Big billables, bigger salaries: Are junior lawyers paying the price for their principles?

Legendary ex-Magic Circle dealmaker Alan Paul advises new solicitors to resist the ‘powerful drug’ of six-figure salaries and remain true to their values

Keeping the “billable hour” and “target hours”, as well as salary rates, in perspective may be one of the toughest challenges facing lawyers at the major US and UK-based law firms in London. And particularly for young lawyers in the early years of legal practice and those contemplating a career in law.

Why is that perspective important? It is important because, to make a successful, and crucially an enjoyable, career in such firms and elsewhere, constantly concerning oneself with achieving a target for hours spent will take the eyes off the real ball; that is the production of high quality work, total integrity and the best interests of the client, which always have to be the critical driver of a lawyer’s endeavours.

Legal Cheek published exclusive research on the average hours at big London law firms which was subsequently picked up by several newspaper journalists including Jonathan Ames, legal editor of The Times. He has also written about how young lawyers approach their hours recording and how their lives are being purchased in articles in April and May 2024. Bearing in mind that salaries for newly qualified lawyers at these firms range between £150,000 and £180,000, predicted to reach £200,000 before long, a clarity of purpose is needed on the part of the young worker.

If a target of hours or money becomes a primary driver to go to work in a top law firm, that will not prove a strong foundation. Much better to have your own principles for how you work than be swept along by another tide.

Every day is Christmas, almost

Such salaries are by any normal measure absurd. They put these earners in the top 1% bracket of earners in the UK, and nobody would dispute that a newly qualified solicitor in such a firm has almost no experience and little competence to provide the advice their clients often require: rather, as they learn on the job, they depend on more senior lawyers, maybe partners but often lawyers of with a few years of qualification, to check their work and supervise generally. Some say, it is reported, that the bulk of the work they do is mind numbingly boring, but generalisations are dangerous and the range of experiences of such lawyers will vary enormously. Any single lawyer’s experience is partly a matter of good fortune and may depend on the partners they work with most. Comparing pay across sectors is complex but when mid twenty-year-olds are earning more than experienced doctors or scientists questions will be asked.

Salaries in any industry are a function of the relevant market, what can be afforded and supply and demand. It would be foolish to assume that law firms truly want to pay these enormous salaries or view them as a statement of true worth. In London now there are over 100 US origin law firms, and some like Latham & Watkins are of a size and nature that they are very established UK firms in their own right. Although some of these firms have expanded by merger with established London firms, which in their turn disappeared, they have generally created a demand for many more good lawyers in London: the magic circle firms have not materially shrunk.

Accordingly, there is huge competition to recruit and retain the best talent out of aspiring young lawyers. The big US firms have been prepared to offer the eye watering salaries to tempt lawyers away from traditional London firms, who have increased pay to compete. This is market forces in action, producing arguably an astonishing outcome from an independent outsider’s viewpoint, but it is reality for now. It would be wrong to criticise a young lawyer taking these shillings: the cost of living in London is so high and such salaries may enable 25-year-olds to buy their own home: this is Christmas every day in one sense. But it smacks of a false market with consequences and risks. And long hours in big City law firms have been a feature for the last 40 years.

A tough working week and targets

Legal Cheek’s research puts average weekly hours of work for young lawyers in these firms at between 55 and 70 depending on the firm. That ignores weekends. So, the average weekly total is a few hours more as weekend work is common. So that is between 11 and 13 hours work per working day. Averages of course are only that. Some lawyers will regularly work more hours and some less in any firm. A transaction can require a wipe out of a week on occasions. And the impact these hours have on quality of life will depend among other things on the quality and culture of the local team the lawyer is part of, as well as the attitude of the lawyer themselves. Some are happy in the long hours’ environment, especially if camaraderie is good, at least for a while. There is no doubt that these are long hours, but other professions require long hours too; also, hardworking people who are unskilled work very long hours regularly to make ends meet for their families, perhaps with more than one job, and in these other cases the pay is far short of the lawyers’ salaries.

