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Turning point?

10 December 12

This year's Journal employment survey reveals some hope of better things to come, after a difficult year with many people in or close to some serious business restructuring

by Peter Nicholson

2012: the year of the merger. The year also of continuing negative stories about the wider economy, and of particular financial pressures affecting the legal profession. So it is not surprising that the Journal’s latest reader survey of employment terms and rewards conveys a clear picture of some doing better than others.

There are some positive indicators. The proportion of respondents reporting a pay freeze within their organisation dropped from 71.3% last year to 39.3% this year – though in the public sector it hit a massive 84.2%, and sole principals fared little better, 81.8% reporting no rise in earnings. Other “freezing” measures were also less common: see table 3. Overall, 52.9% had had some form of pay rise (up from 47.9%), though often very modest, and 8% as compared with 10.8% had suffered a pay cut (28% for sole principals). The percentage claiming to be satisfied with their salary was also slightly up, from 59.1 to 62.8.

When the ground shifts

Other results, however, illustrate how much change is taking place, if not always publicly. Of those answering the question about recent changes affecting their organisation, one in six (16.9%) said it had been involved in a merger or takeover in the past 12 months, while over a third (36%) reported redundancies, as compared with the 26.4% who checked the “headcount growth” box.

Last year, for the first time, we asked for readers’ assessment of the economic outlook as affecting their organisation. (See Journal, December 2011, 12 for the feature.) This produced some stark contrasts, with sole practitioners and the public sector being particularly pessimistic as to their prospects. This seems to have been justified, as 46.7% of sole practitioners say things have got worse over the past 12 months compared with only 6.7% who take the opposite view – and the balance in the public sector, 68% against 2.5%, is even more negative. Admittedly there were a relatively small number of “sole” responses, for a sector whose ranks have swelled recently (as is mentioned in the interview on p34 of this issue), but on our returns neither category is looking forward to much improvement over the coming year, with negative forecasts outweighing positives by 38.7% to 16.1% among sole principals and by 52.3% to 4.1% in the public sector.

Table 4 shows the fuller cross-sector picture. The only sector to come out slightly positive on balance about the past year is the 10-49 partner firms, but a more optimistic view of 2013 is taken across our medium and large legal practices – and also companies, larger private and quoted, which show quite a turnaround in sentiment between this year and next.

Work-life balance

In each survey to date we have asked how readers’ actual working hours compared with their contractual hours, and not surprisingly found a sizeable percentage who work beyond, and sometimes well beyond, their official hours. This time, in addition, we sought views on the extent to which work interferes with private life. Again the overall figures (“Yes, a lot”: 23.7%; “Yes, sometimes”: 47.6%; “No, not really”: 28.8%) conceal variations.

While a majority at all levels of experience report a level of interference, the average percentage creeps up with seniority – so it isn’t all about downtrodden junior solicitors. The NQ and 0-2 bands report 13-14% replying “a lot” and around 45-50% who say “sometimes”; the former figure rises to 20% at 2-4 years, over 25% at 4-10 and 26-27% beyond that, while the latter consistently hovers around the 50% mark. Interestingly, contractual rights to flexitime, or more informal arrangements, also become more common with seniority, contractual rights rising towards 30% for those with more than 10 years’ PQE, compared with 20% at 0-2 years, and very few at NQ. Are legal rights for those with family responsibilities to request that flexitime be considered, being exercised? Or are people with flexitime rights too busy to exercise them?

It may be that perks generally are added as time goes on. Satisfaction with salary levels shows a gradual decline with added experience, whereas the converse is true with benefits packages. Thus almost 75% of NQs, and over 65% of 0-2 PQEs are satisfied or very satisfied with their remuneration, compared with 63% or below at more senior levels; but only 57% of NQs, 55% of 0-2s and 53% of 2-4s rate their benefits packages, as against 72% at 4-10 years, 75% at 10-20 and 68% above 20 (the last category saw a higher than average number of public sector returns).

Table 2 shows the most frequently enjoyed benefits. The percentage still in a final salary pension scheme is of course much higher in the public sector, at just under four fifths. Mobile phones or smartphones were not on the list of options last year (as with all questions, we adjust the lists to reflect things regularly mentioned under “other – please state”), but have come straight in at no 2, being provided to over 28% of respondents.

Oh yes, the money

As for salaries, table 1 shows a predictable trend, but a surprising diversity at over 20 years. There may be a variety of factors at work here; at all events this group is among the least likely to be looking for a new job, with 4.6% saying they are actively searching and 30% who would apply if the right one came up. Only NQs provide reasonably comparable figures; those at 0-2 years (18.3% actively searching and 38.3% who would go for an opportunity) and 2-4 years (11.1% and 48.1% respectively) are most likely to be in the hunt.

Overall, the survey showed few significant variations from previous years in the breakdown of respondents, of whom there were almost 1,000, so if not quite a rigorous scientific study, it should at least provide some interesting pointers as to trends and prospects in the Scottish solicitor profession at present. Like most of the country, we could do with some economic cheer.

Table 1

Salary concentrations by PQE (full time contracts)

  £20-<30,000 £30-<40,000 £40-<50,000 £50-<60,000 £60-<70,000 Higher bands
NQ 48.6% 37.1%        
0-2 PQE  39.0%  49.2%        
2-4 PQE  14.5%  60.9%  14.5%      
4-10 PQE    25.7%  31.6%  18.7%    
10-20 PQE      14.1%  18.8%  13.3%  41.5%
20+ PQE    16.1%  13.9% 14.6%  14.6%  38.5%

 

 

 

 

 

 

 

 

 

 

Table 2

Which benefits do you currently receive? (Top responses, all sectors)

  %
More than 25 days’ holiday (excluding public holidays) 37.1
Mobile phone/smartphone 28.4
Pension: final salary 23.3
Private health care 21.6
Ability to buy/sell annual leave 20.7
Training support (work related) 20.6
Pension (money purchase) 19.1
Cash bonus (individual performance) 18.6
Pension (stakeholder) 17.3
Cash bonus (firm performance) 16.7
Health insurance 16.1 16.1
[None] 12.4

 

Table 3

Has your organisation experienced any of the following over the past 12 months?

  %  % change on 2011
Pay freeze 39.3 –32.0
Redundancies 36.0 [not available]
Headcount growth 26.4 [not available]
Merger or takeover 16.9 [not available]
Bonuses scrapped or suspended 11.7 –7.8
Reduced bonuses 10.7 +0.6
Frozen bonus levels 3.6 –2.4
Reduced working hours/days – voluntary 3.3 –6.8
Reduced working hours/days – compulsory 1.9 –6.8
Compulsory overtime 1.1 0

 

Table 4

Better or worse? The outlook for your organisation (balance of responses, better v worse)

  Over the past 12 months Predicted for next 12 months
Sole principal –40% –22.6%
2-9 partner –14.6% –10.1%
10-49 partner +3.4% +9.0%
50+ partner –2.0% +12.7%
Large private companies  –13.1% +15.2%
Public companies  –13.2% +5.7%
Public sector –65.5% –48.2%

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