Bingham’s Billing Battle
(Plus offer rate and real estate news.)
Are billing disputes between law firms and their clients on the rise in the recession? We feel like we’ve seen a lot of them lately.
The most recent disagreement involves Bingham McCutchen. A Boston-area investment company, Tuckerbrook Alternative Investments, has sued Bingham, claiming it was overcharged for legal services provided in connection with preparing an SEC registration statement.
The case isn’t that exciting — it seems like a garden-variety fee dispute — but this aspect struck us as interesting. From Massachusetts Lawyers Weekly (subscription):
The Sept. 16 complaint accuses Bingham of stacking the case with young associates who had “inadequate” experience. “The billing statements reflect that these junior lawyers in essence were enjoying the benefits of on-the-job-training at Tuckerbrook’s expense,” the complaint states.
So the allegation is that young lawyers were being trained on the client’s dime. But is that an indictment of Bingham McCutchen, or of the billable hour?
Grumpy in-house lawyers regularly complain about paying for the training of Biglaw’s junior associates. This is why some corporate counsel explicitly refuse to pay for first- and second-year associates (and provide for that in their retainer agreements; presumably Tuckerbrook could have done that here).
More news about Bingham, including its summer associate offer rate and its real estate needs in New York, after the jump.
On the summer associate offer rate front, the situation at Bingham is still playing out (because of some up-in-the-air factors like clerkship offers). According to a firm spokesperson, however, Bingham expects to have a firm-wide offer rate between 60 and 70 percent by the time the process is done.
An offer rate in that range is not fabulous, but it’s perfectly respectable (by 2009 standards). We won’t name names — you can look them up in the “no offer” archives — but a number of firms in Bingham’s neighborhood in the Vault rankings (#51-#60) have had much lower offer rates.
Finally, to end on a happy note, Bingham’s New York office is growing (thanks in part to its acquisition of McKee Nelson). The firm is on the prowl for over 200,000 square feet of office space. Given plummeting office rents in Manhattan, it’s a good time to be looking!
Client sues Bingham over $370K bill [Massachusetts Lawyers Weekly (subscription)]
Law Firm Bingham McCutchen Looking for 200K Feet [New York Observer]
(52) Comments
Comments
When I go to the doctor at a teaching hospital, I am paying for the younger doctor to be trained by the more experienced one. Don't we want this?
Blurst!.
Damnit.
Bingham McCutchen should have expected nothing less from this non-preeminent, non-peer law firm.
Incidentally, I have an outstanding offer at my father's preeminent peer law firm.
1--That's what clinic is
2 = sound of a Bingham associate sharting.
The billable hour is not to blame for firms training associates at client's expense. At least under the billable system, the client sees who's working on the case and the rate that they charge. Under a flat-fee system a firm can build associate time into the price quote with less transparency with clients.
@1 You've got it right. I speak from experience: As a 3L with no job, I desperately want to get some on the job training.
@3 Your schtick is not funny.
@4 You cannot do surgery in the clinic. Teaching hospitals don't only teach primary care, you know.
Here's a protip for Tuckerbrook: ALL work is on-the-job training, even if only elite partners are working on your deal.
3 - i've noticed people seem to either really appreciate your irony or hate you. just letting you that you have one more fan here. Cheers.
The client is overrated.
-Latham Secure
I remember when my Partner (hehe) first started as a junior partner. All he would tell me was "at our firm, and other preeminent peer firms, billing isn't an issue because our client relationships go back generations and noblemen do not exorbitantly charge other noblemen."
I think this answers any questions about Bingham and their place in the legal profession. However, I've been to their offices. The rotunda is breathtaking.
Jake, don't you mean that Tuckerbrook Alternative Investments should have expected nothing less from Bingham McCutchen???
If the client agrees on a flat fee for a particular deal or litigation, they can't really complain that they were paid to educate junior lawyers (because that is the fee they agreed upon).
9, thank you for acknowledging Latham's strong economic position. This dose of reality is a welcome break from all the Latham whiners.
Chrometa protects my ass from claims of overbilling. Yikes!!!
It's not called "associate training" if the work is so simple a monkey could do it. About 45% of capital markets work falls into this category.
Billable hours aren't the issue - billing rates for 1st and 2nd year associates are. Cut associate salaries inhalf, and associate billing rates by 40 percent. Problm solved.
Note to people visiting teaching hospitals -- don't schedule surgeries in July, when the new residents come. You may be their first patient.
Note to clients hiring attorneys -- don't seek legal advice in September, you may be the new associate's first client.
Bingham associates are garbage from the lowest ranked law schools. Nobody should pay for their work. Can I get some support on this?
18 - No. A guy I knew who graduated magna from HLS is a partner at Bingham.
18, I think you're mistaken. Bingham has a former SCOTUS clerk in the DC office.
Bingham actually has the most talented attorneys on the planet. In the whole solar system really. Google it.
This article is not newsworthy. Petty clients arguing over bills with non-peer firms? Ultimately you have to convince the client that it is paying for top quality legal services. Stacking inexperienced cogs on a case is quick way to alienate a client. What kind of Mickey Mouse operation is going on over there?
I know a girl from Bingham - Bingham, Idaho!
Everybody trying to latch onto PE's celebrity status, need to stop ruining his humorous posts. PE has been on the downhill ever since JaKe started stealing PE's material.
"So the allegation is that young lawyers were being trained on the client’s dime. But is that an indictment of Bingham McCutchen, or of the billable hour?"
Neither, an indictment of the abysmal state of legal education.
I bet those associates could check footnotes with the best of 'em, though!
