But a few do, and they think they’re being clever.
A cheating contract lawyer reads a novel all day, codes a couple hundred documents as “non-responsive” at ten to five, and then heads home.
Cheating junior associates record a few hours that they didn’t actually work. They assuage their guilt: “I’m more efficient than other people are, so I did this more quickly than the average guy. It’s not cheating if I write down how long it should really take to do this job.” And then the cheating associates mysteriously hit their billable-hour targets for the year.
Cheating junior partners are different. Short on work but desperate to bill time, these junior partners hoard work that they should naturally pass down to associates: “I have some free time, and I’m a very talented guy. I’ll write the brief more quickly than an associate would, anyway. I’ll just do it myself, and then I won’t have to worry about being held out of the equity ranks because I haven’t worked hard enough this year.”
I was instructed to take voluminous fax documents from boards, count the pages, estimate how long it would take him to read had he done so, and charge a pro-rata share of $375 an hour, which greatly increased his revenue. He billed my time at $150 an hour while he paid me only $15 an hour. This and other shenanigans artificially pumped up his billing from $150,000 to well over $395,000 for one [homeowner association] case, made up of nonexistent time he claimed he spent researching the client’s case.
– Anonymous law clerk who wrote the Los Angeles Times to ask if he should report his boss’s shady billing practices. The boss also fittingly makes a point of billing clients for the time they exhaust complaining to him about his bills.
This is not a column about getting bloated Biglaw partners into running shape, as much as many of them need the exercise. Instead, let’s focus on another 10K milestone, one that Biglaw associates chase after, spurred on by a number of incentives, ranging from a simple desire to keep their hard-earned jobs to the burning ambition necessary to even aim for partnership: reaching 10,000 billable hours.
In the popular conception, 10,000 hours of practice at any skill is a critical hurdle to achieving mastery. It does not work that way for lawyers, especially those that start out in Biglaw.
As anyone who has started their career in Biglaw knows, the early years are more about survival than anything else. The most critical skill is adaptability, both in terms of being able to handle the lifestyle stresses presented by the Biglaw junior associate experience, and recognizing just how little law school has prepared one for Biglaw legal practice. In fact, I would say that for purposes of tracking personal progress towards the 10K mark, the first year of Biglaw practice (and maybe two or three depending on whether one is in a firm that “rotates” their juniors to expose them to different practices areas) should be thrown out. Consider that time as the foundation that allows for future productive lawyering if it makes you feel better. And first-years would do well to disabuse themselves of the notion that they will be “contributing” or doing “quality” work. Obviously they need to do their best, and perform up to Biglaw standards, but the hard truth is that the first-year in Biglaw is there to force high-flying and well-credentialed aspiring lawyers to humbly confront two uncomfortable questions. First, do you even want to be doing this? And second, even if you want to, are you good enough?
While the benefits of flat-fee billing, including cost certainty, increased efficiency, and administrative simplicity are well documented, there’s not much guidance on how lawyers can implement fixed fees in practice. As a result, many lawyers shy away from fixed-fee billing, fearing that if they charge too little, they’ll be stuck working for free if the case winds up taking more time to resolve than originally anticipated. Meanwhile, many lawyers who experiment with fixed-fee billing claim that it doesn’t work — largely because they haven’t implemented it in a way that benefits the lawyer as well as the client.
So below are a half-dozen tips to help solo and small-firm lawyers implement fixed-fee billing without paying the price. Though not exhaustive, these suggestions may help lawyers currently contemplating fixed-fee billing get started, or convince those who’ve tried flat fees unsuccessfully to reconsider…
If you are a solo or small firm who is looking to work with startup companies, you have probably been asked to take equity in lieu of compensation or to set up a deferred payment plan. When you are talking to companies who sound like they may be doing the next big thing, you may believe you are taking an educated gamble.
Yet, when you turn to the economics of being a solo or small firm, the numbers often do not pan out…
* “[T]he one thing Windsor does not do is clearly establish a nationalized definition of marriage.” No one will be surprised when the same-sex marriage cases wind up before the Supreme Court. [National Law Journal]
* Law firm mergers continue to hum along at a record pace, but whether they’ll actually work out is another question entirely. Only time will tell if we’ll see another “spectacular flameout.” [Wall Street Journal (sub. req.)]
* “The billable hour’s day has passed.” Eighty percent of law firm leaders believe hourly billing may soon be going the way of the dodo in favor of alternative billing arrangements. [Capital Business / Washington Post]
* Despite its anti-gay policies, Trinity Western University Law has been granted approval from the Law Society of British Columbia to open its doors. And here we thought Canadians were supposed to be polite. [GlobalPost]
* If you want to take an “Law and _____” class, sign up for Law and Traumatic Brain Injuries at GW Law. Having a TBI yourself seems like a requirement for enrollment, but shockingly, it’s not. [New York Times]
* Times are so rough that God can’t even get a credit card. Instead of casting plagues upon the earth, he’s suing Equifax — though we’re sure he wouldn’t mind if the credit agency reps caught lice. [New York Post]
As we noted in Morning Docket, there’s a new survey out about corporate America’s legal spending in 2013. As noted by Am Law Daily, the LegalView Index “is based on actual dollars paid by clients, not on surveys of law firms” — so perhaps it’s more reliable than many of the other studies.
