Will law firms record overtime of more than just their grads?

By Jerome Doraisamy and Naomi Neilson|30 October 2019

New industrial regulations will see law firms record the hours undertaken by their most junior legal professionals. But, given that lawyers with a few years of experience are most dissatisfied with their employers, wouldn’t it make sense to monitor the work this demographic is burdened with, too?

Fair Work Commission ruling

Last week, it was reported that new rules – imposed by the Fair Work Commission and coming into effect next March – will see a group of 20 law firms record the overtime of its younger staff, requiring those firms to conduct annual pay reconciliations and advise lawyers of maximum hours they can work under salary before they are entitled to overtime or penalty rates.

“It is the responsibility of the employer to ensure the wellbeing of employees, including young lawyers, especially in times of pressure, and to make sure they are adequately remunerated and have the appropriate time off to compensate for additional hours,” posited Law Society of NSW CEO Michael Tidball at the time.

Travis Schultz Law principal Travis Schultz agreed, calling the shift “long overdue” and arguing that a “degree of recalibration” of work-life balance and working hours expectations would be required to sustain the future of the profession.

But while it is important for employers to better accommodate for the wellness needs of its most junior legal professionals, the FWC ruling arguably gives firms an opening to better address the levels of satisfaction, or otherwise, of perhaps its most vulnerable demographic.

Lawyers with 1-3 years of PQE are the least satisfied of all

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According to the Legal Firm of Choice Survey 2019, conducted by Lawyers Weekly in conjunction with Momentum Intelligence, satisfaction levels are high among graduate lawyers entering firms, but these drop off significantly once lawyers have one to three years of experience under their belts.

On a scale of one to five, lawyers with less than one year of experience have a satisfaction rating of 3.91, which drops to 3.41 a few years later.

This correlates by age, with lawyers aged 18 to 25 having an average satisfaction rating of 3.96 compared to those aged 26 to 34 (3.67).

What is even more worrying for law firms, however, is the intended rates of attrition for lawyers with one to three years of experience (a demographic made up primarily of persons aged 26 to 34).

According to the research, 53.2 per cent of lawyers with one to three years of experience intend to leave their current employers, compared to 38.9 per cent of those with less than a year under their belts.

When contrasted by age, 44.6 per cent of those aged 26 to 34 are going to leave their firms, compared to 36.6 per cent of those aged 18 to 25.

So, how will firms respond?

To better understand the next steps of firms in monitoring hours worked, Lawyers Weekly contacted all 20 firms that made a submission under Law Firm Australia when the Fairwork Commission was reviewing the award: Arnold Bloch Leibler, Allen & Overy, Allens, Ashurst, Baker McKenzie, Clayton Utz, Corrs, Davies Collison Cave, DLA Piper, Gadens, Gilbert + Tobin, Hall and Wilcox, Herbert Smith Freehills, King & Wood Mallesons, Lander & Rogers, Maddocks, MinterEllison, Norton Rose Fulbright, Piper Alderman and Russell Kennedy Lawyers.

Spokespeople for both Allens and Ashurst said they are in the process of ensuring they are meeting their new obligations under the award, in time for March 2020.

A spokesperson for Clayton Utz said employee satisfaction will come from more than recognition for the hours worked, “although we recognise discretionary effort in different ways through our recognition program”.

“It’s about the work environment you create and what you have to offer as an employer. That might be the opportunity to do interesting and challenging work (including pro bono work), participate in professional development programs, volunteer in the community, participate in social or sporting activities, or get involved in networks and give voice to cultural diversity or LGBTI rights.”

DLA Piper Australian managing partner Amber Matthews provided the most comprehensive response, saying that the firm’s people are its most important asset, and thus ensuring they feel supported, valued and respected is her “utmost priority”.

“The Fair Work Commission’s decision on reporting requirements for annualised wage agreements applies to all our employees under the Legal Services Award. We are currently working through the required changes, ready for implementation when they come into effect,” she said.

“But monitoring working hours is just one part of a number of initiatives and policies we already have in place to ensure the health, safety and wellbeing of our employees. Increasing flexibility and agile working are a key focus for us. Our traditional ways of working are longstanding and hard to shift, designed in a time when societal norms and technology were very different. One of the things we’re currently focused on is embedding a culture of ad hoc flexibility and moving towards a more output-driven culture.

“We are committed to really delivering a shift in behaviour here, and it will no doubt help us attract and retain the best people. But we recognise the ongoing work required to continue to improve, help champion similar change across our industry.”

G+T said it would comply with the new requirements but wouldn’t record hours outside of the prescribed requirements, citing administrative burdens.

“Gilbert + Tobin will comply with the new requirements. We will record all hours and times worked by the groups falling under the change in the reward – paralegals and graduate lawyers,” it said in a statement.

“We won’t record hours worked by others other than those required by the legislation, as it would be a huge administration undertaking. It’s a workplace law and we need to comply. Time will tell in relation to employee satisfaction levels and we will continue to monitor these.”

Herbert Smith Freehills said they are currently reviewing the decision and current remuneration processes to ensure the firm is compliant by March 2020.

King Wood & Mallesons chief executive partner Berkeley Cox said the firm is working through implications and how to best implement the changes: “We will continue to ensure that our people are appropriately remunerated and comply with any requirements under the award.

“We will continue to actively monitor and manage working hours of our people as part of ensuring our people are appropriately remunerated and as part of our overarching people strategy – which seeks to place sustainable working hours and rest and recovery at the centre of our operating model.”

Maddocks briefly responded, with CEO Michelle Dixon noting: “We have annualised wage arrangements in place for our lawyers and we are currently assessing the implications, if any, of the decision for us.”

Arnold Bloch Leibler, Bakers, Landers, Minters and Pipers all declined to comment.

At the time of filing this story, Allen & Overy, Corrs, Davies Collison Cave, Gadens, Hall & Wilcox, NRF and Russell Kennedy had not responded to questioning.

Correction: An earlier version of this article stated the Award applied to just 20 law firms, when it is in fact an industry-wide change. The 20 law firms contacted for this article made a submission under Law Firms Australia when the Fairwork Commission was reviewing the Award

Will law firms record overtime of more than just their grads?
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