Why partners are billing more

The report — which, as reported last week by Lawyers Weekly, found that law firms in Australia “have consistently outperformed” their global counterparts — reveals a substantial jump in the volume of annual utilisation by partners relative to all other fee earners compared to the time before the COVID-19 pandemic.

At the start of the COVID-19 pandemic, Thomson Reuters wrote, “many firms recorded a significant jump in partner billable hours relative to other fee earners. Clients demanded more direct access to partners to address their most pressing issues”.

“Further, remote working made delegation to less experienced team members more clunky, and partners were keen not to overburden their at-capacity senior associates,” it said.

In the words of one partner contributing to the Thomson Reuters report: “When that urgent client matter arrived on my desk after a busy week, I found it really hard to ask my exhausted associates to work on it. What typically happened was that I took it home and did it all myself.”

How much more are partners billing?

According to Thomson Reuters’ report, the balance in the average volume of billable hours worked per partner versus fee-earning lawyer has shifted.

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As far back as 2015, fee earners were billing 3.2 per cent more hours than partners, with that disparity slowly decreasing as 2020 approached. In that year, fee earners billed 1.4 per cent more hours than partners.

However, in 2021, partners billed 1.1 per cent more hours than fee earners on average, and this year has seen a significant jump: partners are currently billing 3.6 per cent more than fee earners — to the tune of approximately 50 more hours per annum.

In 2022, partners are billing — on average — more than 1,250 hours, whereas in 2015 and 2016, they billed an average of approximately 1,140. By contrast, all other fee earners are billing around 1,210 hours per year, Thomson Reuters noted.

Impact of increased billing

Nine-quarters have elapsed since the onset of COVID-19 back in early 2020, and it would be reasonable to have expected, Thomson Reuters mused, that normalcy would have returned by now — that is, partners should be able to delegate accordingly to better manage their own workloads.

However, it wrote, “evidence is to the contrary”.

“Not only have partners been billing more, but they’ve also had to spend a greater proportion of their time recruiting new staff — greatly adding to their time pressure.

“With every new person that joins the team, there is usually a significant amount of time spent in job scoping, candidate interviews, selection, remuneration package negotiation, on-boarding, and team integration,” Thomson Reuters said.

“While recruiters and other staff may do most of the heavy lifting, partners are still actively involved in many steps of this process.”

This prolonged increase in billables, and extended time spent on recruitment, is contributing to lower levels of wellbeing and job satisfaction, Thomson Reuters found.

Just 32 per cent of Australian professionals surveyed (91 per cent of whom are partners) noted their work provides high levels of satisfaction towards the sense of purpose they have in life, compared to 42 per cent globally. Moreover, just over one-quarter (27 per cent) of Australians said the work they are doing helps progress their personal goals, in contrast to 39 per cent overseas.

This said, Thomson Reuters added, 60 per cent of Australian partners did feel highly satisfied with their income level, compared to 49 per cent globally.