What does the survey say? Here are some highlights:
* Demand is down, but fees are up. The good news is that Am Law Second Hundred firms saw gains in billable hours purchased by corporate clients — and that’s about it for the good news. [Am Law Daily]
* OMG, Dewey want to see the unsealed case records against D&L’s ex-leaders. DA Cy Vance wants our prying eyes to see all but one document. Secret seven identities… incoming! [Bloomberg]
* It looks like that time Sheryl Sandberg refused to lean in is really paying off in court. Facebook is a witness, not a defendant, in an antitrust case about non-poaching agreements between tech giants. [Reuters]
* Gaming the rankings for dummies? Law school deans are now pushing the ABA to require that law schools post their transfer students’ LSAT and GPA credentials. [Capital Business / Washington Post]
* The easy way to decide whether you should be working in law school is to determine what you like more: money or grades. One will help you get the other later in life. [Law Admissions Lowdown / U.S. News]
Growing up in Biglaw, I always thought pricing services for clients was easy. Conversations with clients went as follows: “Our rates range from X to Y, and are very competitive with our peer firms. If you have the audacity to ask for a break on these prices, we can offer you a 10% ‘courtesy discount,’ but will include language in our engagement letter allowing us to recoup that discount and more a few months into the engagement.” Of course, even in the mid-2000s (crazy that those days are nearly a decade ago), X was roughly the monthly lease payment on a well-equipped Honda Accord — for the least “experienced” lawyer in the entire firm — and Y was in the range approaching the monthly mortgage payment for a decent-sized colonial in a “pleasant” suburb. That was how things were priced, and depending on your firm, your rates were either considered cheap or expensive. But that categorization was always relative to other firms in your city, with a usually self-selected “peer group.” So there was always a “premium” (but unnecessary) firm more expensive, and on the other end of the pricing spectrum, a “discount shop” that could be sneered at for trying to undercut the market with low prices aimed at masking subpar legal ability.
When there was a surplus of demand for Biglaw’s services, the above approach was a tenable one. Once that surplus turned into a surfeit, firms needed to get a little more creative. At first, the tendency was to simply offer bigger discounts, with the “courtesy 10% off” turning into 25% off or more. Then clients started informing their firms of new “billing guidelines” where certain types of work would no longer be billable. Or where certain lawyers, such as junior associates whose time would no longer be paid for by clients, were magically transformed from revenue-producers for the firms that hired them to deadweight cost center investments in the “firm’s future.” Add in competition from other firms for a shrinking pie of business, and thinking about pricing became more rigorous. In fact, pricing expertise is one of the only Biglaw job skills with a growing rather than shrinking potential employment base….
Average law school debt for graduates of private universities hovered around $122,000 last year. With only 57% of new attorneys actually obtaining real lawyer jobs, recent graduates have a lot to consider when it comes to managing their student loan payments. Thanks to our friends at SoFi, today’s infographic takes a look at student loan debt, including the possible benefits of refinancing for JDs…
Kinney Recruiting’sEvan Jowers is currently in Hong Kong for client meetings and still has a few slots available through October 22. Evan will also be in Hong Kong November 14 to December 15. Further, Robert Kinney has been in Frankfurt and Munich this week and is available for meetings with our Germany based readers.
One of our key law firm clients has referred us to one of their important clients in the US, Europe and China – a leading global technology supplier for the auto industry – in order to handle their search for a new Asia General Counsel and Asia Chief Compliance Officer.
Kinney is exclusively handling this in-house search.
This position will have a lot of responsibility and include supervision of eight attorneys underneath them in the Asia in-house team. The new hire will report directly to the global general counsel and global chief compliance officer, who is based in the US. The new hire’s ability to make judgement calls is going to be as important as their technical skill set background.
The position is based in Shanghai and will deal with the company’s operations all over Asia and also in India, including frequent acquisitions in the region.
It is expected that the new hire will come from a top US firm’s Shanghai, Beijing or Hong Kong offices, currently in a top flight corporate practice at the senior associate, counsel or partner level. Of course, the candidate can be currently in a relevant in-house role.
The JOBS Act created new tools for companies to publicly advertise securities deals online. As a result, thousands of new deals have hit the market and hundreds of millions in capital has been raised, spurring a wealth of new business development opportunities for attorneys.
Fund deals, startup capital raises, PIPE deals and loan syndicates are just a handful of the transactions benefiting from the JOBS Act. InvestorID FirmTM is a platform designed to help attorneys equip their clients with the workflow, marketing and compliance tools to publicly solicit a securities offering online. By providing clients with the tools to painlessly navigate the regulatory landscape of general solicitation, InvestorID FirmTM helps attorneys add value above just legal services.
The Jumpstart Our Business Startups Act (JOBS Act) went into effect in 2013 and permits Regulation D offerings of securities to be advertised publicly. This means that funds and companies can now use social media, emails and web sites to market transactions to new “accredited” investors.
However, with these new powers come new pain points. InvestorID FirmTM provides a secure, fully hosted, cloud-based platform with a breadth of tools for your clients, including: