Exclusive: Reed Smith increases chargeable targets by 200 hours p.a.

Reed Smith's London office has found an ingenious way to increase its profits: by ramping up chargeable targets while freezing pay. Genius!

Associates are currently expected to bill 1,500 hours per year. However they have just been told that this will increase to 1,600 in 2017 and to 1,700 in 2018. Taking into account time off for holidays, that means about four and a half more billable hours a week, or an extra hour a day in the office once you take into account basic lavatorial and nutrional needs.

While the increase for Reed Smith's lawyers is substantial, 1,700 hours isn't unusual at City firms. It's required of associates at Linklaters and Hogan Lovells for example, and A&O associates are expected to put in 1,750 hours. The difference is that while a 2PQE associate at A&O makes £104,500 p.a., the equivalent salary at Reed Smith is just £70,250. And other firms in the same sort of pay bracket as Reed Smith, such as Addleshaws, Nabarro and Pinsent Masons, all have 1,500 hour targets.

Reed Smith's London office yesterday

An insider told RollOnFriday that the hike in hours is not being accompanied by any increase in pay, and that associates will not be promoted if they fail to meet their targets. He adds that "associate morale is at an all time low".

A spokeswoman for the firm said "this move reflects the growth of our business over recent years and our ambition for the future. It will bring the firm into line with the market, where many other firms moved to these targets some time ago."

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Comments

I remember, in 1997, Freshfields raised its target hours to 1,500, which made it the highest in the City. There was lots of hand wringing over whether 1,500 was too high for anyone to be able to achieve. Funny how perspectives shift and what used to be considered the epitome of slave-driving (1,500) has now come to considered relatively light.

Since there is no associate lock-step, it is generally hard to say what a 2pqe assoc is paid, but it is certainly not £70k. Most are on c.£66k (i.e. a semi-decent nq wage)

Firms never learn. You can't beast associates to a level that other firms do unless you are paying what other firms do. If people want an easy life and little pay they will work in a ten partner firm in some town. If they want major moolah then they will be willing to accept a massive target. Firms can't have it both ways. Provincial brances of national firms have seen it with people moving to London as they have to work no harder and are paid 40% more.

Pfffft, no problem
"Rang client. Phone not answered. Left message. 12 units"
Sorted.

Analysing the spokewoman's comment:
"this move reflects the growth of our business over recent years" - we haven't had any.
"and our ambition for the future." - we don't want to go bust.

Why do law firms continue to use billable hours as the basis for their business? Is that really the only measure of value?

"And other firms in the same sort of pay bracket as Reed Smith, such as Addleshaws, Nabarro and Pinsent Masons, all have 1,500 hour targets"

I suggest your research team does more research if you think this is correct

Addleshaws is 1650.

The Gazette reported today that PEP is down 8% at Reed Smith. Could the two be related??