Billable Hours

Ed. note: This is the latest installment of Small Firms, Big Lawyers, one of Above the Law’s new columns for small-firm lawyers.

I live near Wellesley, Massachusetts, a Boston suburb usually described with words like “leafy” and “tony.” (I get “leafy,” but I’ve never really figured out “tony.”) Think soccer moms in yoga pants and BMW SUVs. On the edge of town, where it is less leafy and tony, there is a small tailor shop. The owners are immigrants; English is not their first language. This is clear from the computer-printed signs on their windows and walls. My favorite sign is the one behind the register:

“YOU NEVER LOOKED SO EXPENSIVE!!”

(Unnecessary quotation marks and extra exclamation point included.) I’m not exactly sure what they were trying to say. Maybe expensive wasn’t the word they were going for. Good? Chic? Tony? I don’t know. But the amusing phrase has stuck with me, and with many of my neighbors. I’m not even sure of the name of the shop, but everyone knows what I mean when I mention the sign. It’s a tailor-shop meme.

And a good one. In fact, I’d like to see small-firm lawyers make a similar sign and tape it to their mirrors. (Yeah, I know. I’m not a mirror-message taper either. But indulge me here.) Because the tailor-shop meme might remind them not to make the single biggest mistake that small-firm lawyers usually make: pricing their services too low….

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I used to race home to have sex with my wife. Now I leave work a half-hour early so I can get home before she does and masturbate to porn.

“Perry,” a 41-year-old lawyer, quoted in a recent New York magazine article on pornography’s effect on the male libido.

After a year like 2009 (aka the worst year ever for Biglaw), 2010 was bound to be better.  According to the nearly 1,000 survey responses we received, 2010 did in fact turn out to be a busier year for most associates.  An impressive 73% of respondents hit their firm’s minimum billable hours requirements or unofficial billable hours expectations, which ranged from 1,600 to 2,200 billable hours.  You can find a breakdown of the results by minimum billable hours required or expected, as well as by practice area, after the jump. 

Stay tuned for our next post, addressing associate satisfaction with 2010 bonus payments.  In the meantime, you can learn more about billable hours and bonuses at the nation’s top law firms on the Career Center, hosted by Lateral Link

Now, on to the survey results….

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By most accounts, law firms had a stronger year in 2010 than in 2009 (although you wouldn’t know it from the disappointing bonuses that many of them paid out). Did a busier year translate into plenty of billables for all associates? In this week’s survey, we want to know whether you met your firm’s minimum billable hours requirement (or unofficial billable hours expectation), and how happy you are with your bonus for the amount of hours you billed.

Please take our short survey below (we keep responses completely confidential), and we’ll bring you the results next week. In the meantime, you can compare billable hours requirements between the leading law firms at the Career Center, hosted by Lateral Link.

Ed. note: This is the latest installment of Inside Straight, Above the Law’s new column for in-house counsel, written by Mark Herrmann.

Also, in case you missed them because of the holiday break, be sure to check out his recent posts on in-house compensation and bonuses.

First, a story. Then, my point.

(If I promise a point at the end, maybe you’ll persevere through the story.)

When I was a partner at a large law firm, sending out bills, I took the job seriously. I sat in a coffee shop one Sunday afternoon each month and went through every !*@!! time entry in every bill to be sure that (1) I could understand what task the lawyer had performed and (2) the time spent was not disproportionate to the work performed. Only then would I approve the bill.

Editing bills is like torture. In fact, strike the “like.” This is torture. At the end of three or four hours of editing bills, you’re ready to jam toothpicks into your eyes. So I took a lesson from Tom Sawyer and whitewashing fences: I conned my teenage son into thinking that editing bills was a very important job. He bit! (Other than falling for this, the kid is actually pretty smart.) During Jeremy’s sophomore through senior years of high school, he and I did some father-son bonding on the third Sunday of every month at the local coffee shop. I bought the kid a caramel frappuccino (“venti” if we were doing north of 500 grand in bills; otherwise, grande; always with whipped cream). He took half the stack of bills; I took the other half; we edited. (Stay calm. I didn’t charge clients even for my own time spent doing this, let alone the kid’s. This was on the up and up.)

