Limitless annual leave in law firms: Utopian dream or workable policy?

Limitless annual leave in law firms: Utopian dream or workable policy?

Does the idea of limitless annual leave fit into the culture of law firms?

The traditional annual leave model of a fixed number of days per year (carried over if the employer is of the generous ilk) has taken a knock of late, with large corporates and law firms alike introducing a more modern, flexible approach. Virgin’s Richard Branson, for instance, gives his 170 direct personal employees unlimited annual leave if they believe they are up to date with their work (pity the remaining 50,000 plus Virgin employees), with other big names including LinkedIn, Netflix and Groupon introducing such policies.

Similarly, Mishcon de Reya allows its employees to take annual leave when they so choose, provided it doesn’t impede on client work. In February 2016, Hogan Lovells also introduced unlimited annual leave entitlement to its US employees – with the firm’s UK counterparts enjoying no such perk for the foreseeable future.

While UK law firms are slow to introduce a level of flexibility into their annual leave policies (US firms are ahead of the game), another firm has recently entered the ring. At the end of 2015, Ashtons Legal (Ashtons KCJ as it was then) introduced a policy following a successful trial period. Edward O’Rourke, the firm’s CEO, says such policies can and are working in law firms. He says the firm is very clear about what the policy’s aim is, and is not, about: ‘It is not to allow people to start taking four to six weeks off at a time. The aim is just not to unreasonably restrict the absences over the period of a whole year based on some arbitrary number of days allocated.’

So what types of policy exist, and how are they working in practice? David Stevenson, chief executive at George Green solicitors, says the arrangements being put in place by some businesses whereby (in loose terms) employees can take as much holiday as they want, whenever they want ‘is being suggested as a corollary to an expectation now that businesses expect people to be constantly connected to the workplace by email and smart phone’. He adds: ‘There is a view that it supports a move towards what is regarded as a healthier culture of focusing on what employees do as opposed to how many hours they have worked.’

O’Rourke notes that Netflix has operated a paid time off (PTO) policy for at least five years, ‘their ideology being that they should focus on what people get done, not how many hours or days are worked’. He says there is a plethora of policies that seem to be appearing from those, such as Ashtons’, which offer the leave on a paid basis, others which allow it unpaid, while others allow for staff to buy and sell holiday days. Interestingly, he says: ‘Although we researched the Netflix, Virgin and other policies, there did not appear to be any common guiding principles. Instead we drafted our own policy to suit our business.’

As to why, O’Rourke explains that there are numerous reasons, including the fact that we are no longer a 9–5 society: ‘Measuring productivity is not simply a measure of how long someone is present.’ He adds: ‘It allows us to treat our staff like adults and allow them to determine what works best for them. It is my perception that more traditional models set rigid rules to cater to the lowest common denominator penalising the vast majority in order to curtail the less desirable behaviours of a very small minority.’

Another benefit O’Rourke cites is that ‘it allows for a more accurate measurement of genuine sick days’. In addition, he adds: ‘We like to encourage the development of our staff–historically, in order to study for any exams, if they wanted more time than we allowed for study days they had to take this out of their annual holiday allowance. And although this is not a flexible working policy, it does allow more flexibility.’

‘Also, we no longer have the mad dash for time off at the year-end which left an office under-staffed (there is no longer a “use it or lose it” culture). In addition, our previous bereavement arrangements allowed for a set number of days. This policy took no account of the individual’s reaction to a loss. Some like to come straight back to work to be surrounded by colleagues and to keep their mind occupied while others prefer to be left alone and to have quite time to overcome their grief. We can now easily accommodate both approaches.’

As for the practicalities and workability of such policies, Stevenson, is distinctly cynical. He says: ‘The devil is, of course, in the detail… aka: When is unlimited holiday not unlimited holiday? The caveats appear to be that to avail themselves of this opportunity, the employees concerned would first need to be satisfied that they were fully up-to-date with all their current projects and were mindful of how decisions taken in this context may affect their career progress.’

However, he says it’s difficult to answer the question as to how these policies work as the case studies are so far thin on the ground: ‘The cynic in me,’ he adds, ‘would say that to date this isn’t really much more than the stuff of sound bites. Netflix claims to operate the policy and one can only assume that it is able to do so because, somehow, it has managed to create some kind of Utopia where everyone collaborates perfectly and is output focused as otherwise it is hard to see how it does work without deadlines being missed and clients being unhappy.’

Moreover, Stevenson (speaking with 30 years in the industry) doubts whether lawyers can ever be in a position where they are completely up-to-date with all their ongoing work. He asks: ‘Could you really see lawyers, by the nature of the beast, normally ambitious, risk averse and competitive, taking extra time off as and when, if they thought that the time off or the inconvenience caused would affect how they were viewed in terms of potential for advancement? Of course not! On the surface, unlimited holiday policies are a recipe for missed deadlines and unhappy clients – and aren’t deadlines and client care at the heart of what lawyers do?’

Apart from the benefits O’Rourke explains above, he adds that although admittedly harder to measure,’ a flexible annual leave policy includes a greater level of employee engagement and increased productivity. And he reports that the firm’s fees are significantly up on the previous year.

However, he does concede that there are distinct, and numerous challenges, largely around cultural change. He explains: ‘People can be nervous of change and sceptical as to why it is being implemented. Others are less comfortable when boundaries are not set out for them. I did have some staff actually say: “I know you say we can take as many days as we like, but how many days is that?”

The other challenge is ensuring the policy is understood. We did have one member of staff think this meant she could take six weeks off in the summer to go and sit on a beach. The need to have consideration to your colleagues and workloads mean that this would be unlikely save in exceptional circumstances. The biggest three issues are communication, communication and communication.’

Stevenson predicts: ‘You would need a culture of trust and collaboration to be operating at a high level and right across the organisation, and that could take some doing as it would not take too many unaligned individuals (and there would always be some) to derail it. In environments where people feel under pressure to work long hours, there are enough issues with getting certain employees even to take the 25-day holiday entitlement they are given–so query how that would work if it was wholly up to them (albeit maybe that would be fixed with a compulsory minimum).’

Furthermore, he envisages: ‘A lot of people would flit in and out of work and never have a proper break. At least in law firms now where people go away at agreed times and for agreed periods, one can plan around this to get work covered and allow people to fully disengage to recharge their batteries.’

Another challenge, he says, would be the logistical, administration and management issues: ‘Surely a nightmare, although no doubt some well-meaning IT provider would say he had a software solution that would assist!’

So are flexible annual leave policies in law firms a Utopian dream or an entirely workable policy with distinct benefits that outweigh the challenges? Only time will tell.

Interviewed by Nicola Laver.

The views expressed by our Legal Analysis interviewees are not necessarily those of the proprietor.

First published on Lexis®PSL.

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