Diary of a busy practitioner, juggling work and family somewhere in England

In the latest of my 'things they don’t teach you at law college' articles, I want to talk about fees.

Being a solicitor can be confusing. It is a profession, and lots of professional people - teachers and doctors, for example - aren’t business people. Whilst the public have been aware of the cost of instructing lawyers since Jarndyce v. Jarndyce, lawyers themselves have been slower to act as savvy business people. You may have become a lawyer for lots of more worthy reasons, but it is my - hopefully uncontroversial - opinion that your number one priority in private practice is to be profitable.


Not only do they not teach you about being a profitable fee-earner at college, there is a reluctance to ever talk about it in any detail because it is - or should be, in my opinion - linked to salary and we should never, ever talk about our salaries. Or profit.

I am going to talk about salaries. If an anonymous blogger can’t do it, then who can.

Actually, on reflection I can’t bring myself to just say it. Funny, isn’t it? I will say that when I was a trainee, 5 prime ministers ago, I was on just over the Law Society minimum. It doubled when I qualified. It has now more than doubled again (or rather the FTE has.) You can probably work it out from that without me having to feel I’m being terribly uncouth.

There are lots of factors to be taken into account by your firm when it gives you a fees target and the factors should be taken into account consistently between fee earners. It should be a calculation of your hourly rate multiplied by the hours they expect you to record a day then multiplied by a recovery rate. The hours target should take into account non-fee earning responsibilities and the recovery rate should take into account fixed-fee work.

However, as we know, calculations like these are easily manipulable and I prefer the old theory - that you should be earning three or more times your salary. The first third is your salary, the second third is your administrative costs and the third third is profit. As ever, I’m talking about high street law and this might not apply to you.

Let us talk about the second third.

What are your admin costs? This will include all support staff - not just your direct support staff but the receptionist, the marketing assistant, the cleaner. It includes the computers, software, the rent on the building, advertising, rates, training, professional subscriptions and, very importantly because of the amount of the premiums, professional indemnity insurance. I am not an equity partner nor do I have an overall picture of my firm’s running costs but if everyone is billing three times their salary and the partners have the other two-thirds for admin and profit, I believe this should work. If there is no profit but you are doing your bit, it either means the others aren’t doing their bit or the admin costs are out of hand.

At a previous firm, the most senior staff (read: high salaries) were a management team who didn’t fee-earn. They also joined up to a well-known high street branding that seemed to lead to a lot of additional costs. None of that should have been my problem as a young lawyer, but it was to become my problem if I was doing some good fee-earning and they weren’t going to pay me what I deserved.

There are times when you might not be able to meet your fees target - you might have been brought in to build up your own caseload, you might be newly qualified and feeling your feet, or you might have, I don’t know, been caught up in the various side effects of a pandemic. Your appraisal should be a genuine opportunity to discuss how you can improve your fees and your firm should be supportive. I intend to write a blog with some tips for billing well; it is a skill in itself and one I think trainees should start learning about on the first day of their training contract. I should also add that if you have no direct support staff I really think there is a ceiling on the fees you can generate and you may still, in such a case, be profitable without billing three times your salary.

In summary, earning fees is as important-  if not more so - than anything else you do at work. You must not forget you are in business to make money. And to ask for a pay rise you need to be earning the fees. If you are earning three times your salary in a traditional firm, you are doing all right. If you are earning four times, you may be justified in asking for a pay rise. If you are billing more than that you should be looking for a better firm to work at. If you aren’t earning anything like three times, it doesn’t matter if you are a really nice person or your files are really neat or you were really helpful when you did that marketing thing, you aren’t ready to ask for a pay rise.


*Some facts and identities have been altered in the above article