Can Money Buy Happiness? Not At City Law Firms.

There’s good news and bad news for City lawyers.

The good news: salaries at big law firms have increased sharply recently, due to a surge in demand for lawyers. A newly qualified solicitor at Milbank’s London office can expect to get paid $215,000 as of January 2022 – that’s about £160,000. Milbank is a US-headquartered firm, and US firms take the lead with salaries at London law firms. Nevertheless, UK firms have also shown some impressive salary increases, with most reputable firms offering over £160,000 for NQ level. Earning £100k as soon as three years after graduating…sounds like a good deal, right?

Well, the reality is a little more nuanced, and that’s where we have the bad news. A record number of lawyers are leaving the legal profession: in 2021, 50% more associates left their law firms than in the previous year. Working hours are increasing, with the latest ‘average finish time’ of a junior lawyer lying at 11.28pm in 2021 up from 9.46pm in 2020. Burnout rates and mental health issues in the legal profession seem to be increasing as well, with 70% of lawyers surveyed by LawCare in September 2021 reporting mental ill-health. Big law firms, evidently, are under pressure.

The Million Dollar Question: Why Are Lawyers Leaving The Legal Profession And Their £100k+ Salaries Behind?

Let’s start with a recent headline. Joanna Torode worked at a reputable US law firm in London. She is now suing the firm for causing her career to end prematurely, alleging that the “intolerable workload” and “chaotic, stressful and pressurised” work environment caused a deterioration in her mental health which left her unable to work. The law firm denies these allegations. 

She is not the only one, however. Other ex-City lawyers speak of “chronic insomnia” and “panic attacks” caused by their job. A lack of sleep appears to be the norm to manage high workloads, and the high pressure environment may lead to anxiety and other mental health issues. In the worst case – which certainly does not happen to all lawyers, but seems to be more common in the legal industry – is a complete mental breakdown or burnout, as in Torode’s case. Many lawyers who leave the legal profession have experienced a certain degree of this pressure on mental health.

Hello Law, Goodbye Happiness: What Are The Causes Of This Mental Health Deterioration, And Are They Unique To Law Firms?

BILLABLE HOURS:

The billing system is one that is frequently mentioned in this context. At most law firms, lawyers are expected to bill a certain number of hours. This number has been steadily increasing, with law firms eager to bill more revenue. Associates may now be expected to bill about 2000 hours a year at top law firms, averaging over 35 hours a week – which does not include time spent on administrative tasks, training, or even breaks, meaning that significantly longer hours are being worked. Naturally, lawyers are being taken to their limits, and many will go above and beyond to meet their targets or exceed them.

HIGH-STAKE WORK AND CLIENT DEMANDS:

There is also the nature of the profession itself: important transactions and high client demands. When law firms are working on transactions, or disputes, that could either make or cost the client thousands, or millions, it is evident that a lot is expected of the lawyers who offer their services. Clients are working on tight timelines and require that work is completed to an excellent standard throughout, which leads to out of hours requests and the like. Recent growth in the market, for example through the M&A boom during the pandemic, further exacerbates this environment. 

WORKING FROM HOME:

In fact, the pandemic is likely to have worsened working conditions overall. Working from home offers additional flexibility, but can mean that lawyers feel isolated and without support. Many lawyers are likely to take less breaks at home, and start working for hours and hours in the same confined space, both of which are conducive to mental health issues if there is no balance in the long-term.

WORKING CULTURE:

All that being said, at many firms there is a culture of working hard – perhaps too hard. This reflects an expectation of perfectionism in the legal industry, specifically at City law firms. This may be the overarching reason that lawyers are struggling with mental health: they are pushed to their limits in terms of bulky workloads and a high-pressure working environment, yet perfection is demanded at every stage. 

A Better Way than Just £100k: What Can Law Firms Do To Make A Difference And Retain Talent?

Given the importance of mental health being integrated into a firm’s culture, some law firms have started introducing mental health and well-being programmes. Ashurst, Baker McKenzie, Allen & Overy and Clifford Chance all currently have such programmes. There is no guarantee that these programmes will provide immediate change, but there is a hope that with an increased awareness of the issue, it will seep into the firm’s culture in the long term. 

There are many other practical ways that lawyers’ happiness can be improved. A better allocation of resources – with more associates working on the same transaction – could help with workloads, although this could mean that the current pay rates are unsustainable. Investing in technology to automate routine processes can allow lawyers to spend less time on these tasks and use their time to add value, which could reduce hours worked overall. Allowing lawyers to have time off without any expectation of being available, for example, after an important deal or court proceeding, could provide more balance. Encouraging flexible working is another effective solution, but firms must check in with their employees when they are not in the office. Overall, it is key that law firms consider their lawyers’ mental health and which practical solutions will improve it. 

Cheers To Good Salaries And Even Better Mental Health: What’s Next For Law Firms?

In 2022, the legal sector is at a turning point. 

Firms have the opportunity to stand out from competitors and retain talent by changing the legal culture and implementing practical solutions to improve lawyers’ mental health – real solutions that go beyond salary increases or retention bonuses.

One might think that as there are lawyers who will work excessive hours to receive equally excessive pay, there is no need for change. Yet the number of lawyers leaving the profession shows that these high salaries can’t buy lawyers’ happiness and that something more needs to be done. A greater awareness of mental health at law firms might be the key to this happiness.