Over the last two weeks, we have heard from an In-House Insider, an opinionated source of insight into Biglaw-client relations — see here, here, and below. As with the two prior installments, the only changes I made to the Insider’s words were those done to protect their identity, and Insider was given the opportunity to revise their points once I added the questions and commentary. Again, I thank Insider for the candid observations and thoughtful opinions on these core issues.
AP: How firms are viewed from a value perspective is often very difficult to gauge from the outside. What criteria do you use to determine if a firm is delivering services to your company appropriately from a billing perspective?
What does 2013 hold for the world of large law firms? Let’s look into our crystal ball.
Actually, scratch that. Making predictions is a tricky business. Sometimes we’re right — like when we predicted robust bonuses out of Cravath, based on their large partner class — but sometimes we’re wrong.
For now, let’s keep our powder dry, and instead check out historical data about hours, billing rates, and corporate legal spending. Can we gain any insight into the future by looking back over the past?
Now that bonuses, year-end collections, and holiday parties are behind us, it is helpful to remind ourselves (early on in the new year) that it is (paying) clients that make everything possible for Biglaw firms. A few months ago, I was the fortunate recipient of some illuminating correspondence from a Biglaw refugee turned in-house counsel, offering a “customer’s” take on what is both right and wrong with the “current law firm service delivery model.” Because I truly believe in the importance of this column offering an anonymous outlet for informed discussion of Biglaw-related topics (see my posts detailing my conversations with OldSchoolPartner and Jeffrey Lowe), I offered to make my correspondent the resident In-House Insider.
Agreement was not long in coming, together with yet more astute observations about Biglaw. For our initial “discussion,” I have (similarly to how I handled the Lowe interview) added questions and some brief commentary to our Insider’s points, and share this written interview with you. The only changes I made to the Insider’s words were related to their identity, and the Insider was given the opportunity to revise their responses once I added the questions and commentary. I hope we can continue to benefit from this In-House Insider’s perspective in the future. For now, I definitely appreciate when I get contacted by Biglaw-related personalities looking to discuss the issues raised in my column, and share their thoughts with this audience. Without further ado….
* According to the Second Circuit, the long arm of the law doesn’t extend to the middle finger. You can’t just go around arresting dudes for flipping you the bird. [U.S. Second Circuit / FindLaw]
* President Obama jetted off to Hawaii before he could sign the fiscal cliff bill, so he ordered it be signed by autopen. Of course, people are losing their minds over it. [Volokh Conspiracy]
* Should we scrap the Constitution? Georgetown Law professor Louis Seidman continues to advocate for constitutional disobedience in this epic ConLaw throwdown. [HuffPost Live]
* Don’t celebrate your increase in California bar passage points yet. The state bar changed its tune, and a 40% pass rate is the new standard. That shouldn’t be hard, eh TJSL? [California Bar Journal]
* One of our former columnists, Jay Shepherd, has a great way to calculate what your actual hourly rate should be, if you don’t mind working for just pennies a day. Most lawyers would mind. [jayshep]
* For the love of God, even Gawker knows that going to law school these days is a fool’s errand, or in their own words: “IT’S A SUCKER’S BET. A CLEAR SUCKER’S BET.” Come on, stop being suckers. [Gawker]
* If you’d like to hear Dean Lawrence Mitchell of NYT op-ed fame sound off on why there isn’t a lawyer oversupply problem, and why it isn’t his job to get law students jobs, we’ve got a video for you to watch….
The year 2012 draws to a close under decidedly moribund circumstances. It’s hard to feel a lot of holiday cheer when kids are shot to death at school and the response from nearly half the country is “I better buy some more guns.”
Still, time waits for no one, and as we approach the end of the year, “time” is always on the minds of Biglaw lawyers. How much time did you bill, and how much of that billed time can you collect? The billable hour retains its potency because it is an objective, even if imperfect, measure of a lawyer’s yearly productivity. And the annual reckoning is at hand.
The client always has more leverage but certainly, for the high-end work, the firm is calling the shots.
– Kent Zimmermann, a consultant with Zeughauser Group, commenting on the premium hourly fees charged by Biglaw attorneys in sought-after practice areas like mergers and acquisitions, corporate finance and securities, white-collar defense, and litigation.
(That’s interesting, but what were the highest and lowest rates for partners and associates in 2012? We’ve got that info, and more, after the jump.)
But enough of that. Let’s hear from the managing partner of our law firm:
Ah! Orlando in March! What a fine time and place for our annual firmwide retreat.
I want to welcome everyone to this magnificent resort, and I want to take this opportunity to say a few words about a subject that’s dear to our hearts: Billing time.
To paraphrase Sir Thomas More in “A Man For All Seasons“: “When a man [fills out his timesheets,] he is holding his own soul in his hands like water; and if he should open his fingers then — he needn’t ever hope to find himself again.”
