Billable Hours

Morning Docket: 07.10.12

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* Dewey know how many professional firms have been allowed to stay on as advisers for the largest law firm bankruptcy in U.S. history? Six out of nine firms were permitted to continue services, but Proskauer wasn’t one of them. [Am Law Daily (sub. req.)]

* In other defunct firm news, Al Togut will be presenting Dewey & LeBoeuf’s former partners with a proposed settlement on Wednesday. You’ve been warned: prepare yourselves for some Biglaw-style bitching. [Thomson Reuters News & Insight]

* Despite reports of the billable hour going the way of the dodo bird, it looks like they’re here to stay. Right now, corporate law departments are still much more excited about alternative billing arrangements than law firms. [WSJ Law Blog]

* Judge Sam Sparks, the King of Benchslaps, dismissed Lance Armstrong’s lawsuit against the USADA in record time. That ruling came too quickly — guess it’s time to investigate judicial doping. [New York Times]

* Marc Dreier’s son, Spencer Dreier, is representing himself pro se in a defamation suit against his former college roommate. Looks like Daddy couldn’t spring for his kid’s lawyer while he was in the clink. [Bloomberg]

* A California woman claims that the Food and Drug Administration’s methods regarding sperm donations are unconstitutional. Why should she have to go to an intermediary to get sperminated? [Huffington Post]

* Do you smell what The Rock is cooking? It’s not exactly something to be proud of. Actor Dwayne Johnson is listed as a “co-conspirator” in a $1.8M fraud lawsuit that’s been filed by a South Florida family. [NBC Miami]

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Non-Sequiturs: 06.20.12

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* Hyper-competitive weekend warrior kills himself racing down a mountain path and his family is suing the internet start-up that makes an app that allows you to track your time against other users. Is anybody making an app to track really stupid lawsuits filed by bereaved family members who receive terrible legal advice during times of crisis? [Not-So Private Parts / Forbes]

* The Fast and the Furious Legal Edition: Executive of Privilege. [WSJ Law Blog]

* Bringing the billable hour to social media seems likely to make me cry. [Legal Cheek]

* Former SCOTUS clerks think the individual mandate is done for. [Wonkblog / Washington Post]

* Google threatens to bring the hammer down on YouTube to mp3 converter. [Torrent Freak]

* Maybe this is the kind of alcohol you can buy with prestige points. [Urban Daddy]

* The companies who will own the president if Romney wins. [USAToday]

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Size Matters: Billing Sucks, But Small-Firm Lawyers Need To Do It Better

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In my humble opinion, there is nothing worse than billing time. Just think of the feeling you get when you’ve spent a day doing a million random tasks in your sad beige office, and you have no ten-minute entries to account for that day (i.e., you get no credit for a day spent at work doing work things). Not only is billing a pain, the practice of accounting for your time is even worse. While I was no better at it when I was at my Biglaw firm than at the small firm, the former had some software that would send me mean emails if I did not get my hours in on time. Oh, and there were scarier partners that would come after if me if I had a delinquent time report.

At the small firm, on the other hand, I was instructed to fill out time entries by hand, give them to my assistant to type into a billing program, review the print-out of the hours inputted by my assistant, and then send them off to the partner to review and approve.

I was less efficient at billing at the small firm than at my Biglaw firm. Not only did I lose precious ten-minute increments working with my assistant to bill hours, but I also worked on a minimum of four matters, and switching between matters meant less efficiency. And I suppose there are other things people do at small firms that they cannot bill for — like go get business or something?

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From Biglaw to Boutique: You Are Not Your Hours

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Tom Wallerstein

Associates generally don’t have much room to negotiate salary or benefits in Biglaw. Beyond paying a premium for specialized skill sets (e.g., an engineering degree) or pedigree (e.g., a former Supreme Court clerk), those firms tend to pay a certain amount per class year with little variance among individuals. Among different Am Law 100 firms, there is relatively little variance. A few firms pay exceptionally well and a few others lag below market, but all the Am Law 100 firms have generally similar salary structures.

