Billable Hours

Where My Boies At? Some Wonder About April Bonuses at Boies Schiller

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Over the past few weeks, we’ve heard some surprising rumblings of discontent from Boies Schiller. Why do we say “surprising”? Because the complaints have been about compensation, which is typically something that BSF lawyers never complain about.

Boies Schiller, the litigation powerhouse founded by the legendary David Boies, is an amazing firm. Its lawyers work on some of the biggest and most important cases of our time, and their compensation reflects that. In addition to paying above-market base salaries — the BSF scale starts at $174,000 — the firm pays bonuses that blow the NYC market out of the water.

In recent years, Boies has made two bonus payments to associates, one in December and one in April. But this year, April came and went, and many lawyers did not receive any payout. Of those who did receive payments, many were surprised at the small size.

So what happened? Did the relative cheapness of the disappointing spring bonuses at Sullivan & Cromwell trickle down (or up) to Boies Schiller? Let’s discuss….

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A Biglaw Firm Institutes A Smaller Hours Requirement

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Billable-hour requirements are generally like the price of gas: they just keep going up. A law professor might compare it to a one-way ratchet. As law firms try to increase their profitability — by doing more work with less manpower, thanks to recessionary layoffs that haven’t been completely reversed — they ask more and more of their lawyers. Right?

Well, not necessarily. One Biglaw firm recently lowered its hours requirement — and instituted some other perks worth noting.

Might other firms follow suit? Perhaps yours?

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Quote of the Day: The Way of the Future

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There are firms that won’t do it at all, and God bless them if they can get away with that in this environment. Any law firm leader today who thinks they can do 100 percent of work on billable hours forever into the future is not going to have a law firm for very long.

– Robert Lipstein, a partner at Crowell & Moring, explaining the shift toward alternative fee arrangements within the legal industry.

How Many Billable Hours Do You Have to Work Before You Are ‘Busy’?

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It’s a problem that has vexed Biglaw types since the legal “profession” turned into a business where money is made off of huge hours billed by disposable, replaceable associate attorneys — what’s the maximum number of hours associates can bill before they break?

The question is not one of how much high quality work a person can do. Nor is it really an issue of attorney efficiency. Instead, the firms are looking at the manual labor hours they can expect to get out of each of their cogs drones associates. Too few, and the firm ends up leaving money on the table. Too many, and associates leave faster than the firm can train replacements. Way too many hours, and people start, you know, dying and stuff.

Applying enough pressure so that the branches bend but don’t break is why office managers get paid the big bucks (most of them stopped being particularly useful attorneys years ago). Let’s check in on how one of the most profitable firms in the country gets it done….

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Morning Docket: 04.16.12

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Apparently Google thinks this Mob Wife is a 'cheap hooker.' If nothing else, she totally dresses like one.

* The harsh realities of post-recession practice: will Biglaw leaders have to resort to alternative billing practices in order to survive? Well, they better, or else they’re “not going to have a law firm for very long.” [Washington Post]

* I don’t think “secret service” means what you think it means. Listen up, agents, prostitution might be legal in much of Columbia, but it makes America look bad when you can’t afford a $47 hooker. [New York Post]

* Jessica Recksiedler, the judge assigned to oversee George Zimmerman’s case, may have a conflict of interest thanks to her husband. Somebody’s getting banished from the bedroom this week. [Bloomberg]

* Law firms with ties to New Jersey Governor Chris Christie have seen record profits compared to their take under Jon Corzine’s rule. That said, even if he called them “idiots,” it was totally worth it. [Star-Ledger]

* UMass Law is being reviewed for accreditation by the American Bar Association, and opponents are throwing some major shade. As if Dean Ward’s scandalous resignation wasn’t enough. [South Coast Today]

* Is this house haunted as a matter of law? That’s what this New Jersey couple is hoping that a judge will say about their rental home. Hey, it wouldn’t be the first time it’s happened in the tri-state area. [ABC News]

The Practice: When Things Are Slow

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Lawyers don’t like to be honest about not making money. (Unless you’re Jordan Rushie.)

I went out on my own in March of 1998. I did no advertising. The first month, I made three times what I was making monthly at the small firm I worked at for nine months. I was well on my way.

April was about the same, and so was May.

This was awesome. No looking back. Who said starting your own firm would be hard?

Then came June.

Nothing. No new cases, no money. The phone didn’t ring.

It was over. Three good months, and now I was done. I, of course, freaked out.

A few days into July the phone rang, and I was back. Whew. So I had one slow month. Now it would all be fine.

Then it happened again, and again, and again….

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Morning Docket: 04.09.12

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* The billable hour may be far from dead, but last year, 61% of general counsel worked out alternative fee arrangements with outside counsel, including counsel from elite (read: Biglaw) firms. [Wall Street Journal]

* Dewey need to take lessons on revenge from this firm? John Altorelli, the D&L defector who spilled all the beans to the Am Law Daily, was blasted on Page Six this weekend. More on this to come later today. [New York Post]

* CHECK YOU LATERALS: recent Quinn Emanuel hires William Burck, Paul Brinkman, and Andrew Schapiro, as well as name partner John Quinn, have entered appearances on behalf of Megaupload. [Am Law Daily]

* Copyright infringement suits over porn downloading involving some 3,500 defendants were dismissed because the plaintiffs’ attorney, Terik Hasmi, couldn’t get it in legally in Florida. [National Law Journal]

* In England, there’s no such thing as a no-fault divorce, but instead, you can get one for “unreasonable behavior” — behavior like malicious service of tuna casserole, and speaking only in Klingon. [New York Times]

* This gives “I’m a Slave 4 U” some new meaning. Britney Spears’s fiancé, Jason Trawick, is trying to start their impending rocky marriage off on the right foot. He’ll soon be her co-conservator. [New York Daily News]

From Biglaw to Boutique: Beyond the Math

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Tom Wallerstein

There comes a time in all associates’ careers when they stop and do the math. They think about their salary, bonus, and benefits. They think about their billable hours. They multiply their billable hours by their billable rate and suddenly they think, hey, WAITAMINUTE. My firm makes three four five times what it pays me!

