Above the Law

Students are concerned about hours. So are firms. You will hear anecdotes and twice told tales about monstrous hours. You will hear that Smith & Jones is a sweatshop, but that Arnold and Baker is a laid back place. Most lawyers are hard working by nature and will work hard no matter where they practice. You will work many hours beyond client hours to manage the practice, be trained and to train others, stay current in your field, market, and manage the firm.

The differences among firms’ expectations have never been as great as students believe (and hope). In the wake of the 2000 and 2007 compensation avalanches, expectations on chargeable hours changed forever. Do not assume that size has a direct relationship to chargeable hours. And, do not assume that third hand hearsay about “kinder, gentler” firm ABC has any bearing today. On the flip side, you should not always assume that a premier mega-firm is hostile, impersonal, or any more demanding than its somewhat smaller distant cousins. Firms that pay at the top (no matter how large) have comparable expectations.

Chargeable hours for associates at leading firms are rising. The once typical expectation of 1,900 hours a year has nudged north to 2,000-2,100. It is an inevitable consequence of the dramatic increases in compensation. Most firms have chargeable hour guidelines (quotas). They establish a performance floor for compensation purposes. If your hours fall below the floor, your compensation and future are in trouble. Earning $160,000-300,000 annually from your 1st through your 7th year out of school for 2,000-2,300 hours of work does not violate the 13th Amendment.

Typical associate chargeable hours in mega firms and large firms are 2,000-2,100 per year. However, the typical associate who is “in the hunt” for partnership – an ambitious-prime-time-player – are likely to bill 2,300-2,400 hours per year. Typical partner hours for the same firms are at the same level — and when one includes the time that partners spend developing business, managing clients, and administering the firm, their total time is typically higher than total time for associates. The message for students: when one becomes a partner, one will work harder. And the best will work harder than that. Tough but true facts that students should understand before they dip their toes in the professional pond of private practice.

Even the best, hardest working and most focused lawyer can’t bill more than 80-85 percent of their time in the office. It’s just not possible. Interestingly the battle to do so does not get easier with age because as you become more senior your administrative distractions (all of the above plus the development of clients and the management of the law firm) become greater.

If you want an adventure, join the Navy. If you want short days, leave the law. It’s a demanding profession and will become more so in the next century. Every year brings stories of lawyers abusing the chargeable hour. What does this mean? Any system that rewards people for hours billed will encourage some people to abuse the system. Ironically, when work is slow, some lawyers panic and pad their hours. Senior lawyers may hoard work to protect their own hours without regard to whether the work should be done by junior lawyers at a lower rate (cheaper) for the client.

You will read occasional stories about remarkable hours — e.g., that local lawyer who billed 5,500 hours. That’s not the real story. The real story is “mild padding.” If 50% of a firm’s lawyers add .50-.75 hours per day to their time records, then 8-15% of the partners’ net profits come from false time entries. If your compensation is tied to hours, you may round up rather than round down. It is as if you were allowed to grade yourself in law school. It’s a disturbing problem that many lawyers don’t want to acknowledge.

In many “life style” firms where mid-size meant warm and fuzzy and comfortable – hours are rising toward the mega firms because of their decision (forced or voluntary) to match compensation, and their well-founded fear that they will be cherry-picked of good partners by mega firms who can pay more. Blame Adam Smith, Bob Gunderson, or Tower Snow. We all know that young associates work hard in the nation’s leading firms. They always have and they always will. It is part of the ‘deal.’ You earn your stripes, get your experience, and tack some prestige points to your resume, all while earning a high income. In exchange, the firm expects you to work hard, deal with unexpected changes in schedules, handle enormous pressure, and serve every conceivable need of the firm and its clients. Yes some lawyers still under-bill, far more over-bill (and no one wants to admit the latter because it is a road with an off ramp sign reading “surrender license here”).

Hours-driven bonus systems impact the delegation and distribution of work. The bottom line for students is that in what many fear is a Dickensian world, average associate hours are around 1,975 a year – even though the grapevine would have you assume that hours are 300-500 higher. In the same firms, the average client hours for equity partners will probably be 1,900 plus an average of 300 hours for marketing, administration, client development, recruiting etc.

Associates who bill 2,500 hours or more fall into one or more of the following categories:

  • Those who have the trial / deal from hell that last many months and clock 300 hours plus a month for 5 months can coast the rest of the year and hit 2,500. It happens often at firms who have giga deals and bet-the-company litigation.
  • Some actually enjoy the hours, do the work voluntarily, don’t brag about it and have found a comfort zone in life – their own private Idaho of satisfaction. The number of lawyers working 2,500 + hours a year is far fewer than most assume – it is just the natural human tendency to repeat, gloss, inflate and exaggerate a bit here and there – just an adult version of the child’s game of telephone played with IM rather than with a can and a string.
  • Some relentlessly and voluntarily chase the compensation rabbit and define identity / self worth / sex appeal by how many hours they bill. They are the extreme gunners from law school. This breed often self selects into the most profitable and most demanding firms with most repeated names.
  • Some regrettably pad, shade, inflate hours because of the perverse incentives in the system (just as some service partners hoard work to keep the management committee at bay). When the compensation model of a law firm is tied hours billed, inefficiencies are rewarded. That is not to say that it is impossible for an associate to ethically and truthfully bill 2,500 hours per year without padding; it just doesn’t happen very often.

There are other factors as well that impact the overall averages.

  • Some areas are hot and busy (litigation IP and bankruptcy) and some areas are slow (non corp transactional)
  • Partner work hoarding in slow areas which further depresses associate hours
    The highest hours belong to those in the hunt for partner or headed in that direction
    Some lawyers with low hours in busy areas are not getting work for reasons which are valid
  • Some lawyers with low hours have checked out and are looking for a job with or without the firm’s knowledge
  • Work distribution is inefficient – and the best and the busiest get more and those who are not often get less – although this can be a self fulfilling prophecy which damages those who are not ‘in favor.’

While students and associates have their concerns about hours, so do partners. The survival and prosperity of a partner depends on billings, chargeable hours, true expertise in an area that is valuable to the firm and its clients, and working relationships with more senior partners who view the partner as someone who contributes to the firm (or politicking). Some of these factors can be measured – others are soft and amorphous. Partners are assumed to already have the full basket of lawyerly skills – written and oral communication, client serve, raw legal ability and all the rest. Many partners without billings or ‘protectors’ believe survival requires working enough chargeable hours to satisfy the firm. This subtle subconscious pressure can cause a tendency to hoard work better done by more junior lawyers at a lower rate, to under delegate, to over work matters, or to inflate time.

Generally speaking, the partners with the higher amounts of business tend to have far higher business development time and somewhat lower client time (though not as low as you might suspect). One disturbing anomaly is that partners in their late 30’s through mid 40’s, who should be focusing on business development, seem less likely to spend time doing that – for whatever reason they will fill their plate with chargeable matters. But this has been true for a long time – because partners often don’t realize the need to learn to cook and grow crops until their plate is taken away from them.

See more from Lateral Link: 5 Steps to a Convincing Resume

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Contact Katy Lewis at Lateral Link if you want to learn more.