The Gazette 1984

GAZETTE

SEP T EM BER 1984

Chargeable Hours

Thefollowing article is by Mr. Eric Hiley, Solicitor, Senior Assistant Secretary, Contentious Business Department, The Law Society (of England and Wales). It first appeared in The Law Society's Gazette of 18th April 1984 and it is reproduced with the permission of the editor. C HARGEABLE hours are defined as the hours a solicitor or a fee earner in a solicitor's practice works during the course of a normal working week in respect of which it is reasonable and practicable to render a bill to a client. The question of how many chargeable hours one normally works is not an academic one. Those who operate time recording systems will know from experience that a great deal of a normal working week is spent on non-chargeable time. This may be time spent on office administration, further education, sickness, or undertaking the many other tasks within the office for which a bill cannot be rendered to a client. It is normally accepted that allowing for statutory holidays and a certain amount of other time away from the office, there are about 220 working days in a year. A seven-hour working day produces a possible 1,540 hours in a year. A 7% hour day will produce 1,650 hours. How much of that time is normally spent on work for which a bill can be rendered to a client? The reason why this question is important is that in order to calculate an accurate hourly expense rate one needs to divide the annual expense of a particular fee earner by his annual chargeable hours. The information is also essential to achieve proper billing forecasts in a budget. An important reason why the Special Committee of the Council of the Law Society on Remuneration wishes to obtain evidence of chargeable hours is because it plays a substantial part in the apportionment of expense to hourly criminal legal aid rates. Those familiar with the subject will know that in the case of R -v- Wilkinson [1980] 1 All ER 597, the Remuneration Committee produced evidence from Centre-File Ltd. to the effect that on the basis of records kept for 125 firms the average annual chargeable hours recorded by full-time fee earners (including partners) was 1,005 and for partners alone 970. These figures included recorded overtime. In the same case the Remuneration Committee also produced the evidence of the Law Society's 1976 Remuneration Survey which showed that the average chargeable hours of the very large firms which kept time records by computer were for partners between 985 and 1,080, for assistant solicitors and legal advisers between 1,044 and 1,100 and for articled clerks between 783 and 930. A survey carried out by the Holborn Law Society in 1980 showed average chargeable hours for senior partners of 947, junior partners 1,229, senior assistant solicitors 1,064, junior assistant solicitors 1,085, legal executives 1,081 and articled clerks 740. This evidence has been considered unreliable by the Lord Chancellor's Department because it is said to be based on too small a sample. The Remuneration Committee therefore commissioned a further survey in the second half of 1983 in order to provide additional evidence.

Messrs. Peat, Marwick, Mitchell & Co. were consulted and it was decided to direct the survey to those firms which were known to maintain computerised time recording systems. 131 completed questionnaires were returned and these gave information concerning the chargeable hours of 3,345 fee earners. The following table sets out the results of the survey in the case of full-time fee earners and again the figures included recorded overtime.

Other non-

Convey- conten-

Litigation

Civil 1,106 1,179

ancing

tious 1,051 1,188

Grade

Criminal

•All

1,219 1,218

Senior Partner Junior Partner Senior Assistant Solicitor Junior Assistant Solicitor Articled Clerk Legal Executive Junior Clerk Average of all Fee earners

993

1,046 1,142

1,042

985

1,060

1,146

1,075

1,055

943 599 980 672

995 795 883 664

1,060

1,025

1,006

667 989 751

717

674 959 699

1,078

845

969

1,004

1,054

997

1,110

The following table gives the number of fee earners in each category.

Other non-

Convey- conten-

Litigation

Civil

Grade

ancing

tious

Criminal

•All 977 429

Senior Partner Junior Partner Senior Assistant Solicitor Junior Assistant Solicitor Articled Clerk Legal Executive Junior Clerk Average of all Fee earners

367 126

258 118

182 124

23

16

108

124

155

15

432

108

157

118

8 4

449 278 655

47

20

32

204

209

198

13

38

34

39

1

125

901 3,345 •The 'All Classes' figures include 499 fee earners who could not be categorised because their work was too mixed. The results of this survey are a valuable addition to the information which had already been obtained and the survey does appear to confirm the figures obtained by other surveys. The Law Society has for many years asserted that the average number of chargeable hours which a fee earner can reasonably be expected to record is in the region of 1,000, although it is recognised that there will be variations around this figure which are related either to the type of work undertaken or the type of fee earner undertaking the work. Such variations can be seen in the tables printed above. It is well known that the Lord Chancellor's Department has used the assumption of 1,300 chargeable hours in respect of criminal legal aid work. The present survey may not go very far to change this supposition inasmuch as the number of fee earners involved in criminal litigation in the survey was not considerable. In spite of this, however, the survey throws considerable doubt on the figure of 1,300 !223 1,009 856 80