Biglaw, Labor / Employment, Money

Imagine There’s No Billables

Ford Harrison LLP no billable hours Above the Law blog.jpgIt’s easy if you try.
No billable minimum below us.
Above us only sky (high bonuses).
The billable hour has its critics. See, e.g., this great piece by Scott Turow. Alternatives to the billable hour are slowly emerging. But nobody seems to think it’s going away anytime soon.
If you’re a first-year associate at Ford & Harrison, however, the billable hour is already history for you. From the National Law Journal (via WSJ Law Blog):

Ford & Harrison, a 190-attorney labor and employment firm, has tossed out billable-hour requirements for first-year associates. The program aims to close the practical-skills gap of law school education and increase value to clients. The firm also hopes it will enable associates to handle meatier matters more quickly.

Overall, Ford & Harrison’s leaders expect the new program to help retain beginning lawyers and appease clients.

“Everyone sits around and complains about the problems,” said C. Lash Harrison, managing partner of the law firm. “I figured, what the heck, maybe we can try something.”

More after the jump.

Umm, so how is this going to work exactly? Are first-years at Ford & Harrison, who earn $125,000 in the firm’s largest offices, being paid six-figures to goof off?

The idea is for associates to spend their time observing depositions and witness interviews and attending hearings and litigation strategy meetings. While the firm has no specific expectations of associates meeting the 1,900 billable hours it previously required from new attorneys, it does anticipate that some of the work they undertake during their first 15 or so months will be valuable enough to bill.

Interesting — and maybe not as insane or as radical as it might seem at first. If (1) more clients are refusing to have first-years staffed on their matters (because they’re not worth their rates) and (2) a lot of first-year time has to be written off anyway, why not go whole hog and ditch billables for first years?
Of course, query whether this can work for places with first-year classes of 100 associates or more:

[W]hether Ford & Harrison’s program can transfer to larger law firms is unclear.

“It’s an interesting approach, and perhaps we’ll all learn something from it,” said Frank Burch, joint chief executive officer of 3,333-attorney DLA Piper. “That said, smaller firms can do things informally that larger firms approach more systematically.”

In addition, there’s also the fact that Ford & Harrison is a labor and employment firm. Labor and employment tends to be a less lucrative or less high-margin practice area, and clients tend to be more cost-conscious. It may therefore make sense for a labor firm to take an approach like this one, even if it wouldn’t be smart for a firm that can get away with charging clients a lot for the work of first-year associates.
So, any thoughts? Is this genius, or lunacy, or a little bit of both?
Firm Kills Billable Hour for First-Year Associates [National Law Journal]
A Year Without Time Sheets [WSJ Law Blog]
Ford & Harrison [official website]

(hidden for your protection)

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