Billable Hours

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

When I moved in-house ten months ago, my phone started to ring off the hook — and not just from folks I hadn’t spoken to in years, who thought that I’d now be itching to retain them. I also got a few calls from people who were simply curious about the difference between working in-house and working at a law firm.

One of the differences is self-evident: You arrive at work on your first day at a corporation, and you devote that day entirely to ministerial crap. You spend an hour completing immigration forms, spend an hour having your photograph taken for various ID cards, fill out your health insurance and retirement benefit forms, create passwords for a dizzying array of computer databases, set up your computer to receive corporate training, and then realize that everyone is heading home.

Ouch! Another wasted day! You didn’t do a minute of billable work. You might as well have been on vacation today, because you did nothing that could legitimately be charged to a client.

But wait….

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Earlier this month, we asked you to tell us how you were doing with your hours.

I planned to announce the results of the survey when the first firm announced bonuses contingent on an hours requirement. But since bonus news is late this year, perhaps Rudolph has some sort of tumor?

I still think bonuses will come. Associates will stand in Evan Chesler’s office and force him to watch them shoot bunnies until he names a bonus, if they have to.

So they’re coming. While we wait, let’s take look at how hard people are working. It turns out that quite a few of you have been busy little bees…

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As we said yesterday, there’s still time left in the year for associates to crank out some billable hours to hit their targets. There’s still time to participate in our hours survey, where the early returns suggest that many of you are quite busy.

That’s a good thing, especially if you are at Mayer Brown, New York. No, the firm hasn’t released bonus information yet. In fact, the firm hasn’t even released its 2011 payscale.

But Mayer Brown is telling people how many hours they need to hit in 2010 in order to be eligible for a 2011 raise…

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With just about six weeks to go in 2010, it’s time to check in on how people are doing with their billable hours.

At the start of the recession, hitting your hours could mean the difference between having a job and emailing Above the Law about stealth layoffs at your firm. This year, there hopefully isn’t that kind of pressure (at least not to the same degree). This year, hitting hours targets should be all about your bonus.

Of course, the difference in total compensation between a fourth-year associate who bills 1920 hours and a fourth-year who hits 2050 could be significant. The early buzz is that bonuses will be substantially bigger this year than last year, but the drop-off from one hours level to the next could be significant. Some firms might make bank-busting payments that will generate sweet headlines, but not all associates will hit the hours mark necessary for the top payment.

Still, with a month and a half to go, there’s time to “juke your stats,” as they say on The Wire. If finding an extra 80 billables between Thanksgiving and Christmas makes a huge difference, clients should be prepared for their attorneys to drag out any assignments they get. Sorry clients, associates gotta eat too.

So how are people doing? Take our poll, and get a sense of how many hours your peers are on pace for….

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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…

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Glenn C. Lewis: he's a billable-hour machine.

A few days ago, the Washington Post reported on the legal misadventures of prominent D.C. attorney Glenn Lewis (no relation to the Canadian R&B singer, as far as we know). According to the Post, “Glenn C. Lewis is an acknowledged titan of the D.C. area divorce bar, a former president of the Virginia Bar Association who boasts that he is the most expensive lawyer in the region: $850 an hour. He has an impressive office in the District and an array of high-profile clients.”

One would expect a lawyer of Lewis’s stature and success to have impeccable judgment. But it appears that recently he made a serious misjudgment. He decided to sue a former client for an extra $500,000 in fees and interest, after having already received some $378,000 from that client.

Unfortunately for Glenn Lewis, that client was a lawyer — and decided to strike back. By the end of the whole episode, Lewis ending up owing his former client money — an amount in the six figures….

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After a bit of explanation last week, we’re back to live action. As you’ve likely concluded from the title, this is the second installment in a series. Last week we discussed hours spent in the office, with the lesson for future small law practitioners being this (based on your comments and emails): small law practice doesn’t necessarily mean fewer hours.

On the heels of that conversation, I thought we should delve into the reason young associates so often spend those long hours in the office becoming fatter, more pale versions of their pre-law selves. It’s likely the bane of your existence regardless of the size of your firm or the size of the city in which you find yourself…

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I graduated law school in 2006 at the same time as a close friend. We’ll call him Brian, since that’s his name. Brian went to a top five law school; I went to a… well, not a T-5. He took a Biglaw job in Manhattan; I moved home to Georgia, where I ended up in Small Law. Having used each other as sounding boards throughout law school, it only made sense that we’d continue to do so as we transitioned into our respective practices. We shared many of the same fears and growing pains. For example: Did I pass the bar exam? Am I handling this issue correctly? What work am I allowed to, or even supposed to, hand off to a paralegal/secretary?

Beyond those general issues, I was surprised at how different our worlds really were on both a macro and micro level. Most of you have heard or been a part of discussions on the general differences that Small Law is supposed to provide: better hours, less pay, more freedom, etc. I want to move past broad generalities and share some of my actual experiences as compared with Brian’s, as a means to jump start a discussion. There have been some very thoughtful comments attached to the first two posts, and I hope that trend continues here.

This will be the first of several posts dedicated to a deeper dive into the world of Small Law and how it measures up to its Biglaw counterpart. Let’s start with…

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If you are a client looking for a lawyer, what will be the biggest influence on how much you pay that lawyer per hour? The excellence of the lawyer you hire? Please; pull yourself up off the ground and get back on your turnip truck.

Doesn’t it make more sense to pay more for lawyers at bigger firms? After all, size is what your looking for, not great legal work — right?

A new report, called the Real Rate Report, illustrates that firm size and city have more to do with price than the experience of the attorneys charging you money…

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People are talking about an interesting Slate article entitled “Leaving Big Law Behind: The many frustrations that cause well-paid lawyers to hang out their own shingles.” It’s currently the most-read piece on the site. But it’s actually quite similar, even down to some of the sources, to an article that appeared a few days earlier in Crain’s New York Business:

A lawyer’s hourly billing rate used to be a badge of pride — the higher the number, the more valuable (and supposedly brilliant) the lawyer. But over the past 18 months, a strange phenomenon has been sweeping the legal arena: Partners at major law firms are quitting because they want to be able to charge less for their services.

This is, of course, not a new development. Kash and I wrote about it in a December 2009 cover story for Washingtonian magazine, in which we interviewed a former member of the $1,000-an-hour club who left a large law firm and started his own shop so he could offer clients better value. But all the recent coverage — in Crain’s, Slate, and elsewhere — suggests that the trend is picking up steam.

Which kinds of lawyers are leaving Biglaw to hang up their own shingles? Why are they doing it? And how’s it going for them?

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