What did we do?

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I find it funny that firms that want to skimp on bonuses also expect associates to make sure they are helping the overall health and performance of the firm. At some level, why should associates care if the firm is up to date on its collections? It’s not like that money is going to trickle down to the time keepers once their hours are realized. Hell, we’ve got people in the comments claiming they are going to purposely underbill in order to hurt firms in 2011 for stinginess in 2010.

The firms aren’t wrong to be doing everything they can to get associates to enter in their hours in a timely fashion. Time keeping is more accurate when you do it every day (as opposed to trying to recreate your days at the end of the week or month). Firms are struggling to collect from their clients. And, for what it’s worth, billing hours is part of the job for attorneys. I just find it ironic that firms are trying to pressure their associates to produce more money for them even as they are sharing a smaller percentage of those profits with associates.

It’s pretty clear that being a part of a Biglaw firm isn’t a “team” proposition. Everybody for themselves; that’s how the partners act, and that’s how partners expect associates to act.

And so Hughes Hubbard is bringing a little personal punishment to associates who are late with their time…

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Although the matter is still being contested — Northland has asked a court to reduce its bill still further, to zero — the arbitrator’s finding calls into question the business model Goodwin and many other large law firms have relied on for decades: Deploying huge legal teams to pursue clients’ cases, often assigning more than a dozen lawyers to compile research, conduct depositions, and draft motions.

— an article in the Boston Globe about a recent fee dispute between Northland Investment Corp. and Goodwin Procter, in which an arbitrator concluded that Goodwin overcharged Northland by more than $540,000 (gavel bangs: ABA Journal and WSJ Law Blog).

Last month, we profiled Steven Pesner, a partner at Akin Gump who sounded like an egomaniac while threatening associates who did not promptly enter in their time.

Prior to Pesner, Simpson Thacher threatened to dock the pay of timekeepers who are delinquent.

Entering time is important, but sometimes you can get more flies with honey than with douches. At least at Brown Rudnick, the firm is trying to reward dutiful time keepers instead of threatening those who fall behind…

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Even the Grinch's dog knew when to take a break.

Welcome back from your long weekend. I trust everybody is ready to put in a lot of hard work through the holiday season in order to finish the year off strong.

Ah, what’s the point? Based on the early bonus news, it seems that Biglaw managers are going to go with stingy bonus payments for the second year in a row. And while we’ve reported that hours appear to be up this year over last year, hours aren’t back to 2007 levels.

If firms are going to keep bonuses at 2009 levels until their profits get back to 2007 levels, well, then maybe it’s time to kick back and do some shopping on Cyber Monday

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Nothing says “Biglaw” quite like an old-fashioned partner threat. Biglaw partners, a self-important bunch if there ever was one, generally do little to mask their huge egos. But when those egos express themselves in the form of threats against underlings, well, that’s when you learn why people get paid $160,000 right out of school.

You see, in most situations you just can’t treat highly educated people like naughty schoolchildren and expect them to take it. Not if you are paying them $50,000 a year for some average, middle-class lifestyle. They’ll quit. They’ll tell you to take your BS job and shove it down your condescending throat. But when you pay people $160,000 (or more), then you can talk to them however you please. They’ll take it (and apparently thank you for it). Biglaw partners know that their associates are being paid more money than they can make nearly anywhere else, and so they have little incentive to consider how they speak to their associate colleagues.

Now most partners threaten or belittle people on an individual, face-to-face basis. But sometimes these communications are disseminated to a broader group, and on the rarest of occasions these partner meltdowns are captured over email and sent to Above the Law. And those are the best.

Yes, Steven Pesner of Akin Gump, we’re about to make you a star….

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