Friday, May 18, 2007

The Issue on Ministerial Salaries ( 2007 )

Of Champs, Chumps and Chimps
What lawyers earn has been in the news of late. The focus has been on the top eight
earners in the profession, who apparently earn substantially more than their counterparts in five other sectors. The context has been the financial sacrifices that government ministers have made in agreeing to become ministers, on the basis that if they had not done so they would have been top earners in the private sector.
The issue can be approached at three levels. First, there is principle. Second is mechanics, or structure. Third and finally, there is the impact of it all on social values.

At the level of principle is the shift from an attempt to reward contribution to government and country to an attempt to estimate what he or she would otherwise have earned in the private sector, what has been described as the opportunity cost of a public sector career choice.

The reward for contribution method, still employed in many countries today, typically ensures that a government employee and his or her family are housed, chauffered, medically attended to and in due course pensioned in accordance with a scale that fits that person’s status. It is detached from the employment market, and indeed from the housing market, as the government holds a stock of prime housing that it recycles from generation to generation.

It has the virtue of expressing society’s gratitude (coupled with a sense of what is enough to mark that gratitude), and explicitly matches status to office. Against it is the risk that society’s sense of enough may not match the ambition of talented people, and so the public sector will not attract sufficient talent.

When I was in India last year I asked the daughter of a former Supreme Court Judge
whether there was any difficulty posed by the gap that exists there between judicial salaries and private sector salaries, say those of top senior advocates. She looked at me as if I was mad, and patiently as if to a small child explained the tremendous respect in which she and her family had been held, not to mention the lovely home in which she had grown up, although of course that home was passed on to another judge once her father retired. She went on to say that as far as she knew no one turned down a higher court appointment, asthe opportunity to make and interpret law authoritatively was of incalculable reward for anyone who loved the law.

Singapore has long since moved away from a system based on valuing the contribution
made and honouring the office for itself. The focus today is on trying to determine
remuneration that, while not outpacing the private sector, does not fall too far short of top earners. The justification for it is precisely the fear that top talent will not join the public sector. That peanuts will attract only chimps. But as a method it is fraught with uncertainty. It is hard to put a value on the many differences between the two sectors – for example, the greater security and higher status of the public sector, the longer working hours and greater business stress of the private sector. Not to mention different pension rights, and the vast difference in consistency and longevity of earnings (lawyers’ earnings typically peak in their forties and early fifties and can then fall away quite sharply, and in any case fluctuate greatly from year to year). If a career in the public sector is perceived to be less risky and yet as rewarding, then the best and brightest (as the expression goes) will choose government over business, which may not after all be in the best interests of the nation.

Hard as it is to get the benchmark right in terms of career signals, it is harder still to convince people of its rightness. The market operates to reward disproportionately people who have been lucky, or have acquired the aura of a champion. Think of the huge gap in earning power between the top basketball players and the next rung – the difference in ability may be marginal at best. The same phenomenon occurs elsewhere, and certainly does in the legal profession. Yet some of the best judges in England, Australia and elsewhere have not been top earners in their previous incarnations as advocates or as solicitors, but have excelled as judges because of their combination of good minds and stout hearts.

In short, the opportunity cost method assumes or reflects an attitude that money is the common currency for all the choices one can make about one’s life. In its favour, this could be said to be just being realistic. Moreover, it assists transparency. Without comparable pay, the risk of hidden perks – ranging from the legitimate to the shady - associated with office is a real one. But it can hardly be doubted that one effect of the emphasis on money is to undercut volunteerism and the spirit of public service. It is a reductionist ethos that leaves little room for other motivations. One often hears the expression ‘national service’ to describe various unpaid posts that private sector individuals take on for a public cause, often specifically in aid of a government policy. Such work benefits us all. But, given the materialist spirit of the times, people urged to do their part by way of such ‘national service’ will be forgiven if they sometimes wonder whether they are being taken for chumps.

Unfortunately, there’s very little that the profession can do to change or even influence the terms of the debate. The public is told that top lawyers earn astronomical amounts. And that top engineers earn much, much less. What will this mean to the image and standing of the two professions? For sure, the law faculties at NUS and SMU will be even more oversubscribed than they are at present. And the engineering faculties will see a sharp drop off of applicants. It is unfortunate that the public may be getting a rather skewed idea of the two professions – there is much less of a gap once one looks below the rung of top earners.

Expect clients too to wonder how to square lawyers’ complaints about the very real squeeze on legal fees with the apparent exuberance of top lawyers’ pay. Will they understand that the headline numbers don’t tell the whole story?

Perhaps the only way to redress what is probably a misleading glimpse of what it really means to be a lawyer (or doctor or accountant or engineer) would be for IRAS now to release figures showing what the average income levels are at different stages of a legal,medical, accounting and engineering career, including how they fluctuate, plateau and taper off.

But there seems no way to redress the underlying shift in how we count our time on earth – a shift from values of service and significance to emphasis on success measured in dollars and cents. But it is a terrible shame all the same. And whether the cause is hopeless or not,we should not succumb just yet. The profession still has plenty of room for socially aware,dedicated lawyers to make a mark, and earn a decent living in the process, as well as for the few financial champs. So long as one has enough to keep self and family in food, shelter,health and education, giving up billable hours for professional or social service is still a worthwhile endeavour.

Philip Jeyaretnam, SC
The Law Society of Singapore


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