Billable Hours, Money, Partner Issues, Partner Profits

Simpson Thacher Threatens to Withhold Salary For Delinquent Time Keepers

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If you talk to law firm partners who are in charge of collecting fees, they’ll tell you that getting clients to pay has become a real hassle ever since the recession started. Clients are trying to make their books look as palatable as possible, and if that means avoiding or delaying payments to their lawyers, well, then that’s what they are going to do. Collecting fees from clients is one of the top concerns of Biglaw managers.

And it should be a top concern for Biglaw associates. Nobody is going to be getting a bonus when the firm cannot realize its profits.

You’d think every practicing attorney would be on the same page with this by now. You’d think, at the very least, every person would be diligently putting in their time to give their firm the maximum opportunity to collect on their billable hours. But apparently some people haven’t gotten the memo that putting in your hours in a timely fashion is critical in this environment.

Well, at Simpson Thacher, they want to know your hours, now. And the firm is threatening to bring the hammer down on attorney timekeepers who are putting off this important paper work. Put in your hours, or STB will hit you where it hurts — the wallet…

Yesterday, STB essentially threatened its attorneys with wage garnishment if their time is not entered in a diligent fashion. First, here’s the carrot from the firm-wide Simpson memo:

Section 111. B. 1. of the Legal Policy Handbook sets out the firm’s longstanding policy on the completion of time records. Every lawyer is required to maintain accurate records concerning all billable and nonbillable work performed, and these time records need to be prepared, submitted, and released daily, even when the lawyer is outside the office.

Maintaining daily time records is very important to both the firm and our clients, as it directly impacts the firm’s ability to administer work assignments, to bill clients on a timely and accurate basis and to provide clients with current and accurate estimates of accrued time upon their request. A growing number of clients require us to provide periodic estimates and to exclude non-current time from bills that we send them.

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And now, the big-ass stick STB is willing to wield against its own people:

In order to emphasize the importance with which the firm views this policy, the third paragraph of Section 111. B. 1. has been amended to read as follows:

Maintaining daily time records is very important to both the firm and our clients, as it directly impacts the firm’s ability to administer work assignments and to bill clients on a timely basis. If a lawyer is missing ten business days of diaries prior to any payroll date, the lawyer’s gross salary will be reduced by twenty percent prospectively for the next pay period. The reduced salary will continue in effect until diaries are no longer ten business days in arrears by a payroll date. Restoration to the prior salary will occur in the pay period following the pay period in which the lawyer’s time records are once again current, and retroactive restoration will only be made in exceptional and rare cases, such as in some situations of personal or family illness or emergencies, with such reimbursement to be approved in writing by a co-chair of the Personnel Committee. If a lawyer has any reason to believe that he or she will be unable to complete time records in compliance with this policy, the firm expects that the lawyer will raise the matter in advance.

A 20% salary reduction, and they won’t return that money to you absent special circumstances! Does Simpson have your attention now? It’s like the firm is channeling Mr. Blonde:If they hadn’t done what I told ’em not to do, they’d still be alive.

And while these measures might seem a little draconian from Simpson, isn’t the firm absolutely correct in this instance? Putting in your time is crucial. If you can’t make a point to get in your hours once a week, you are directly responsible for hindering the firm’s efforts to make money. If you’re going to hurt the firm’s ability to make money, then it will hurt yours. It might be a bit Hobbesian, but it doesn’t strike me as unfair.

STB collecting enough money to keep partner profits soaring, but then turning around and making a cheap bonus payment to its associates — that might be unfair. But to the extent that STB attorneys are hoping for a big-time bonus, the least they can do is to make sure to log their time.

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If you are an STB associate, I suggest you put in your time before commenting on this post. I’m just trying to help.

Read the full Simpson memo below:

SIMPSON THACHER & BARTLETT — MEMORANDUM — TIMEKEEPING

November 1, 2010
TO: All Associates, Counsel and Senior Counsel in New York and Washington, D.C.
FROM: [Redacted]
RE: Daily Time Records

Section 111. B. 1. of the Legal Policy Handbook sets out the firm’s longstanding policy on the completion of time records. Every lawyer is required to maintain accurate records concerning all billable and nonbillable work performed, and these time records need to be prepared, submitted, and released daily, even when the lawyer is outside the office.

Maintaining daily time records is very important to both the firm and our clients, as it directly impacts the firm’s ability to administer work assignments, to bill clients on a timely and accurate basis and to provide clients with current and accurate estimates of accrued time upon their request. A growing number of clients require us to provide periodic estimates and to exclude non-current time from bills that we send them.

In order to emphasize the importance with which the firm views this policy, the third paragraph of Section 111. B. 1. has been amended to read as follows:

Maintaining daily time records is very important to both the firm and our clients, as it directly impacts the firm’s ability to administer work assignments and to bill clients on a timely basis. If a lawyer is missing ten business days of diaries prior to any payroll date, the lawyer’s gross salary will be reduced by twenty percent prospectively for the next pay period. The reduced salary will continue in effect until diaries are no longer ten business days in arrears by a payroll date. Restoration to the prior salary will occur in the pay period following the pay period in which the lawyer’s time records are once again current, and retroactive restoration will only be made in exceptional and rare cases, such as in some situations of personal or family illness or emergencies, with such reimbursement to be approved in writing by a co-chair of the Personnel Committee. If a lawyer has any reason to believe that he or she will be unable to complete time records in compliance with this policy, the firm expects that the lawyer will raise the matter in advance.

Before each payroll date, associates, counsel and senior counsel with missing diaries will be reminded that they are in arrears and are required to get their diaries up to date. Further reminders will also be sent prior to the payroll date. We hope and expect that all lawyers will comply with the policy, and that the penalties set out will not need to be enforced. We note that while the penalties will only apply when diaries are ten or more business days in arrears prior to a payroll date despite several reminders, the firm’s policy continues to be that diaries should be submitted on a daily basis. The policy change will first apply to the final November payroll and will be applicable to all associates, counsel and senior counsel in the New York and Washington, D.C. offices.

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