26 Jan Australia: A 2026 legal market snapshot
With a long-standing presence in the Australian legal market and a track record of moving lawyers both domestically and internationally, Marsden continues to stay on top of the latest trends for legal hiring. Here’s what we anticipate happening in 2026.
More international firms interested in Australia?
This is a question always being asked by managing partners of Australian firms.
- In October 2025 we saw King & Spalding formally open in Sydney with the aim of gaining litigation, regulatory and transactional work for clients doing business in APAC (although the firm already had boots on the ground in Sydney). We saw CMS also start to build in Australia.
- But will there be more in 2026? Our guess is no. With a relatively weak Australian dollar, and fee rate pressures, we have heard directly from management at some of the global elite firms that Australia is not an economically viable place to have offices. Clearly King & Spalding, White & Case, Jones Day, Seyfarth Shaw, A&O Shearman and Clifford Chance think otherwise – so let’s see!
Growth in legal work – and shrinking talent pools
According to a Thomson Reuters analysis, Australian law firms saw demand lift by 3.6% in FY25. There will be growth in all transactional areas as well support groups, and also in disputes and investigations, given Australia’s highly regulated environment.
- The growing overseas demand for top-tier Australian lawyers—particularly in Banking & Finance, Projects and Project Finance, Energy, and Private Equity—is already having an impact and is likely to intensify. As more lawyers relocate to hubs such as London, New York, and Dubai, remaining teams will face increasing pressure, operating at higher capacity with fewer resources. Firms are likely to find it increasingly difficult to replace departures, let alone support growth.
- As Corporate M&A and Private Equity activity strengthens internationally, demand for Australian lawyers is expected to rise further, driving continued movement to markets such as the US and London. In response, top-tier teams will need to broaden hiring strategies, increasingly drawing from mid-tier firms and international talent pools across New Zealand, the UK, Ireland, and South Africa to manage attrition and support expansion. As there are always fewer opportunities for Disputes lawyers overseas, any hiring in this space will likely be due to growth in teams.
The mid-tier is booming with more lucrative opportunities
Mid-tier firms are offering more and more sophisticated work, more sustainable hours, less bottlenecks, and better promotion pathways than many top-tier law firms. We’re seeing salaries move closer to top-tier firm levels, and that trend is expected to continue through the year.
Partner hiring is booming
- 2025 was one of the biggest in Australian lateral partner hiring and led the world in number of partner moves relative to market size. We expect more of this in 2026. Growth, gaining of market share, firms pursuing deeper sector strength, better gender balance and chasing increased PEP are all reasons why firms will be investing very heavily in lateral partner acquisition this year.
- From a candidate side, we will see partners being lured by higher salaries or assessing what kind of platform is better for them and their teams/clients as firms around them change and pursue strategies which may no longer be the best fit for individual partners. As some of the mega-mergers and demergers play out, we will see the partner landscape shift. It will be an exciting year.
Regulatory change will both increase demand – and the way lawyers work
- Lawyers working in areas related to regulatory compliance and reputational risk management will see increased demand for their services. Privacy reforms have gradually been rolled out since 2024, with the Office of the Australian Information Commissioner having already indicated that it will use its new enforcement powers to enforce privacy obligations. Priorities in regulatory action include the credit reporting and data brokerage sectors, advertising technology, and rental and property.
- Across industries, the evolving regulations mean changes to how lawyers work. Australia has had a new mandatory merger control since 1 January 2026 which will impact how lawyers, particularly those working in competition or corporate, notify the ACCC and get clearance for deals. Similarly, this comes after mandatory climate reporting laws for large companies were made effective since January 2025.
AI literacy is increasingly important – but faces more regulations
- AI is rapidly becoming essential for law firms seeking to remain competitive, particularly as caseloads rise and regulatory complexity increases. Many firms now recognise AI as critical to delivering faster, more consistent client service and are continuing to invest in both proprietary tools and broader legal technology capabilities. This is reflected in a series of major firm announcements and significant investment in leading platforms such as Legora and Harvey.
- AI is moving more from experimentation to integration as firms continue to cement their AI policies and the courts solidify AI regulatory frameworks. Lawyers should now expect to utilise AI and technology in their daily work.
In 2026 we will see an Australian legal market that is more international, competitive, and complex – but also rich with opportunity. For lawyers thinking strategically about their careers, it is a market full of momentum. For firms, success will depend on how effectively they respond to global competition, regulatory change, and the accelerating pace of technological adoption.
For further information please contact one of our Australasia team.