Not so with small firms, solo practices, and boutiques. According to the Robert Half Salary Guide, for example, the median starting salary for a first year associate at a ten-attorney firm in the San Francisco Bay area ranges between approximately $66,000 and $113,000 per year. That’s quite a spread. Of course, ten-attorney firms also vary so much from one to another that trying to compare salaries across firms often makes little sense.

Small firms thus have considerable flexibility in setting salaries, and associates have significantly more room to negotiate their salaries in the small firm environment. Granted, associates at small firms will tend to make less — sometimes significantly so — than their Biglaw counterparts. Be that as it may, valuing the worth of an associate to a small firm can be complicated.

Often, associates who are used to the Biglaw model both overvalue and undervalue their worth to a small firm or boutique….

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The Hours Results: A Return To Normalcy

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Last week, we asked our associate readers to tell us how their billable hours were shaping up in 2012 so far. The results are in, and partners and associates alike may be glad to learn that things seem pretty normal.

I mean, if you didn’t know that there hasn’t been a salary raise for five years, or that bonuses are now paid in Amex gift cards, you’d say that associate billables had achieved a happy balance.

Some people are working very hard, some people are slacking off, and most people are somewhere in the middle, keeping their heads down but not trying to be heroes…

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Associate Hours Open Thread: Did Your Puny Bonuses Result In A Work Slowdown?

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It’s June already. Can you believe it? Time sure flies when your wife is pregnant and you have just a few more months to completely reorganize your life into something resembling “serviceable.”

As we approach the midway point of the year, we figure it is a good time to check in on how our readers’ billable hours are looking. Given how low the Cravath bonuses were, and the fact that most firms decided to not pay spring bonuses, one would expect that associates in Biglaw have responded by working as little as possible. Nothing says “you did not share the wealth” like a few months of bare-minimum billing!

I’m joking, of course: associates couldn’t band together to organize a work slowdown any more than a herd of stray cats could go wildebeest hunting. In fact, one of the reasons firms can low-ball bonuses with impunity is because associates are more afraid about losing their jobs to the masses than they are about competing for the highest compensation.

We expect associates are still busting their tails in 2012. But let’s share some horror stories, and take a poll to confirm those suspicions…

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Morning Docket: 06.05.12

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QE's Kathleen Sullivan as Lawyer Barbie

* Dewey know the firms that have been tapped to represent the groups that this failed firm owes money to? Yes, we do! Brown Rudnick for the unsecured creditors’ committee, and Kasowitz Benson for the former D&L partners. [Am Law Daily (sub. req.)]

* The Ninth Circuit is supposed to be issuing an order today regarding an en banc reconsideration request on the Prop 8 case. They really ought to slap a big fat denial on that motherf’er and call it a day so we get some SCOTUS action. [Poliglot / Metro Weekly]

* Matthew Kluger, most recently of Wilson Sonsini, has been sentenced to 12 years in prison, which is the longest sentence that anyone’s ever received in an insider trading case. Uh yeah, he’ll be appealing. [Wall Street Journal (sub. req.)]

* Hughes Hubbard & Reed has billed more than $17M in the first four months of its work on MF Global’s unwinding. Will the firm will be handing out spring “special” bonuses like they did last year? [Reuters]

* Mattel is appealing MGA’s $310M copyright award, claiming that the judgment was based on “erroneous billing invoices.” Don’t you call my billable hours into question, Kathleen Sullivan. [National Law Journal]

* Jerry Sandusky’s accusers will be named in court thanks to this judge’s ruling. But don’t worry — there’s no tweeting, texting, or emailing allowed in his courtroom. Like that’ll make a difference. [Legal Intelligencer]

* Trust me, I’m a lawyer: a now-disbarred Colorado attorney managed to scam a convicted con artist out of more than $1 million. Now that’s some pretty sweet karmic intervention for you. [Missouri Lawyers Media]

* A bus driver is suing a hospital because he claims that instead of treating his painful erection, the staff watched a baseball game on TV. Whatever, that was a really great Yankees game. [Associated Press]

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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.

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