Lawyers treat one financial target as holy writ. But where did it originate?

I am in search of an answer to a mystery. Most of us are used to the ‘three times’ salary’ rule of thumb as a target to achieve.

The idea is one-third is for the fee-earner, one-third for the overheads such as premises and support staff, and the rest is profit for the partners. I have known of this rule for 30 or more years and wonder where it came from.

It seems to have entered solicitors’ folklore. People still seem to use it although it is sometimes varied depending on circumstances. You are allowed leeway depending on what sort of work you do and what overheads you have. If you do legal aid you are not expected to earn as much and if you have no secretary, ditto.

Whatever the relevance of the rule, it is a good way of negotiating fee-earners’ salary expectations. One refers to the three times’ rule as if it were holy writ and hopefully the conversation moves on. In some ways the idea that the partners receive ‘the profits’ is quite quaint when the modern reality is that partners are fee-earners like anyone else.  

The three times’ rule is referred to in an excellent article in Legal Action Group Bulletin by Vicky Ling on target-setting in a publicly funded climate.

It also refers to hourly targets, not changing the fee-earner’s target by the hour, but the number of hours one is expected to put in. Targets are in some ways irrelevant for the high street lawyer. Yes, we should all know how much a department or person costs, but fee-earners do what work comes in the door.

Perhaps the rule has run its course, but I would love to know when it started.

David Pickup is a partner at Aylesbury-based Pickup & Scott

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