Law firms are betting their junior lawyers will choose not to take advantage of new industrial regulations requiring them to clock all their overtime – rules that challenge the profession’s traditional long-hours culture.
From March, law firms must record all hours worked by graduate lawyers and paralegals, no matter how high the salary, to ensure they are not paid below minimum rates or are losing out on penalties as a result of their long hours.
According to the Law Society of NSW, grads at mid-tier firms generally earn $60,000 – $65,000 and top-tiers $70,000 – $80,000. Glenn Hunt
A group of 20 law firms, including Ashurst, King & Wood Mallesons and Herbert Smith Freehills, said the rules would require a “fundamental shift” in how professional staff are managed, even when they were paid well above minimum rates.
Clyde & Co managing partner Michael Tooma said the rules could be a “game changer” and “spur more lateral thinking” to avoid the need for overwork.
“Employers are not making these decisions [around workload] with a long-term perspective of lawyers’ sustainability and wellbeing, and perhaps this law change will see us shift that perspective to consider the cost to that.”
Several senior partners privately dismissed the effect of the changes, however, predicting no graduate lawyer was going to complain about unpaid hours because they will be grateful for the job.
The Australian Services Union, which represents graduate lawyers including at Maurice Blackburn and Slater & Gordon, warned firms that ignored the new requirements did so at their peril.
Many young corporate lawyers say their job entails excessive hours and an attitude from senior partners of “whatever the client wants, we do”.
The Fair Work Commission approved the rules as part of changes to annualised salaries provisions in 19 industry awards. The changes also included requirements to conduct annual pay reconciliations and advise lawyers of the maximum hours they can work under their salary before they become entitled to overtime or penalty rates in the award.
‘Absurd red tape’
Employer groups have slammed the requirements as “absurd” red tape, and doubts remain on whether the rules will make a difference in an industry reliant on self-reporting and where lawyers are historically reluctant to complain.
Chairman of industry mental health advocacy group Minds Count Foundation, David Field, reinforced this view: “Law firms have typically thought themselves to be above the law and normal workplace safety rules.
“There’s a sense of, ‘if you don’t like it, you can leave, there’s 10 people out there who would want your job’.
“So I’m a little dubious on [the effectiveness] of any rules that relies on employees recording their own hours, especially on graduates who are lowest in the hierarchy and most vulnerable.”
The group of 20 law firms told the Fair Work Commission earlier this year the changes would require a “fundamental shift in how remuneration for professional staff must be managed”.
The group presented an industry survey of 19 firms that found 42 per cent do not have capabilities to record start and finish times and unpaid breaks.
One of the sector’s biggest concerns is that the new rules will apply to graduates even if they are compensated well above minimum rates so as to make underpayments improbable if not impossible.
According to the Law Society of NSW, grads at mid-tier firms generally earn $60,000 – $65,000 and top-tiers $70,000 – $80,000.
But young lawyers surveyed by The Australian Financial Review earlier this year said the value of those salaries diminished relative to hours worked.
“I think there’s a public perception that we’re paid a lot more than we actually are considering the amount of hours that we do,” one said.
The young lawyers ranked aligning base pay with overtime worked as the second-most important change that could improve their lives.
Mr Field, who started as a graduate at King & Wood Mallesons, said he had worked “a handful of 100-hour weeks” and argued firms were not taking action even with evidence of overworking from billable hours records.
ASU assistant national secretary Linda White questioned firms that dared not to comply with the rules.
“The law’s okay for everyone else except lawyers?” she said.
“If I was a senior partner in a law firm I wouldn’t sit back and think no one’s going to enforce it. The winds of change are around.
“People can get organised and if you push them far enough they will get organised. They are not without power.”
The issue of excessive hours at top-tier law firms reared its head last year when, in a first for the industry, WorkSafe investigated King & Wood Mallesons for overworking graduate lawyers and support staff during the Hayne royal commission, with some lawyers sleeping in the office because of late hours.
A Gilbert + Tobin solicitor also alleged to SafeWork NSW in November that they feared “extreme” working conditions had reached a “point [where] someone will die or have some other physical or mental health episode”.
While the complaints did not result in formal sanctions they were a watershed moment for the legal industry, and seen as a warning that employees were more willing to speak out about excessive hours.
Young lawyers don’t want that
Lisa Gazis, managing director of legal recruitment firm Mahlab, said law firms’ business model relied on working young lawyers hard with the idea that they can earn more money when they make partner.
However, she said fewer young lawyers were willing to put their lives on hold as the time required to reach partnership increased.
“The hours of work and pressure are changing that model. Young lawyers don’t want to get into that queue for the partnership track.”
Law Institute of Victoria director Brendan Locata warned the effectiveness of the Fair Work rules may be limited as lawyers were not covered by an award once they received their practising certificate.
“They’re a step in the right direction because a lot of graduates, paralegals and admin support staff burn out and leave the industry.
“But they’re only plugging a gap – as junior lawyers aren’t covered by the award, they miss a huge portion of the vulnerable employees they seek to protect.”
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