Legal Demand at Mid-FY26, and What Victoria’s Work-From-Home Bill Means for Hiring

Australia’s legal market is running at two speeds as FY26 passes its halfway mark. Workplace relations demand is up 9.9 per cent year to date, while mergers and acquisitions work has slipped 2.1 per cent, and a widening gap is opening between large firms and everyone else. Source.

At the same time, Victoria’s work-from-home right, giving eligible employees two days a week from 1 September 2026, is prompting firms to rethink flexibility. Source. For anyone hiring lawyers or weighing a move, these two stories connect. This is a general overview of the legal talent market, not legal advice.

Key Summary

• Demand is up, but uneven: overall legal demand rose 4.8 per cent year to date at the midpoint of FY26, with worked rates up 4.7 per cent. (Thomson Reuters)
• Workplace relations leads: at plus 9.9 per cent, ahead of insolvency and restructuring at plus 7.9 per cent and corporate at plus 7.7 per cent. (Thomson Reuters)
• M&A is the outlier: mergers and acquisitions demand is down 2.1 per cent year to date. (Thomson Reuters)
• A three-tier divide is widening: large firms are growing demand at around 7 per cent, ahead of the Big 8 firms at 2.7 per cent and midsize firms at 2.4 per cent. (Thomson Reuters)
• Victoria’s work-from-home right is in focus: under changes to the Equal Opportunity Act, eligible employees would gain a right to work from home two days a week. (Premier)
• The timeline and reach: the right carries a start date of 1 September 2026 for most employers and 1 July 2027 for those with fewer than 15 staff, enforced through conciliation and, if needed, VCAT. (Premier / JWS)
• Practical takeaway: flexibility is shifting from a perk towards a possible entitlement, so firms increasingly compete on rosters and culture, not pay alone.

The Mid-FY26 Demand Picture: Who Is Hiring

The Thomson Reuters Institute’s 2026 Australia midyear legal market update, published 22 February 2026, maps where the work sits. The short version: most practice areas are growing, but the spread between them is wide. Source.

Figures are year-to-date demand growth at the midpoint of FY26. Source.

Workplace relations sitting at the top is no accident. A broad wave of workplace-relations change is moving through 2026. Award and minimum wages rose at least 4.75 per cent from 1 July 2026, Source, Fair Work Commission process reforms are before Parliament, and Victoria’s work-from-home right would add a new entitlement under the Equal Opportunity Act. Source. Each change adds advisory, compliance and dispute work, and much of it lands on employment and industrial relations teams. That connects directly to the second half of this article.

The Three-Tier Divide: Why the Firm You Join Matters

The same report flags a structural split. What used to look like one band of large firms is now two very different stories, sitting alongside the midsize market. Source.

• Large firms are growing demand at around 7 per cent, close to double their peers, backed by aggressive investment and expansion. Profit per lawyer has risen 27.4 per cent since FY2022.
• The Big 8 firms are growing demand at 2.7 per cent, leaning on pricing power and cost discipline, with profit per lawyer up 7.1 per cent since FY2022.
• Midsize firms are growing demand at 2.4 per cent, taking a balanced, moderate course, with profit per lawyer up 3.1 per cent since FY2022.

Source.

For lawyers, the tier a firm sits in shapes more than its brand. It signals hiring capacity, the pace of lateral recruitment, and how much room there is to progress. For firms, it sets the terms of competition: the best-resourced players can invest to buy talent, while others compete on culture, work quality and flexibility. We looked at where these roles cluster across Sydney in our recent guide to where the legal demand is.

Victoria’s Work-From-Home Right: A Talent-Market Shift to Watch

The second story is Victoria’s work-from-home right, set out under the Equal Opportunity Amendment (Work from Home) Bill 2026 and carrying a start date of 1 September 2026. Source. It has drawn close attention from employers and lawyers alike. The detail below sets out what it involves.

