Rewards of the job

As the 2010 Cost of Time Survey shows static or falling profits in many types of legal practice (see report on p16), so pay freezes and reduced hours have become commonplace for individual solicitors. But that has not prevented many from achieving advancement over the past year, and it appears that the majority continue to work considerably more than their contracted hours.

These are among the findings of the Journal’s first Employment survey of Law Society of Scotland members. Members were emailed during January with an invitation to complete the online survey; almost 1,200 responded. To each of you who did, many thanks.

Respondents came from all sectors and practice areas, though with a higher proportion of more senior lawyers (10 or more years qualified) than the recently admitted; and with a higher proportion of in-house lawyers (over 35%) than in the profession at large (about 26%). They also break down into 57.5% women and 42.5% men; and of those employed (5% were not), 81% full time and 13% part time (others were locum, contract or on secondment).

Scope to advance

It is a reasonable inference that people are willing to change jobs in order to boost their earnings: despite 70% of respondents saying that a pay freeze has been in force at their place of work in the past year, 52.7% have personally increased their earnings. Internal promotions were not separately identified in the questions, but overall 20.6% reported that they had been in their present post for less than 12 months.

Alan Clark, legal specialist at Thorpe Molloy Recruitment believes that a freeze has encouraged some people to move. “Although there was an appreciation of the economic climate amongst the legal profession, we often heard candidates indicating that they were dissatisfied with a blanket pay freeze across the board, particularly if they were operating in a niche or busy field”, he says. “Undoubtedly this led to people exploring opportunities to advance their career, and increase their salary, and it represented an opportunity for firms to seize on this and recruit high calibre staff who were unsettled.”

Also part of the equation is the influence of benefits packages, which Clark believes are becoming increasingly important. “Candidates are more often considering elements such as pension contributions, healthcare and other softer benefits over and above base salary”, he says. “From speaking to the firms we deal with, there is an acute understanding of the need to offer a competitive benefits package in order to both attract and then retain high-quality staff. In the Aberdeen market where we have particular expertise, the issue of benefits is even more apparent, with the oil and gas companies offering an extensive raft of benefits. These are a major attraction and a reason why some lawyers in the region leave private practice to move into industry roles.”

Any more equal?

Can the results tell us anything about the state of equal pay in the profession at the moment? A survey carried out for the Society in 2005 (Journal, November 2005, 14) revealed a gap between the sexes that increased markedly with the number of years’ PQE, so that above 20 years qualified the average salary gap was as much as £36,000. This was only partly explained by the higher proportion of women having taken time out to look after a family.

This year’s survey indicates that the gap is still there, but less wide. At 10+ years qualified, for example, 54% of men compared with 29% of women claimed to be in the salary bands above £60,000 a year; for bands above £80,000 the figures were 30% to 13%, and above £100,000, 19% and 7%. But many women at this stage appear to be balancing work and domestic responsibilities: 37% of women but only 6.5% of men count themselves part time.

Another figure, not unrelated, which probably does not come as a surprise is that at 10+ years PQE, 43% of men, but only 17% of women, who responded are equity or non-equity partners, whereas at senior solicitor/associate/senior associate level women outscore men by a total of 60% to 34%.

Some responses suggest that the seeds for the gap might be sown at a much earlier stage. By the stage of 2-4 years’ PQE, for example, 52.4% of men, but 30% of women, had reached associate level. (At senior solicitor, however, women led by 63% to 43%.) And 41% of men, compared with 23% of women, had been in post for less than two years. No clear pattern emerges of differences in earnings, and the proportions satisfied or otherwise with their salary at this stage are almost identical, but could it indicate that men are quicker to move to secure advancement?

Clark thinks it would be wrong to suggest that women are less ambitious. “Generally, we have not noticed a trend amongst candidates to suggest this”, he observed. “Men and women will always look for ways to better themselves and that sometimes means making a move to progress your career. There is also a perception that in the early years post-qualifying, it can benefit your career by making a move in order to broaden your horizons and gain experience in a different environment. However, it is equally fair to acknowledge that firms identify talent amongst their pool of trainees and can retain those individuals by providing them with a clear and transparent path to progress.”

