Overtime audits may be missing deeper underlying issues

By Jerome Doraisamy|22 January 2020

Whilst it is crucial that law firms monitor the volume of hours worked by younger professionals, such audits might fail to identify broader workplace problems, argues one lawyer.

Late last year, new industrial regulations were handed down requiring law firms to log the quantum of hours worked by graduate lawyers and paralegals to ensure that junior staff are being properly compensated.

Earlier this week, reports about underpayments at international firm Ashurst came to light, to which the firm told Lawyers Weekly that additional payments have been made to staff where necessary on the back of findings from its independent audit.

But while there was hope in October 2019 that requirements to record such overtime might help ensure that emerging lawyers have better cultural expectations, it is possible that the audits currently being undertaken by the big end of town are only scratching the surface of issues facing juniors.

In conversation with Lawyers Weekly, McDonald Murholme principal Trent Hancock said that audits of overtime worked can suffer from two problems.

The first is that they do not necessarily record or measure the pressure that is felt by graduate lawyers to work unreasonable hours. This is a workplace culture issue that can’t necessarily be gleaned from records alone,” he said.

“The second problem stems from the first problem and that is that graduate lawyers may not accurately record their hours out of fear that they may be seen as inefficient. That is, there is a pressure to complete the work in fewer recorded hours to ensure that an entitlement to overtime pay does not arise.

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“This can lead to graduate lawyers working after hours, including on weekends, but not recording these additional hours in timesheets or billable hours.”

What is instead needed, Mr Hancock submitted, is a shift in how graduate lawyers are valued in firms and how their value is communicated to them.

“If the value of a graduate lawyer is reduced to the number of billable hours they are prepared to work, then the issue of unreasonable working hours will always exist, regardless as to whether or not it is reflected in audits,” he posited.

“Similarly, graduate lawyers should be told that they are not expected to work unreasonable hours and that their performance will not be assessed on billable hours but rather the quality of work performed, the efficiency with which it is performed and the outcomes that are achieved.”

When asked about steps that firms can actively take to improve the workplace environment for juniors, Mr Hancock said that proportionate remuneration is “always the first step”.

A firm that benefits from extended working hours should reward their lawyers accordingly. Outside of this, the onus rests on senior supervising lawyers to monitor the attendance of graduate lawyers on a daily basis and ensure that their working hours are reasonable,” he said.

“If not, those senior lawyers should be encouraging, or in some cases directing, the graduate lawyers to only work reasonable hours. Naturally this also requires the regular monitoring of workloads.”

Moreover, there is a role for team leaders to play, he added.

Open communication is obviously quite important. Senior lawyers and partners should create an environment in which graduate lawyers feel comfortable in coming to them with concerns about workload and working hours,” he said.

It is also possible, Mr Hancock noted, that the undertaking of audits of overtime worked could give firms reason to re-evaluate whether or not billable hours are the best way to charge their clients.

In our experience clients are paying for a result – not the amount of time that it takes to achieve a result. Clients also welcome the certainty that comes with a fixed fee arrangement,” he argued.

“This has the added benefit of reducing the amount of pressure on graduate lawyers to achieve a ‘billable hours’ target.”

Overtime audits may be missing deeper underlying issues
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