its trainees were retained.

Similarly, RHTLaw TaylorWessing recently decided to reduce the front-loading component of pay packages and instead offer higher bonuses for those who perform, said managing partner Tan Chong Huat.

Rodyk & Davidson, which has also moderated its starting pay, said that it follows current market rates and constantly reviews them to stay competitive.

These developments come as no surprise to lawyer Amolat Singh, who said that bigger organisations have less room for being sentimental. Already, many law graduates have failed to get training contracts, he said.

Last year, almost 650 law graduates competed for some 490 training contracts.

Shashi Nathan, a partner at Withers KhattarWong, said: "If you reduce starting salaries by 10-15 per cent, that allowance gives law firms room to hire one or two more new lawyers."

Still, not everyone is cutting back. It is business as usual for some firms, including Allen & Gledhill, Drew & Napier, WongPartnership and Morgan Lewis Stamford. Some, like Wong & Leow and Tito Isaac & Co, have retained all their trainees, even as the intake grew over the years.

"The Singapore legal sector is becoming increasingly polarised between firms that do 'Wall Street' work and those that do 'High Street' work. The former compete with international firms for talent, so they have not moderated their pay scales significantly. This is one of the reasons that TSMP is not reducing our starting pay, and we continue to pay S$7,000 for newly qualified lawyers," said Stefanie Yuen Thio, joint managing director at TSMP Law Corporation.

One outcome is that fresh lawyers are now less choosy about the firms that they join. Unlike previous years when fresh graduates tended to shun small firms, the tides have turned - something that is welcomed by the smaller players.

Said Nicholas Narayanan, a partner at Nicholas & Tan: "The silver lining is that quality candidates are coming to smaller firms like ours."

Lawyer Peter Low said that in the past two months, he has been inundated with more than 100 internship, training and job applications.

One legal trainee told BT that for those who want to practise law, "there is no choice in the matter", and many of his peers now turn to small firms due to the circumstances. Others said that their specialised skills allow them to either practise law or follow an academic route.

Last year, Chief Justice Sundaresh Menon said that 430 advocates and solicitors were called to the Bar, up from 411 in 2013 and 363 in 2012. The spike in the number of students pursuing law degrees in countries including Britain and Australia has also added on to the pressure.

This year, close to 600 are eligible to file an application to be admitted as a lawyer, said the Supreme Court, although the actual numbers can only be finalised upon submission of applications.

The development follows measures to raise the supply of lawyers to plug the shortage in recent years due when the economy was growing more briskly, as well as the government's push for Singapore to be the legal services hub of the region.

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