Maximising your real hourly rate post-pandemic

By Sam Burrett|22 September 2020
Sam Burrett

Too few lawyers actually take the time to calculate how much they’re earning per hour, writes Sam Burrett.

Most people think of lawyers as high-flying, high-income professionals. If you’re a lawyer, you’ve made it to the big time. But few people actually stop to calculate how much lawyers really make per hour. If they did, they’d be shocked at the results.

It’s not that lawyers don’t get paid well. In fact, lawyers earn almost double the median Australian salary. The problem is that being a lawyer costs much more time and money than people think. It is expensive to achieve and maintain the typical lawyer lifestyle.

On the flip side, this challenge presents an opportunity. By calculating your real hourly rate (i.e. what you make minus all the costs associated), you can take charge of your career and align your hard work with appropriate financial rewards.


Now is the time to do that. COVID-19 presents a unique opportunity for lawyers to decrease the costs and hours required to do their work.

Calculate your real hourly rate

The first step to boosting your take-home pay is to understand your real hourly rate. Your lawyer job takes up much more of your time than you realise. Calculating your real hourly rate means accounting for all the extra time you spend doing things because of your job, but outside it.

Examples of work-related activities include:

  • Getting ready for the workday;
  • Commuting;
  • Travelling on work trips;
  • Unwinding after work or on the weekends;
  • Shopping for work clothes or work-related items;
  • Attending CLEs and industry events; and
  • Networking, lunching and grabbing catch-up coffees.

Your real hourly rate also includes the costs that are specific to your work as a lawyer, including:


  • Buying the right kinds of (expensive) clothes and jewellery to fit in with the office culture;
  • Subscriptions to newspapers/industry publications to stay informed and build your “commercial acumen”;
  • Subscriptions to apps or software that help you do your job;
  • Buying books related to your work (including legal textbooks); and
  • Living in an expensive suburb close to your job to reduce commuting time.

Last, but definitely not least, your real hourly rate includes your education and licensing fees:

  • Undergraduate and/or postgraduate HECs debt;
  • Diploma of legal practice course fees (~$10,000);
  • Admission fees and;
  • Law society membership fees.

Some of these costs are unavoidable and some will be covered by your employer. Not all of these costs are inherently negative. They are, however, the costs commonly associated with earning money as a lawyer.

Before we dive into ways you can reduce these costs, let’s explore how this calculation works in practice.

An example

Imagine Sarah has eight years’ PQE working as a corporate generalist both in private practice and in-house. She’s currently working as senior legal counsel for an ASX 200 company. Sarah’s annual pre-tax salary (including super and HECS) is $180,000. Using an online pay calculator to account for tax, superannuation and student loan repayments, we find that Sarah’s weekly take-home salary is about $2,006.41. Working standard 40-hour workweeks, Sarah’s hourly rate comes out to be approximately $50 per hour.

Even at this point, I suspect many people would think that this hourly rate is quite low. Just $50 an hour as a senior legal counsel for a great company? But it gets worse…

How many hours do you actually work?

Sarah is driven, ambitious and working toward a deputy general counsel role in the next few years. She routinely turns up early and stays late to ensure she’s going above and beyond for her team and her clients.

As a result, Sarah actually works 12 hours per day, five days per week, totalling 60 hours per week.

Sarah’s effective hourly rate is now approximately $33 per hour.

How much extra time does your job take?

The next step is to factor in how much time is involved with Sarah’s job beyond her workday. As mentioned above, this includes all the activities required to prepare Sarah for work and all the time she spends as a result of her work as a lawyer.

  • Sarah’s job doesn’t require much travel, but her door-to-door commute takes a total of one hour each day, or five hours per week.
  • Across Saturday and Sunday, Sarah will put in a few hours here and there to check emails and respond to urgent work. A few weekends a month, Sarah will spend a full day working to tackle big projects and urgent overflow. I’ve assumed this would average out to about four hours of extra work per weekend.
  • Sarah also spends an hour per day de-stressing after work (drinking wine and watching Netflix) and an hour using social media on her phone to connect with people she cannot speak to while at work, totalling 10 hours per week of relaxation time resulting from her work routine.

