When Partners Ask Associates Not To Record Time . . .

What's a poor associate to do? Thoughts from Biglaw partner turned in-house counsel Mark Herrmann.

I stuck my hand down in the bag of fan mail and pulled out the topic for this post.

(Yeah, yeah: It isn’t a very big bag.)

“Dear Mark,” writes my fan:

“An associate friend of mine has a conundrum. One of his firm’s clients has strict billing controls. The client restricts how much, when, and what types of tasks associates may bill the client for.

“A partner at my friend’s firm stridently strives to deliver excellent service to this stingy client. She asks my friend if he wants to work on an upcoming case for stingy client. ‘You have to understand though,’ she explains to him, ‘that you may need to not record some of your time for this client if you want to work on this case.’ She has also said, ‘Use your best judgment about what you can bill for.'”

What, my correspondent asks, is a poor associate to do? Not record his time, thus taking it on the chin to make his partner and client happy?

Or record all his time, thus protecting the associate’s life, but infuriating the partner?

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Here’s my answer: This shouldn’t happen.

I know that this does happen, so my answer isn’t very helpful. It’s like the other plea I’ve occasionally heard: “What do I do when the mediator asks me for my absolute bottom-line settlement authority? I’m not supposed to lie to a mediator, but I surely can’t reveal the limit of my authority, or the mediator will use it against me. How do I respond?”

Here’s my answer: This shouldn’t happen.

The mediator should understand that the rules of ethics collide with the rules of practicality when the mediator asks you to disclose your true authority, so the mediator shouldn’t ask.

I know that this does happen, so my answer isn’t very helpful. But it shouldn’t happen.

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How about the poor associate asked not to record time?

Firm policy should be — and typically is — that associates should record all time that they work. If a firm works by the billable hour, then the firm must know how many hours its lawyers are working. If the firm is effectively discounting the fee to a particular client, then the firm should know that it’s discounting the fee. If the firm wants to discourage partners from discounting fees, then the firm must know that time is being written off, and the firm should penalize partners who attract (and work for) clients who pay less than what the firm hopes to realize.

When an individual partner asks an associate not to record time, the partner is deceiving the firm; that’s not nice. The associate should record all of his time, and the partner should then decide what she wants to bill. If the client is not sufficiently profitable, then the firm should not work for the client.

Law firms often have many strategies for how they price firm work. The firm may have some regular, high-volume clients for whom the firm discounts its hourly rates. The firm provides the discount knowingly, because the firm benefits from the certainty that it will have a continuous volume of work over time.

Law firms may have other clients that come to the firm only episodically, but pay more for that work. That’s fine, too; this may be an intelligent strategy, and the firm should know what it’s doing.

Firms may do some work on contingency, knowing that those cases will pay off on average, even though they’re not billed by the hour.

Firms should not encourage associates to prefer one type of work to another. If associates avoid the regular, but lower-paying work, the associates are defeating the business strategy of the firm, which was to embrace that work because of the institutional benefits it provides. It is both unfair to the associate and unwise for the firm to penalize associates — by having them not record time — for doing work that the firm needs associates to do.

It is of course legitimate for a partner to tell an associate, “Don’t spend more than four hours researching this issue. After three hours, if you think this will take more than four hours, call me and we’ll work something out.” That’s just a business or tactical decision about how much to spend looking into an issue.

And it’s certainly fair for a partner to ask, incredulously, “It took you two weeks to draft a pro hac vice application? That shouldn’t have taken more than 30 minutes. I’m writing off virtually all of your time, and I have some doubts about your efficiency. Let’s talk.”

But the partner should not say, effectively: “This client won’t pay the firm’s rates, but I desperately need the client for my own financial well-being. If you record all your time, I can’t bill the client for it. And I can’t write off time that you record, because then the firm would know that I have a low realization rate, and the firm would punish me accordingly. Instead of declining to work for the client (which is probably what I should do), I want you to ruin your life by not recording time, so that I can deceive the firm and thus make more money.”

What should an associate do when a partner asks him not to record time? It may be difficult to complain about this to the partner who made the improper request. It may be equally difficult to complain to the firm about the partner’s improper request; ratting out partners may not be a career-enhancing move.

Firm policy should forbid partners from asking associates not to record time, and firms should enforce that policy.

But if a partner ignores firm policy – what then?

Sorry — I don’t exactly have a solution for the dilemma posed by my correspondent. All I can say is that the partner should not have made the request.

Perhaps a commenter will have an actual solution to the problem.

(And, of course, thanks to my correspondent for having raised this issue. Keep those cards and letters coming in; you’re an interesting readership.)


Mark Herrmann is the Chief Counsel – Litigation and Global Chief Compliance Officer at Aon, the world’s leading provider of risk management services, insurance and reinsurance brokerage, and human capital and management consulting. He is the author of The Curmudgeon’s Guide to Practicing Law and Inside Straight: Advice About Lawyering, In-House And Out, That Only The Internet Could Provide (affiliate links). You can reach him by email at inhouse@abovethelaw.com.