Could a ‘reduced hours for reduced pay’ model work in Australia?

In an age of increased and flexible working arrangements, workers appear increasingly receptive to lower remuneration if it suits their lifestyle. Here, HR Leader’s sister brand, Lawyers Weekly, explores whether such trade-offs are being sought out by employees and the broader viability Down Under.

‘Switch on/off’

Following a successful trial in recent years, UK-based “Magic Circle” law firm Slaughter and May made permanent its Job Design Scheme for its associates.

Under the scheme – a “switch on/off” model – eligible professionals can reduce their full-time equivalent hours by 0.8 or 0.9, with pay and holiday entitlements pro-rated accordingly.

Those utilising the scheme work a normal five-day week, then take accrued non-working days in pre-agreed blocks during a 12-month period. Uptake of the firm’s other flexible working arrangements is still available to those on the “switch on/off” model.

In a statement, Slaughter and May chief people officer Jonathan Clarke said the new working arrangement “provides our lawyers with a different approach, which enables them to develop their careers and deliver value for our clients, whilst simultaneously having the time to pursue other interests and maintain a greater work/life balance”.

The newly announced permanence of the UK firm’s policy coincided with the unveiling of the findings of a survey of 1,100 Australian workers from the University of South Australia, in which nearly half (45 per cent) of workers indicated they would be willing to accept a pay cut in exchange for remote work flexibility.

The average worker who can carry out their role effectively at home, UniSA detailed, is willing to give up $3,000 to $6,000 in annual wages (4 to 8 per cent of their salary), and one in five would be willing to sacrifice $12,000 to $24,000 annually (16 to 33 per cent of salaries).

Interestingly, the study found that female workers were almost 30 per cent more likely to value remote work than men, while workers aged in their 30s and 50s were also more likely to value the ability to WFH.

New-age working arrangements, such as four-day weeks or nine-day fortnights, have started to emerge in Australian law firms, both big and small (as well as in corporate entities), but long-term movement towards extensive remote or flexible work will not be without consequences, BigLaw partners have argued.

A ‘step in the right direction’ (but with conditions)

Down Under, Naiman Clarke managing director Elvira Naiman told Lawyers Weekly, several law firms have already implemented variations of such an initiative (albeit without it being official policy). She has, for example, placed legal candidates in roles from 0.5 to 0.9 loading, with remuneration being calculated as a proportion of one’s working time.

The Slaughter and May policy, she surmised, “is a step in the right direction”.

“There are many exceptional lawyers out there who love the work and experience they get at these larger international firms, but may not like the hours that come with that life. Having a 0.8 or 0.9 loading even for an agreed period allows for some relaxation of the intensity they might experience at these firms,” she said.

G2 Legal Australian director Daniel Stirling said he thinks such policies “would be well received” in Australia, and Beacon Legal director Alex Gotch agreed: “If a policy such as this can work how it is intended, then I am sure it would be popular.”

However, he added, the challenge is that when legal work needs completing, “it is hard for a committed lawyer to knock off without getting the job done”.

Mr Stirling supported this, noting: “I have spoken to many lawyers who have reduced to three or four days a week, but often end up doing a considerable amount of work on their ‘off’ days.”

As such, Ms Naiman advised, “some very particular rules” would need to be built into such a policy for Australian legal employers.

“Where lawyers get upset is if they end up doing the same or more work for less pay because the demands of their supervising partner or client can inevitably override any negotiated work-hour concessions,” she pointed out.

The Slaughter and May policy, Mr Stirling said, sees a lawyer working full-time then taking the days off together in a block.

“This should allow for proper planning and enable the lawyer to have a clear break without being disturbed,” he said.

Inherent unfairness?

Not everyone is in favour of such a move, however.

Carlyle Kingswood Global director (legal, in-house and governance) Phillip Hunter labelled the idea of working reduced hours for reduced pay “fundamentally unfair”.

“Historically, employment contracts have compensated for additional hours within the annual salary. This new approach seems to undervalue the extra efforts of employees,” he suggested.

“Recent research advocating for a four-day working week without pay reduction has shown positive outcomes. This policy, however, seems to contradict that by effectively reducing pay for a similar reduction in hours, which can be perceived as penalising employees for seeking work/life balance.”

Moreover, Mr Hunter submitted, the introduction of such a policy by legal employers in Australia would unfairly shift the burden onto employees, “who must choose between personal time and earnings”.

“In high-pressure environments like law firms, where long hours are common, this is particularly concerning,” he mused.

“This policy is unlikely to resonate in Australia, where there’s a growing emphasis on fair employment practices and work/life balance. Australian legal professionals might view it as regressive.”

Suggestions moving forward

Instead, Mr Hunter advised, alternative approaches can and should be explored.

“Employees who work long hours should be rewarded with additional leave or benefits, not penalised financially for seeking balance,” he posited.

“Unlimited leave policies have shown that employees often take less leave; trusting and rewarding staff could be a more effective approach.”

Given the potential drawbacks he identifies, Mr Hunter theorised that London lawyers might find the Australian legal market, “with its more balanced approach to work and compensation”, more attractive.

Mr Gotch recommended that firms and other legal employers wade in, as Slaughter and May have done, rather than going all-in immediately.

“Clearly, it can work, given Slaughter and May have trialled it, but I would expect each firm would need to conduct their own trial, as what works for one firm may not work for others,” he reflected.

Ultimately, Mr Stirling concluded, suitability will depend on the individual candidate, as some require part-time work to be ongoing due to childcare or other commitments.

“But I would see it as a good alternative option to offer lawyers to increase work/life balance and reduce burnout,” he said.

This article was originally featured in Lawyers Weekly.