Salary equations in law

On LinkedIn this week, several people commented on a story that big US law firms in London expected their associates to work 14-hour days. Among the platitudes expressed were:

  • how can employers have such unreasonable expectations?
  • what about mental health?
  • why aren’t clients applying pressure to stop this?

Nobody mentioned the salaries. IP Draughts found an article this morning suggesting that the salary for newly-qualifieds in major US firms in London had reached £179,000. To make a profit on the services of someone earning this level of salary, it is inevitable that long hours are required.

If you are young, energetic, talented, hard-working, and mentally-robust, a salary at this level might tempt you to apply. If your ambition and temperament are aligned with the firm, you might decide to stay there for many years. Perhaps part of the calculation is that there is a risk you will burn out after a few years, but you will be able to leave before serious damage is done. In the meantime, you will have gained experience and a good CV entry, which will help you to shift gear into a more forgiving environment.

IP Draughts doesn’t blame young lawyers if they have this mindset, which in the case of US law firms involves a financially supercharged version of the calculation that has long been made about working in major firms in the City of London. But he thinks there is a better way, particularly if your mix of ambitions tends more towards excellence than salary. And particularly if you specialise in a subject such as IP.

When he read the article on LinkedIn, IP Draughts started to think about the correlation between hours and salary. Higher salary = longer hours, but it isn’t a linear relationship. Other factors come into the mix, including how stressful the work environment is, whether the work is intellectually stimulating, whether you are acquiring transferable skills, how good the training is, the quality of the clients, and so on. If the variables reflect the pie chart at the top of this article, the equation should lead to a very high salary indeed.

Having a very high salary has never been a strong movitator for IP Draughts. His preferred mix of variables might look more like the following chart:

Pie2

The mix was probably different when he was a junior associate, but not totally different: in 1987, he had two job offers at the same time, one from a City law firm at £25,000, and the other from a specialist IP firm at £22,000 (plus a non-contractual Christmas bonus). He chose the latter.

As for the platitudes, IP Draughts has the following observations:

  • The expectations on working hours come with the salary. It’s a pact between employer and employee, both of whom are strongly motivated by money.
  • All employers of lawyers should be concerned about the possibility of their mental ill-health, and support people who suffer from it. In IP Draughts’ non-medical opinion, there is no automatic correlation between long hours and ill-health, and he wouldn’t wish to be prescriptive about the US law firms’ business model. He does, though, think the Law Society of England and Wales should focus more on junior lawyers’ well-being, including in commercial law firms. He hopes the Law Society’s current initiative to engage more with junior lawyers will focus on this subject.
  • Many of the clients of major law firms – the ones paying the fees that support the associates’ salaries – are in the financial sector, where people seem to be strongly motivated by money and work very long hours. IP Draughts doesn’t expect them to apply pressure to improve the lot of law firm associates any time soon.

1 Comment

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One response to “Salary equations in law

  1. t2kpatents

    https://www.legalcheek.com/2022/11/baker-mckenzie-fees-face-criticism-from-high-court-judge-for-contributing-to-disproportionate-costs/

    Appears the £179K folk are underpaid if they are being charged out at £600 per hour. Should be £200K.

    As for value for money for such inexperienced people, I hope their tea-making skills are 1st class, especially when the £200 per hour staff are busy photocopying. A gravy-train rip-off of corporate funds with the end-consumers paying the price.

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