For the junior associates in the crowd, consider this: You will, at some point, have a slow month. You’ll get nervous that the firm will punish you for not having billed enough hours. To protect yourself, you’ll be tempted to borrow from the future. You’ll think that, if you add just four hours to this month’s time, you’ll have hit your billing target. If you charge those four hours to your largest client, no one will notice that you’ve slightly padded the bill. And you’ll figure that you’ll make this up to the client in some future month; you’ll work four hours some Saturday morning that you won’t write down, so the client will come out even in the long run. “That’s not really fraud,” you’ll think, so you’ll have eased your conscience. . . .
During the decades that I worked in Biglaw, I occasionally felt put upon by clients.
“You won’t pay for travel time? Why not? I’m not flying to Philadelphia for my health. And I’m sure not on vacation. If you want me to travel to Philadelphia, then you pay for the time I kill making the trip.”
But many clients felt very differently about it.
“If you’re doing productive work on my matter, then I’ll pay. If you’re flying around the country reading a novel, then I won’t pay. You surely don’t expect us to pay for time that you choose to make unproductive?”
[Or, in some situations: "If you want to handle a matter that's based in Philadelphia, then you eat the time (and travel costs) of getting there. If that's not acceptable to you, then we'll hire a Philadelphia firm. Do you want the matter?"]
These discussions strike me as fair fights. There are things that law firms plainly should not charge clients for, things they plainly should, and the middle ground, where fights are arguably fair. Today, I’m walking the middle ground . . . .
* Speaking on the condition of anonymity, one Supreme Court justice thinks that things will be back to normal at One First Street come the start of the next term, despite his colleagues’ loose lips. [National Law Journal]
* Hourly billing rates for associate are on the rise nationwide, while partner and counsel billing rates only saw modest bumps. Is Biglaw back in business, or is this just another “retention strategy”? [New York Law Journal]
* This is a really hard to believe newspaper headline: “Law firm recognizes employees have life outside of work.” Carlton Fields, what kind of gypsy voodoo magic spells are you casting? [South Florida Sun-Sentinel]
* Another day, another editorial about the “irretrievably broken” state of legal education in our country. But the ABA admins needn’t worry their oblivious little heads, because people will keep applying. [New York Times]
* And in today’s disturbing law school debtor news, Jason Bohn’s charge was upgraded to first-degree murder after a DA announced via indictment that Bohn allegedly intended to torture his victim. [New York Post]
* “Quite frankly, these are the actions of a dirty old man.” You can look, but never lick: it’s not really a good thing when a judge uses a sentence like this to describe an attorney’s alleged client relations skills. [CBS News]
* For it’s one, two, three strikes you’re out at the old ball fraud game. Lenny Dykstra pleaded guilty to bankruptcy fraud among a potpourri of other felony counts, and he’ll now face up to 20 years in prison. [CNN]
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?
Ms. JD is hosting their 2nd annual cocktail benefit to raise money for the Global Education Fund. The event will be held on August 21, 2014 at 111 Minna in San Francisco. Our goal is to raise $20,000 to fund the legal educations of four dedicated law students in Uganda who count on our support to continue their studies at Makerere University during the 2014-15 academic year.
The Global Education Fund enable womens in developing countries to pursue legal educations who otherwise would not have access to further education. According to the World Bank, investment in education for girls has one of the highest rates of return to promote development. In Uganda, more than 45% of women over the age of 25 have no schooling at all, and men are more than twice as likely as women to have access to higher education. Together, we can work to end educational inequality. For more information about the program, please visit http://ms-jd.org/programs/global-education-fund/
Ed. note: The Asia Chronicles column is authored by Kinney Recruiting. Kinney has made more placements of U.S. associates, counsels and partners in Asia than any other recruiting firm in each of the past seven years. You can reach them by email: email@example.com.
We at Kinney Asia have made a number of FCPA / White Collar US associate placements in Hong Kong / China thus far in 2014. Most of such placements have been commercial litigation associates from major US markets, fluent in Mandarin, switching to FCPA / White Collar litigation. Some have already had FCPA experience, but those are difficult candidates for firms to find (this will change in coming years as US firms are now promoting FCPA / White Collar to their 2L summers who are fluent in Mandarin and have an interest in transferring to China at some point).
Legal Week quoted Kinney’s Head of Asia, Evan Jowers, extensively in the following relevant article here.
There is a new trend in the market, though, where mid-level transactional US associates, fluent in spoken Mandarin and written Chinese, are interviewing for and in some cases landing junior FCPA / White Collar spots in Hong Kong / China at very top tier US firms.
When the LexisNexis Cloud Technology Survey results were reported earlier this year, it showed that attorneys were starting to peer less skeptically into the future, and slowly but surely leaning more toward all the benefits the law cloud has to offer.
Because let’s face it, plenty of attorneys are perhaps a bit too comfortable with their “system” of practice management, which may or may not include neon highlighters, sticky notes, dog-eared file folders, and a word processing program that was last updated when the term “raise the roof” was still de rigueur.