Law firms commonly have target hours of billable work for lawyers. The reports indicate that for UK origin firms that target is likely a minimum of about 1,800, and at the US origin law firms about 2,000. A lawyer depends on the employer, and in any case the partners for whom the lawyer primarily works providing the work to meet at least the target. But if the employer fails to provide sufficient work, how can the target be met?

In the April article referred to above, a RollOnFriday survey was reported to show that a substantial number of young lawyers “pad” their time recording, with a number admitting to inventing hours worked which in fact had not been worked. Essentially it showed too, and anecdotal evidence confirms this, that a number of lawyers may spend more time on tasks than may really be needed in order to meet targets. The principle that works expands to fill the time available can be seen in spades if the culture is one which values time spent as a measure of performance. It is useless on its own as such a measure: context and other factors must leaven that assessment.

But a more sinister concern is being highlighted. Padding out time recorded is to seek to deceive the employer. If that time is intended to be billable to clients, then in addition it is in effect an attempt at deceiving the client and obtaining money through that deceit. Does that sound like, or close to, theft? If the firm is aware of it, then it is complicit. There are reports that clients may not care if they feel they get value for money, but that misses the major point. The most important responsibility of a lawyer is to act professionally in the conduct of business, with total integrity. Once a lawyer believes deception is ok, then that fundamental requirement is absent, and it could lead to all sorts of poor judgements, let alone malpractice.

Second, when representing a client, it is the lawyer’s duty to act in the client’s best interests: a better outlook to billing that client would be to act as efficiently as possible treating that client’s money and resources as carefully as one would one’s own. A constant eye on maximising billable time and being a slave to targets is wholly inconsistent with that concept.

Target hours are a major management tool if the firms concerned charge their clients largely based on hours spent on the job. However, a billable hour is a product, nothing more. It is a product of doing what is needed to service the client’s requirements. If one sees the hour as a product, not a driver, its importance will be kept in perspective. The lawyer’s approach to the work must be determined by the lawyer’s principles.

Firms may also impose revenue and profit targets on teams and partners. Of course, achieving good profits is vital for all businesses and a law firm will perceive a need to ensure its profitability matches its peer group, not least because, if it fails to, then partners may be more inclined to leave to more profitable firms. However, these targets, if not kept in perspective, also can deflect from the core drivers of being a good lawyer — quality, integrity and clients’ interests. Revenue and profit are again a product not behaviours, and behaviours drive the product.

No serfdom

It is reported that some young lawyers receiving the enormous salaries alluded to consider that, if the firm is willing to shell out these sums, then it is entitled to demand as much work as it likes. If the employing firm or partners view associates in that way, they are wrong. If associates view themselves that way, they are making a mistake. Pay is very relevant, but, if it is the driver of culture and used as the key motivator, it will prove to be a foundation of straw. Whatever the rewards, it cannot be acceptable that work produces misery or ill health. Working as a lawyer should not be serfdom, and responsibility to ensure that is not the case rests with law firm partners and the associates themselves.

Lawyers need to be resilient and take responsibility for themselves and their wellbeing too. One of the principles which guides an approach to work could be ensuring a balance. If a lawyer starts to think they must do whatever is demanded, that they are owned, important self-esteem will be diminished. Getting exhausted helps nobody and is a problem for everybody. And if any partner in a firm treats an associate without care and respect for their wellbeing, perhaps they need some further education. Good associates who produce good quality work, efficiently and who are affable, liked by clients and colleagues, will always be busy as they are the first port of call of partners. So, concentration on nurturing those characteristics and core principles, rather than worrying about pay and hours, may be the best route to delivering the product.

The £150k-200k salary for newly qualified lawyers is a powerful drug and could be addictive. Keeping that in perspective, as well as target hours and hours worked, allowing principles to dictate behaviour front and centre, is essential for an enjoyable and successful legal career in the City.

Alan Paul, a former partner at Allen & Overy, has spent the past 12 years as a professional coach specialising in supporting law firm partners. You can hear more about his career on The Legal Cheek Podcast (Spotify and Apple).