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Working from home: Who benefits most?

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Law firm Stephenson Harwood is offering its staff full-time homeworking in exchange for a 20% pay cut. Is this practical and will accountants follow suit?

5th May 2022
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Mid-tier legal practice Stephenson Harwood hit the headlines this week with a blockbuster announcement that all employees below partner level will be given the opportunity to work from home on a permanent basis. As ever, when an offer sounds like it is too good to be true, it is. In this particular case, employees will pay for the pleasure of a lie-in by taking a 20% pay cut.

It will be interesting to see exactly how the numbers are calculated, given that both parties will save national insurance contributions (NICs), while employees will actually lose considerably less than 20% after tax is taken into account. According to press coverage, the typical newly qualified lawyer is on £90,000 a year (sharp intake of breath) and will therefore be a 40% taxpayer.

This intriguing proposition is likely to spread like wildfire, not only in the legal profession but also others, almost certainly including our own.

Publicity stunt

Whether it will catch on or not is another matter. Indeed, the cynical may wonder whether this wasn’t merely the best publicity stunt by any professional practice in living memory.

When accountants want to get on to the front page of the papers, they usually have to get fined millions of pounds for poor performance. Stephenson Harwood (SH) hit the headlines by getting ahead of the market with a gimmick that is likely to be impractical.

Since SH is run by and employs innumerable solicitors, one imagines that they have looked at the legal implications, since there has to be a strong prospect that the majority of those taking up the offer will be female. That is not intended as a sexist comment but merely a reflection of 21st-century life.

If that is the case, the firm’s gender pay gap will inevitably grow, while some of those canny solicitors who choose to work from home may consider taking legal action against the legal practice on the basis that the policy is discriminatory.

Control freaks

Let’s look at some of the implications more closely. There has been an ongoing debate in the accountancy profession and far beyond regarding the efficiency of homeworking.

At one end of the scale, come the control freaks led by Jacob Rees Mogg, who despite the fact that more than one in 15 of the population was suffering from coronavirus at the time, issued sarcastic demands to civil service employees, trying to bully them into returning to their desks.

One wonders whether this is the only Brexit opportunity that the Minister for Brexit Opportunities has currently managed to identify, given that he has been uncharacteristically silent since taking on the ministerial portfolio?

Many of us will have worked with accountants whose attitudes are similar, assuming that any junior colleague out of their field of vision is slacking.

At the other end of the scale, there have been numerous stories about stress suffered by homeworkers, who are unable to tear themselves away from the laptop or mobile, working far longer hours than they ever did in the office.

It might seem strange that a legal practice should put forward this idea, given that so many of their professional staff will constantly be client-facing. Are they really going to change the nature of transactional business to allow underpaid colleagues to attend lengthy contractual negotiations via Zoom in the long term?

Unless that is the case, perhaps this is merely a strategy designed to cut support costs, since secretarial staff would be those most likely to take up the offer without damaging business.

Given the unproven theory that staff work harder from home than if they are travelling to and operating in a noisy office environment, surely the logic should be that they must get paid more rather than less. Let’s leave the powers that be at Stephenson Harwood to defend that one.

Too good to miss

In addition, if significant numbers of staff decide that this offer is too good to miss, beyond saving NICs the firm will be able to cut its establishment cost considerably at a time when city-centre property prices remain material and power costs are becoming extortionate. Additionally, they will save cash flow on season-ticket loans and, to the extent that they still exist, the cost of company cars.

Looked at from the other end of the transaction, some employees will undoubtedly love the opportunity to work from home full-time. Anyone wishing to live in the country far from their normal workplace or even overseas might be able to save enough to justify the pay cut. Even so, such workers must surely be few and far between.

The next step is likely to be a bandwagon jump by hordes of other legal practices not to mention other office-based businesses.

It is in the nature of free markets that the followers will undercut the first ones in. Therefore, expect to see others offering the chance to work from home full-time for a mere 10% pay cut, before 5% becomes de rigueur and then a really enlightened business goes for parity, on the basis that their own savings fully compensate for any perceived loss.

Having seen what Stephenson Harwood achieved by making this announcement to the media, one wonders which accountants will be the first to follow?

Replies (18)

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By Mad as a March Hare
09th May 2022 10:48

Who benefits most? That's obvious, the family dog or cat that is no longer left alone for hours on end.

