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Billable hours: NQs work harder than mega-earning partners

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27

And trainees aren’t far behind

Newly qualified (NQ) lawyers are clocking up more billable hours than their mega-earning partner bosses, according to new figures.

The stats reveal the average number of chargeable hours billed by lawyers last year at the UK’s top 100 law firms by revenue. Interestingly the eye-catching figures show that the average NQ at a top ten firm completed 1,437 billable hours, 336 more than the average full equity partner (1,101 hours). Equity partners at these firms can earn upwards of seven-figures a year, whereas NQs are likely on approximately £80,000.

These top ten stats (screenshot below) also show that those just finding their feet in corporate law bill pretty much the same as their partners. Trainees clocked up a billing average of 1,039 hours, just 62 hours less than an equity partner. Spread this out over the year, and it seems trainees are billing just over an hour more than partners a week. Paralegals posted 933 hours for the year.

It is worth noting not all work done by lawyers is chargeable time. Administrative tasks such as filing and tidying, for example, often do not fall within the remit.

Average UK chargeable hours at top 10 law firms

Though NQs and trainees no doubt work hard, it seems junior lawyers some years from qualification work the hardest. Those with over five years post qualification experience (PQE) chalked up an average billable rate of 1,380, while associates with between three and five PQE posted 1,410 hours. Lawyers with one to two years of PQE under their belts billed 1,396 hours, according to the research.

More generally, the figures — buried away in accountancy giant PwC’s 2017 ‘Law Firms Survey’ — show that billing averages are down across the board when compared to the 2016 results. Full equity partner hours dropped by 4.1%, trainees by 10.5% and paralegals by a whopping 16.6%.

The latest comments from across Legal Cheek

One explanation for this drop, particularly at the junior end of the profession, could be City law firm clients looking to slash hefty legal costs.

Earlier this year, Legal Cheek reported that Deutsche Bank had told its panel of external law firms that it was no longer willing to cough up cash for work completed by trainees and NQs. Reacting to the news, one partner said:

“This is something I have seen for the first time this year. I think it is fair enough for trainees, but for NQs it seems very unfair — they are proper solicitors, so why should they not be paid? I have heard about this at other banks; usually in the US, but never in Europe.”

Meanwhile, some law firms have adopted some slightly unusual tactics to ensure billing remains as high as possible.

Nabarro — which along with Olswang merged with CMS earlier this year — told its lawyers that they could bill clients while on the toilet. Why? Well, according the firm, its dedicated army of associates would “still be thinking about” their client’s problem even while having a pee.

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27 Comments

Anonymous

This is completely unsurprising. Partners also have to bring in business and undertake BD / marketing, perform HR functions, manage their teams and train their associates. Partners work more than NQs overall, and don’t have to undertake the sort of long-winded tasks which boost junior associate hours (e.g. big drafting jobs).

Anonymous

I was about to make that comment – the analysis in this article is typical of someone who’s never worked in a law firm. Tom doesn’t realise that some partners in law firms spend a whole day out and about meeting clients/potential clients.

Anonymous

Partners still earn disproportionate amounts. Does 10 x NQ salary really justify a few lunches?

Anonymous

You’re forgetting that many partners get drawings not a salary. Therefore, their earnings are linked to the profit of the firm not their chargeable hours.

Anonymous

So what?! They still earn millions

Anonymous

After years of hard work and building a reputation it is the market rate to earn a large amount. What’s your issue?

Anonymous

Ah, yes. They earn millions, so the only logical conclusion is that they are doing so unjustly. We should just assume that they are fleecing their associates, and that each partner’s years of work in building a reputation and nurturing a network of clients and contacts is really just a few lunches that anyone could easily do.

You genuinely don’t seem to understand that having lunch with a client is not about lunch. It’s about building a relationship and providing the client with confidence that you are the right lawyer to advise their company and make them look good in front of the board. The way to build that confidence is to provide the client with clear, concise, practical answers to hard questions. Doing so requires deep knowledge and years of experience. If you don’t have that, then all the lunches in the world won’t cause the client to instruct you.