Contemporaneous with accusing Bingham McCutchen of a serious ethics violation, this:
"Promptly report any known violation of this Code of Ethics to the chief compliance officer. If anyone is uncomfortable reporting to this person, he may report a violation to the firm's legal counsel, Bingham McCutchen."
Tuckerbrook Alternative Investments, Code of Ethics, available at http://www.tuckerbrook.com/about/codeofethics (visited Sept. 28, 2009)
For the record, the prerequisite to whistleblowing at Tuckerbrook is being a "he."
-JKM
This post is addressed to commenter No. 3.
It seems I neglected to mention this in my last post, but JaKe, don't worry about accepting that offer anytime soon. The NALP does give you 45 days. Also, I advise you to keep your other offers open as well. All preeminent, peer law firms know they have too keep an offer to my son open 45 days.
18, i agree. bingham is full of know-nothing, balding, out-of-shape DBs.
Really, when you hire Biglaw this happens all the time. It's like jumping into the lions' enclosure at the zoo and then complaining that you get your arm bitten off.
Fucking 18% Morgan Lewis NYC offer rate...never forget...
ATL suuuuuckssss this is so boring. delete from server immd
Bingham's offer rate was sub-50% in LA and Santa Monica. Ask me how I know.
http://diylegalguide.yolasite.com/ pretty cool company aimed at cutting out attorneys and assisting clients through legal processes. they do bankruptcy, divorce, wills, anything they can help with and if they need to they have their own list of lawyers to help, and the rates are alot more reasonable.
Transactional work billing = junior associate dogpile. The bigger the deal, the bigger the pile.
- Secure contingency fee litigator
32 is correct. I know several people from top law schools who were no offered by Bingham in SoCal. I hear their offer rate there was WAAAAAAYYYY under 50%.
32 is correct. I know several people from top law schools who were no offered by Bingham in SoCal. I hear their offer rate there was WAAAAAAYYYY under 50%.
I have friends who summered with Bingham and agree with #32 and 35; it nearly rivals Morgan Lewis....
ATL, why are you defending Bingham? Bingham royally screwed its summer associates. All summer long it talked about how great it was doing. Then offers were handed out based on who was best like by the hiring committee, not who actually did real work.
Thank god somebody is finally commenting on this. Bingham screwed over a number of its associates, including its summers. And don't forger the stealth layoffs. To all the 3Ls I interviewed last year, I lied to you during your call back. This place is a hell whole which will suck your soul out. The PR you are being sold is all the company line. To the 2Ls who are thinking of going there, it is ALL marketing. Don't be fooled. You will never actually start as Bingham is the next Thelen.
Why are we talking about this TTT? I thought bingham was a consulting firm that shut down ages ago.
Didn't bingham go out with CHARACTER months ago?
Bingham is ranked on vault? Vault is ranking regional firms now?
Bingham is a shithole full of dishonest partners and even worse management. The firm told many summers that they would be getting offers for full time employment and then in the end decided that keeping one's word is overrated.
What do clerkships have to do with no-offer rates? If Bingham no-offers somebody and then they get a clerkship, they don't get to drop that person from their no-offer count. And if they tell one of their summers that he's no-offered unless a classmate takes a clerkship and opens up another spot, then if the clerk comes back to the firm after clerking that's one less spot available for somebody next year, so somebody's effectively getting no-offered anyway.
If a firm hires 100 summer associates and decides that it's only going to hire 60 of them, that's effectively 40 no-offers, even if some of the 40 decide to go clerk allow the firm to pretend like it has one more spot until the clerk returns next year.
Guys in my high school always used to stack their cases with younger guys who got on the job training while billing clients for all their time. It was no big deal.
Bingham is flying by the seat of their pants here and could very easily implode in 2010 if they don't stop the megalomania. In an environment where many firms are freezing rates or negotiating fees, they have been consistently raising their rates throughout the recession and gouging clients. This is not their only high-profile fee dispute case right now - check it out. It is all driven by Jay Z's desire to graduate into the AmLaw top 20 (or higher) and play ball with larger, more presitgous firms they see as their "peers." Their way of doing this is to thumb their nose at clients who refuse to pay or complain about their bills because, after all, these clients must be stingy low-quality clients, right? I mean (the logic goes) Skadden and Kirkland don't have clients who can't afford to pay $1000/hr so why should we, right? Throw into the equation lots of lawyers who aren't that busy and are looking to pad their hours, and you have a recipe for disaster.
Stay classy, Bingham.
-Former Bingham
I'm not terribly surprised by this. From what I have heard, Bingham all but told summers how to rank their experiences at the firm (4/5 if you hated something).... good firms don't need to do that, and someone should know that Bingham's ratings are false
47 - Bingham is really good about ratings and rankings and surveys, then more ratings and rankings. For all the time it spends with this, you'd think they'd do something meaningful with it besides ginning up the P.R. They are definitely all about the P.R.
-Another former Bingham
Yeah - 47 and 48 -- Bingham loves to talk numbers, such as their offer rates. Unfortunately, it is rarely true or at best, some convenient version of the truth. Ask them how many people they have laid off since last year and based on what I've seen publicly and what I know, way under the radar. Agree re the PR All smoke and mirrors all the time.
-Yet another former Bingham
There are no stealth layoffs at bingham. The departing associates simply realized, en masse, that they really didn't like having a job. The firm is doing great, really having a banner year. Do not look at the man behind the curtain.
50 is Uncle Zimmerman.
Heard a rumor that they need space because they did an office swap of the few quality McKee Nelson attorneys for bingham's shitty, underperforming attorneys, exiling those shitty bingham attorneys to McKee's office. true?