The result is that Sarah spends an extra 19 hours per week on work-related activities, bringing her total work-related hours to 79 hours per week.

What does it cost to do your job?

In addition to her extra hours, there are also costs associated with Sarah’s job.

These include:

  • Buying food and coffee - $30 per day;
  • Commuting (Sarah drives a car which, including petrol, tolls and servicing costs) – averages out to $90 per week; and
  • Other work-related expenses (work clothes, the latest Apple computer/phone, ad hoc stationary, computer software) - average out to $100 per month.

Some of these costs are absorbed by her employer, but some come out of Sarah’s own pocket. All things considered, I’ve estimated it costs Sarah an average of $1,160 per month to do her job, or $290 per week.

What are you left with?

We started this calculation with an annual salary of $180,000, which equated to an hourly rate of about $50.

Factoring in the necessary expenses involved with Sarah’s job and the extra time she puts in to be a good lawyer, Sarah’s actual hourly rate is just $21.06. Obviously, it is expensive and time-consuming to be a lawyer, and as a result, lawyers do not take home as much money as you might assume.

Imagine Sarah buys a $20 bottle of wine after work to relax. She now has to work another whole hour to earn that money back. If she buys a new suit for $400, she must work 19 more hours.

Some lawyers might concede that there are some inevitable costs associated with being a lawyer. Perhaps these costs are offset by the plethora of benefits of being a lawyer beyond the real hourly rate.

However, I believe most lawyers will look at Sarah’s hourly rate and feel disappointed. Most lawyers have incredible work ethic and deserve to be rewarded for their efforts. So the question becomes: how can I maximise my real take-home pay?

When you know how much you really take home for your time, you are empowered to maximise your income. I believe that now is one of the best times in lawyer history to do that.

The COVID-19 opportunity

Remote working has presented an opportunity for lawyers who understand the costs of lawyering to increase their real income by eliminating work-related expenses and reclaiming work-related hours to focus on what they really value.

While you might really enjoy the views from your office and love being part of the office culture, working remotely will decrease your office-related expenses. Fewer lunches, coffees or shopping trips for new suits means you can put more money and time into the things you truly value.

Maybe you hate the commute and want to save three to five hours per week (plus associated travel costs) by working from home 60 per cent of the time. You could even put some of that time into starting a side project or doing some freelance work to help boost your real income.

In addition, remote working can help you decrease stress, which has a flow-on impact on your finances. Less stress from office politics or the daily grind means you don’t need to spend as much time or money “unwinding” by purchasing new things, going on expensive trips or paying for drinks at the bar.

Here are some other examples of income-maximising practices that are now possible:

  • Efficient and cost-effective networking via Zoom calls and online events;
  • Less time spent moving around the office for meetings or catch-ups; and
  • More uninterrupted focus time to spend on complex legal tasks, thus reducing total work hours.

While COVID-19 and the ensuing economic fallout will no doubt leave many lawyers financially worse off, there is also a silver lining for those who capitalise on new remote working practices to maximise their time and income.

Beyond remote work

The truth is that working from home isn’t a silver bullet; it’s just the start. The real key to maximising your hourly rate is to align your work with your values.
COVID-19 has forced all of us to consider the value of our work without the trimmings. Beyond the flashy suits and beautiful harbour views, is your work meaningful enough to justify your $20 real hourly rate? Could you do something else and make the same, if not more money? And if you do enjoy your work, can you rearrange your lifestyle so that you’re maximising the rewards you get for your time?

What will make a huge, lasting impact on your income is your ability to realign your pay cheque with your values and to match your inputs with your outputs. To increase your income, you must maximise the amount of time you spend doing activities you get paid for, not paying to do your job. But first, you need to know what it costs to be a lawyer, and that starts with understanding your real hourly rate.

Sam Burrett is an associate director at Plexus.

Maximising your real hourly rate post-pandemic
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