Lawyers won't be seeing bonuses anytime soon, according to sobering research. Photo / NZME
Lawyers won't be seeing bonuses anytime soon, according to sobering research. Photo / NZME
COMMENT:
The Christmas Bonus scheme. Frankly, it's a concept that's so foreign to me, I had to Google it.
While New Zealanders may be feeling the pinch, lawyers - unless you sit among the upper echelons of a firm's elite - won't be seeing bonuses anytime soon, according to sobering researchconducted by the Aotearoa Legal Workers' Union.
The 2019 Employment Information Survey - arguably for the first time - catches a real glimpse of what you might expect to work at some of New Zealand's top law firms.
On salary, Duncan Cotterill comes out last, offering first-year lawyers between $45,000 and $47,000 annual salary. Simpson Grierson offers $46,000, and Russell McVeagh tops that by just $560, offering $46,560.
Meredith Connell comes out on top, giving new starters a salary ranging from $50,000 to $55,000. Bell Gully and Chapman Tripp take home second prize for offering first-year graduates $48,500. And MinterEllisonRuddWatts comes in third place, offering $48,000.
The numbers seem meaningless until you see the average number of hours worked. DLA Piper employees are contracted to work 37.5 hours per week, working an average of 50-54.
MinterEllisonRuddWatts and Russell McVeagh employees might have 37.5 contracted hours per week but work an average 45-49, with 92 per cent of respondents reporting pressure to meet their budget in the case of Minters, and 80 per cent of respondents reporting pressure to meet their budget requirements for Russell McVeagh.
Employees across the board work well beyond their contracted hours, but interestingly Bell Gully somewhat recognises this, as their contracts are to work 40-hour weeks per week.
What does this mean?
Divide one's salary across the average hours worked and many lawyers will find themselves working below minimum wage. The Minimum Wage Act 1983 and Minimum Wage Order 2019 require employers to pay legal workers a minimum of (a) $1416 per fortnight; and (b) $17.70 per hour for each hour over 80 hours worked in a fortnight.
Overall, 28 per cent of respondents said they had worked for an average wage of less than the minimum wage. Another 14 per cent thought they had.
Working overtime is commonplace - which I'd argue needs to be addressed, but not today - so bonuses or time off in lieu (Toil) could effectively compensate.
But according to the survey, and union president Morgan Evans, the compensation system is entirely discretionary. "Toil or bonuses may entirely depend on or are heavily influenced by your supervising partner - and whether they're willing to fight for you with the people that are making the decisions about your remuneration."
Conflict of interest comes to mind, here, as partners of course have a financial disincentive to give bonuses, because it comes straight out of their pockets.
"Frankly, because of the lack of transparency around how salaries and bonuses are calculated, people just don't know if they're being exploited and whether they need to stand up and say hey - 'I think this is unfair'."
Employees across the board work well beyond their contracted hours. Photo / 123RF
Respondents from Russell McVeagh, Simpson Grierson and MinterEllisonRuddWatts had no clue whether bonuses exist, for example. They are discretionary - or performance based - at Meredith Connell, DLA Piper, and Buddle Findlay, with employees having to make 120 per cent of their budget for the year to get a bonus that might be up to 10 per cent of a Bell Gully employee's salary. Incredibly, a bonus may be monetary or be given in the form of vouchers or Netflix subscriptions at DLA Piper.
Evans says end-of-year gifts are common - which can be a nice token of appreciation. But a $200 hamper isn't the equivalent of a bonus and then there's the issue of agency. "You mightn't want a Netflix subscription instead of a bonus, and even so, the cost of that subscription to the firm is a pittance compared to the fees that you're bringing in.
"There's a myth that you don't make any money for your firm in your first few years. Rather, the amount the firm spends on overheads and training you up is said to be such that you're actually an investment on the part of the firm, and you're lucky to have a job."
But it's difficult to see how that could be true, he says.
"Even graduate lawyers are being charged out to clients at $100 to $200 an hour, and they are getting paid not much more than the minimum wage - or below, if they are doing as little as 10 hours a week of overtime, which is the norm for many people."
In the case of Simpson Grierson, Russell McVeagh, MinterEllisonRuddWatts, Chapman Tripp and Buddle Findlay respondents who work overtime could be eligible for Prezzy cards and Toil on a discretionary basis. DLA Piper, Bell Gully and Meredith Connell offer Toil but on a discretionary basis - this of course is a bit of a bummer for those who were hanging out for those Prezzy cards!
Having contacted the eight firms individually, most failed to talk directly to the issue of bonuses, and overtime, citing "wellbeing", "serving clients' business needs" and "transparent practices" instead.
MinterEllisonRuddWatts and Meredith Connell failed to comment.