Like any other salaried employee, the more hours an associate works, the less they make per hour, bonuses notwithstanding. They might not mind so much if they’re also bucking for promotion, i.e., up for partner. Regardless, at some point, every associate thinks, “if only I were paid as much per hour as I bill per hour . . . .”

That moment for me was the epiphany that ultimately led to helping form my own firm. But since that time, I’ve also been able to see the other side of the fence, so to speak. There are a lot of reasons — some obvious, and some less so — why the math isn’t quite as simple as it seems….

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Married to the Firm: Partners Act Like My Kids

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Ed. note: This new feature is by “Rachel Marks,” the spouse of an attorney at a large law firm. She’ll be blogging about how having a husband in Biglaw affects the life on the home front. And she’ll be talking about what your spouses really want out of your career. You can reach her at rach512744@yahoo.com.

My name is Rachel, and I’m married to a NY Biglaw guy who’s married to his firm. (And when I say married to his firm, I mean it in the typing-on-his-Blackberry-as-his-wife-is-pushing-out-his-second-child kind of way.) Thus, for obvious reasons, my name is fake, my location is undisclosed, and this might not even be me writing these words.

Why would a Biglaw wife want to write on Above the Law, you might wonder? Well, my husband is usually doing one of three things: working, sleeping, or reading this blog. (How I wish this was an exaggeration!) And since he doesn’t like it when I call him in the office (not that that stops me!), and he’s impossible to wake up, I can FINALLY get his attention now that I’ve come to a place where he’s sure to come by. (And on that note — hon, don’t forget to put out the recycling this evening, and you MUST call your mother and have that *talk*.)

Now, on to my real order of business, since perhaps this could all just be handled in some couples’ counseling: SPRING BONUSES. Where the heck are they?! Even I’ve begun reading ATL regularly, in hopes of seeing that wonderful yet ever elusive siren at the top of the page, alerting readers of the breaking news that my husband’s bonus is now only 50% depleted (as opposed to its current 75% depletion) from the glory days of bonuses past….

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Why Americans Need to Work Less (Lawyers, You Too)

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When I visited New York back in January, I stayed with some friends. When I woke up Saturday morning on the couch, my buddy and his roommate had already taken out their laptops and were typing away. I asked, “What are you guys doing today?” They both responded, “Working.”

I could not believe it. It was a surprisingly warm winter day. And my friends decided to remain cooped up in their literally windowless Manhattan apartment. Why wouldn’t they go outside? Go to park, or a bar for some day drinking.

But that’s America. We are always connected, always on call, and ignoring your BlackBerry for more than 90 minutes may be a fireable offense.

It wasn’t always this way. And there are some heretics among us who make a compelling case for a return to the 40-hour work week. Before you shoot the scruffy Californian, hear me out….

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The Practice: Setting, Earning, and Keeping Fees in Small Law Firms

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Ah, nothing brings around the lawyers of today like the talk of money. One of the most popular Google searches by law students and lawyers is “how to make money as a lawyer.” I rarely see searches for “how to cross examine the expert witness,” or “building a reputation, one case at a time.”

It’s all about the cash.

So here it is, here’s your red meat:

Charging “what everyone else charges” is for losers.

Good clients know you get what you pay for. Cheap, annoying, time-sucking, Bar-complaint-filing clients try to own someone for nothing. If you want the same clients everyone else has, charge the same legal fees. You can be Wal-Mart, or you can be Saks. More people shop at Wal-Mart, but people looking for quality shop at Saks, and they know the difference. They go in, they see something they want, and pay for it (without a payment plan). (And don’t tell me “credit cards are payment plans.” The seller gets the full amount, the buyer makes payments to the bank.) Saks doesn’t have “low prices,” and customers aren’t going there for low prices. They’re looking for quality. Price is secondary….

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Non-Sequiturs: 02.29.12

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Everybody on the whole cell block…

* Now prison inmates will literally be able to listen to the jailhouse rock. Dancing to it is a different issue. [USA Today]

* Why do students surf the web in class instead of taking notes? Probably because their professors are boring. [Legal Skills Prof Blog]

* The current Supreme Court justices have less time practicing law or working in politics than any other previous Supreme Court roster. But they have way more pillow fights. [Social Science Research Network via Instapundit]

* The chief judge of the U.S. District Court for the District of Montana emailed some friends a fairly offensive, racially charged joke about President Obama from his courthouse chambers. He will probably have to apologize. [Great Falls Tribune]

* “It’s like having a pace runner in a marathon: I don’t have to burn out running the 26.2 miles as fast as I can.” The only difference is that this new tool measures billable hours instead of miles. [ABA Journal]