What the work-from-home right involves

• A right for eligible employees to work from home two days a week, written into the Equal Opportunity Act. Source
• Commencement on 1 September 2026 for most employers, and 1 July 2027 for those with fewer than 15 staff. Source
• Coverage of eligible public and private sector employees, with carve-outs for probationers, apprentices, trainees, interns, casuals without regular systematic work, and staff already covered by Fair Work Act flexible-work provisions. Source
• A process where the employee gives written notice of the days, times and location, and the employer replies in writing within 21 days. Source
• A reasonable-business-grounds test for refusal, covering role requirements, productivity, safety, supervision and training, client and customer needs, confidentiality, cost and scheduling. Source
• An obligation on employers to meet the reasonable costs of enabling work from home, with disputes going to conciliation and then VCAT. Source

A change that has drawn debate

The right has attracted strong views. Employer groups including the Australian Industry Group, the Australian Chamber of Commerce and Industry, and the Victorian Congress of Employer Associations have opposed the measure, arguing it is burdensome and that most businesses already offer flexibility. The government points to household savings it estimates at more than $5,000 a year, time saved commuting, and higher workforce participation. Source. Either way, flexibility is now firmly on the agenda for Victorian workplaces.

Why it matters for legal hiring

For the legal talent market, the right cuts two ways. First, it is part of the reform wave lifting workplace-relations demand, so employment and industrial relations teams stand to gain more work. Second, it raises the bar on flexibility as a hiring and retention lever. Flexibility that firms currently offer by choice could, in Victoria, become an entitlement that employees can point to.

Firms that plan their rosters, policies and 21-day response process early will compete better for lawyers than those that wait, and many are already using the post-EOFY reset to shape FY27 hiring. Source. Candidates, especially in Melbourne, will factor Victoria’s work-from-home right into where they choose to move.

Conclusion

The mid-year read is a two-speed legal market with a widening gap between firms, set against a workplace-relations reform wave that Victoria’s work-from-home right extends. For hiring, that points in one direction: demand is concentrated in a few practice areas, and flexibility is becoming a sharper point of competition. Source.

If you take one action from this article, make it this: plan around both trends now, rather than waiting for the full-year picture to land later in 2026. The firms and lawyers that prepare early will be better placed when it does.

Disclaimer: This blog is a general overview and should not be construed as professional legal, financial or medical advice.

FAQs

• Which practice areas are hiring most in 2026?
  

  On Thomson Reuters Institute mid-FY26 data, workplace relations leads at plus 9.9 per cent year to date, followed by insolvency and restructuring at plus 7.9 per cent and corporate at plus 7.7 per cent. Overall demand is up 4.8 per cent.



• Is mergers and acquisitions work really shrinking?
  

  M&A demand is down 2.1 per cent year to date at mid-FY26, the main soft spot in an otherwise growing market. It is a fall in demand growth, not a collapse, and it may turn as deal activity picks up.



• What is the three-tier divide?
  

  It is a split the report identifies between large firms (around 7 per cent demand growth), the Big 8 firms (2.7 per cent) and midsize firms (2.4 per cent). Each tier is following a different strategy on investment, pricing and expansion.



• What is Victoria’s work-from-home right, and when does it start?
  

  Victoria’s work-from-home right, set out under the Equal Opportunity Amendment (Work from Home) Bill 2026, would give eligible employees the right to work from home two days a week. It carries a start date of 1 September 2026 for most employers, and 1 July 2027 for those with fewer than 15 staff.



• Who would the Victorian work-from-home right apply to?
  

  Eligible public and private sector employees, with exclusions for probationers, apprentices, trainees, interns, casuals without regular systematic work, and those already covered by Fair Work Act flexible-work provisions. Employers could refuse a request on reasonable business grounds.



• When will full-year FY26 legal market data be available?
  

  Full-year results are expected to land around August to September 2026. They will show whether the mid-year trends, including the workplace relations surge and the M&A dip, held through the year.

Information Sources

• Thomson Reuters Institute, 2026 Australia: Midyear Legal Market Update
• Premier of Victoria, Work From Home Protected In Law From 1 September
• Parliament of Victoria, Equal Opportunity Amendment (Work from Home) Bill 2026
• Johnson Winter Slattery, June 2026 Employment Update
• Human Resources Director, Victoria’s work-from-home right splits business and government
• Fair Work Commission, Annual Wage Review 2026