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By bobsto12
10th May 2022 09:40

I do contract work and most roles now require you to be in an office 2-3 days a weeks and I suspect this is because companies are experiencing productivity difficulties with 100% homeworking. The best employees will work hard and are effective wherever they are located but a lot of people probably need the discipline of being in an office to bring out the best in them.

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By meadowsaw227
10th May 2022 09:44

Home working helped during the lockdown but for me it doesn't work long term.
It is the minutiae that falls by the wayside, all the little jobs I now have do that if staff were available I could pass on.

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By meadowsaw227
10th May 2022 09:44

Home working helped during the lockdown but for me it doesn't work long term.
It is the minutiae that falls by the wayside, all the little jobs I now have do that if staff were available I could pass on.

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By johnjenkins
10th May 2022 09:45

If you started off working from home and then built your business and have an office, I doubt very much that you would want to go back working from home. So Accountants won't follow suit. Doing an Audit from home is impractical.

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By Stu8
10th May 2022 10:15

If employees work from home a firm should be able to reduce costs of their premises. Typical of a Law firm to want both ends of a deal!

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Replying to Stu8:
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By DavidWinter
10th May 2022 13:55

My thoughts exactly, and 20%!

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By Silver Birch Accts
10th May 2022 10:25

A reduction in gross remmuneration will impact mortgage applications.

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By JamesDS
10th May 2022 10:27

Honestly, I have nothing but contempt for businesses that effectively attempt to profiteer off people wanting to avoid a grinding commute, or move out to the sticks, or just want to achieve a better work/life balance.

The market will decide, but I predict that they will rescind the cut within 12 months. They will fail to properly manage the differences between full time WFH, the manager that demands all his team in occasionally for the inevitable look-at-my-empire meeting, and the person that wants to come in once every couple of weeks, but declines the pay cut as they aren't full time WFH.

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By dmmarler
10th May 2022 10:32

And what about client confidentiality and data security? In the rush to home working during lock down these tended to be put on the back burner just to get things done. I wonder how much real consideration has gone into this aspect of the proposed change in working practices.

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Replying to dmmarler:
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By JamesDS
11th May 2022 15:44

dmmarler wrote:

And what about client confidentiality and data security? In the rush to home working during lock down these tended to be put on the back burner just to get things done....[snip]

No they weren't. A colleague worked for NHS Digital during lockdown. All non-clinical staff went home for nearly 2 years and nothing relating to patient confidentiality was compromised. At. All.

The private sector has been running access-anywhere secure systems for more than a decade. The failure here is lack of investment in appropriate technology - which is largely down to inter-departmental empire-politics and wilful failure to adopt the recommendations of the government digital service.

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By mgunn
10th May 2022 11:06

The comment about Jacob Rees Mogg is wholly unjustified. I received a reply to a letter I sent to Companies House 9 months later in which they said that due to working from home, long delays in replies to letters through the post must be expected. The same applies to HMRC, the passport office, DVLA and many othe Govt Depts. This cannot go on. Yet the Govt is being blamed for not sorting it out whilst people equally criticise them as in this article.

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Replying to mgunn:
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By Ozzi
11th May 2022 08:48

Unless HMRC have been allowing staff to work from home for the last 10 years, they can't use this excuse.

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Replying to mgunn:
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By JamesDS
11th May 2022 15:47

Not sure anything negative said about Jacob Reese-Mogg can be described as unjustified. For some reason, he does seem to repeatedly do and say grotesquely inappropriate and often deeply offensive things.

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By mgunn
10th May 2022 11:06

The comment about Jacob Rees Mogg is wholly unjustified. I received a reply to a letter I sent to Companies House 9 months later in which they said that due to working from home, long delays in replies to letters through the post must be expected. The same applies to HMRC, the passport office, DVLA and many othe Govt Depts. This cannot go on. Yet the Govt is being blamed for not sorting it out whilst people equally criticise them as in this article.

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By Mr J Andrews
10th May 2022 16:21

Will they be pulling their own crackers at the Xmas Party, I wonder

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Replying to Mr J Andrews:
paddle steamer
By DJKL
11th May 2022 10:03

They have interns to do it for them.

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By Mad as a March Hare
11th May 2022 11:40

Lawyers wanting to reduce salaries by 20% for home workers really haven't thought this through. Maybe the employees can sue the law firm for the cost of lighting and heating their home office. Charge them rent for using a room in their home.
Then of course there's the environmental impact, zero pollution by cutting out commuting, so I guess all environmentally conscious clients will take their business elsewhere.
I thought lawyers were supposed to be intelligent, obviously not this lot.

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