At any event, by the time we reach the 4-10 years’ qualified band (at which 42.5% of men compared with 34.6% of women are still without dependants), we find 23% of men, and 15% of women, at partner or senior associate level. The proportions at associate status are almost identical (38%-37%), whereas at senior solicitor and below, women are in the majority. As for earnings at this stage, men have the edge at £50,000 and above (40% to 24%), though 36% of women (29% of men) are in the £40-50,000 band. But there appears to be no significant difference in readiness to move: slightly more men than women had been in their present post for less than a year; but the numbers were reversed at 1-2 years and 2-4 years in present post, and men again had a slight majority in the bands above four years.

Happy with their lot?

As for satisfaction levels, it isn’t necessarily the junior lawyers who are least content with pay – perhaps recognising that times are tough for those coming through at present.

“The salaries for NQs have stagnated and decreased during the downturn and it is not entirely surprising that there are some people in that PQE bracket feeling underpaid”, says Clark. “In the past, the general trend was that you could achieve a significant uplift from your trainee wage once you qualified – that was certainly the position when I qualified back in 2006 – but with many firms offering only a moderate uplift and some even retaining NQs on a trainee salary, you begin to see why this is so. That said, there is now an increasing appreciation amongst those starting out in the profession that they need to be realistic with regards to salary expectations post-qualifying, particularly given the increased number of NQs that find themselves out of work.”

In fact the reported satisfaction level for NQs (75% of women; 58% of men) compares with 56%/54% at 2-4 years and 60%/58% at 4-10 years; and is also higher overall than the 59% women and 60% men at 10+ years.

There is also a generally higher satisfaction with benefits than with pay (about a 6% gap overall), although benefits are more likely to have been cut.

In-house: better, or just different?

For the in-house lawyer the results also turn up some interesting figures. As between the public sector and private practice there is no clear pattern of pay differential (the percentage in private practice earning below £40,000 a year was actually slightly higher at 51.5% compared with 48.9% in-house), though there are fewer public sector individuals in the highest bands: just 3.5% said they earn over £80,000 a year compared with 10.6% in private practice. But just over 80% in the public sector are still in final salary pension schemes, compared with 19% private sector in-house and only 2% in private practice. And the in-house private sector appears to be doing quite well salarywise: around 25% are in the under £40,000 brackets, while nearly 35% reported that they earn over £80,000 (and over half of these are above £100,000).

The most common benefits reported by the private sector were private health care and a commission or bonus scheme, each at just under half of all respondents. Benefits in private practice are generally fewer: the highest score was for over 25 days’ annual holiday (29%), and 26% reported no benefits at all, compared with about 8% and 2% respectively in the private and public sectors.

The public sector is most likely to have been under a pay freeze (77%), compared with 68% private practice and 59% in-house private sector; but features second as a percentage satisfied or very satisfied with salary (65%), behind the private sector at 74% but ahead of private practice at 57%. But those in the private in-house sector still seem to be more on the lookout for a change: 40% would seek to move if the right job came up, and 12% are actively looking for one, compared with 37% and 10% in the public sector and 33% and 10% in private practice.

Long hours culture

If anyone doubted it, the survey confirms that many lawyers work significantly more than their contracted hours. Overall, 76% say their official hours are between 35 and 44 a week (19% are less than that and 5% more), whereas in reality 13% work fewer than 35 hours, 45% between 35 and 44, 33% 45-54 hours, 7% 55-64, and about one in 40 claim to do more than 65 hours a week. A male-female gap opens up with increasing seniority, probably reflecting the increased likelihood of women balancing career and family at that stage; though among newly qualifieds, whereas 35% of women compared with 25% of men work between 45 and 54 hours weekly, fewer than 5% of women, but over 16% of men, are already working more than 55 hours.

Here again the public sector seems to fare better, with 17% working fewer than 35 hours a week, 60% 35-44 hours, and only 5% more than 55: the respective figures for private practice are 11%, 40% and 10%, and for in-house private sector, 16%, 40% and 12.5%. In each case the 45-54 hour band represents the balance: 49% private practice, 44% private sector, and 23% public sector.

Clark comments: “The legal profession attracts high calibre individuals and there is no doubt that at the current time, there are demands being placed on them by clients in what is a competitive market. It is an encouraging sign that the firms are getting busier. With redundancies and reduced staffing levels, it is unsurprising that there is increasing pressure on those lawyers that remain. That said, we are beginning to see firms return to recruitment mode and this may well help to address this issue. However, there is an understanding that in certain areas, particularly corporate and oil and gas, when there are deals ongoing, there is a requirement to work over and above your contracted hours, and that will never change.”