Anonymous

Broadly I agree with you, but it stings to be told the firm won’t boost our trainee salaries by a couple of grand while the partners take home an extra £50k that year. I understand why it’s that way (mainly because the trainee salary is enough to attract the best grads and that’s all it needs to be) but it’s still a bit rubbish

Adam Smith

Fair enough, but: (1) as a trainee you are basically unsackable, unlike a partner who can (at most firms) be removed by a vote of other partners who might just happen to not like him or her, for any or no reason; and (2) your TC is only for 2 years – at the end of it, do what I did and move to a firm that will pay you what you’re worth. If no firm will pay you that amount, then you may wish to revisit your assessment of your own capabilities.

Scrooge McDuck

I am having a good laugh at the trainees in this thread who seem to think they are entitled to massive money just because they own a suit and spent one year at law school. Get over yourselves. All the “hard work” you have done in the last 6 months is trivial compared to what partners have been through.

Elephant123

It’s not “just a few lunches”. Get real.

anonymous

Are you some sort of Corbynista?

Anonymous

So when you say the chart detailing the top 100 firms is below, you mean the chart details the top 10 firms?

Anonymous

Hours billed are also linked to bonuses for associates …

Anonymous

You’re forgetting that oftentimes the hours billed by the partner is just reviewing the work done by the associates before putting their name to it.

In that sense there’s an even greater dichotomy on the amount of actual work done versus billable hours.

But hey, whoever told you law firms weren’t a pyramid scheme lied to you.

Anonymous

You’re assuming that work undertaken by associates is always of a sufficient standard, and that the “reviewing” done by partners only takes a few minutes…

Anonymous

They may bill less in hours but their hourly rate will be higher = higher receivables!

Also, remember a lot of the partners were most likely trainees and NQs at their firm so have done their time!

Anonymous

The excuse of people “doing their time” drives unhealthy work practice, inefficiency, a poor firm culture and is likely to deter competent lawyers from joining or remaining at a firm.

Adam Smith

No. It’s market economics. Let’s say that Firm A decided that each lawyer’s pay should be in direct proportion to the money he or she brings in (i.e., hourly rate x hours worked). Junior lawyer pay would shoot up, but senior lawyer pay would contract significantly. The result would be that all the senior lawyers would leave that Firm A, and go to firms that use the standard law firm pay structure. Firm A would then have few or no senior lawyers, and would therefore find it extremely difficult to attract clients.

As hard as it may be to accept, the value of a lawyer is not simply “hourly rate x hours worked”. A lot of other factors, including knowledge, experience and soft skills have a significant impact on how many clients will pay money for that lawyer’s advice, and at what rates. Clients are willing to pay more to get advice from senior lawyers who have taken the time to develop those skills. Accordingly, those lawyers are harder to attract and keep, so firms pay them more.

Anonymous

The article flicks between chargeable hours and billed hours which are different. I’d be surprised if the average chargeable hours for NQs at the top 10 firms was c1,400.

Anonymous

Again, this is because the writer has never worked in a law firm so does not understand these basics.

Anonymous

P1ss poor

Anonymous

Well, let’s put it to the test.
If you did a training contract with a partner….thumb down if you think you worked harder than they did 😁

Anonymous

I like to film myself when I draft contractual clauses. My eyes go a glowing green and steam can be seem emanating from my forehead.

I like slush puppies. I’ll pup your slush if you slu my uppies.

Average Wage

So the story is that NQs in City Firms work 27.63 hours a week and only make 400% more than the average wage for working 35 hours a week. Or to put it another way 200% more than an NHS Doctor for working 80 hours a week (doing a job requiring actuall skill).

Boo Hoo. There is a simple solution. Set up your own firm, put you capital in, take the risks and draw an equity partner’s profit draw. If you lack the balls to do that and want to be an employee rather than self-employed, then stop whining that you only get paid as an employee more than everyone else in the UK.

Anonymous

While I agree with your sentiment, there is a difference between hours billed and hours worked. Clearly City NQs aren’t clocking off at 3pm every day…

Anonymous

Yes, and junior doctors should stop moaning and set up their own hospitals.

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