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.
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…
Over the last few years, the legal market has changed dramatically. We live in a buyer’s market in which the clients hold the upper hand and can demand financial concessions from their attorneys that go beyond lower hourly rates.
This good news for clients might sound like bad news for lawyers. If lawyers can’t charge as much, they likely won’t make as much. But although greater price competition might lower revenue for some firms, it surely presents an opportunity for others. Small law firms often compete with bigger firms on price, and increased client sensitivity to legal fees can be a marketing boon to firms that can undercut their competition (with the familiar caveat, of course, that the smaller firm must be able to provide the resources and quality required by the particular matter).
The changing market invites, if not demands, lawyers to offer concessions for clients. Happily, many of the concessions have relatively little impact on the firm’s bottom line, but can garner significant goodwill with clients. For example….
Years ago, I handled a pro bono case for a client unable to afford legal services. (I actually handled a fair number of pro bono cases, but I’m choosing to describe just one here.) The client was a very nice guy, and he desperately needed legal services. But he had no idea how to use a lawyer cost-effectively and, because he wasn’t paying for my services, he had no incentive to restrain himself. The guy called incessantly, asked endless questions, and was always trying to schedule meetings with me. I mentioned the situation to one of my senior colleagues, and the colleague’s reaction was immediate: “What that client needs is a bill.”
During the decades when I served as outside counsel representing clients, I noticed that some of my clients permitted me to do their work efficiently and others affirmatively obstructed that effort. Now that I’m an in-house lawyer, I’m thinking about the other side of that coin: What should I, in my role as client, do to permit outside counsel to represent me efficiently?
Last week, we asked you to report on how many hours you were on track to bill in 2011. Well, the results are in, and damn, people out there in Biglaw have been working like dogs.
I hope there is a big bonus payoff for all the hours people have been billing.
I also hope that people are still finding time to live their life. One commenter disturbingly said, “I’m currently at 2650 for the year. I was hoping to get to 3000 by year-end, although it will be a stretch.”
I think that this commenter is bragging that he’s on pace to kill himself. But all around Biglaw, people are putting in time…
* With yesterday’s decision from Pennsylvania, the game is now tied for Obamacare at the federal district court level. Come on, SCOTUS, just grant someone certiorari already. [Bloomberg]
* Keep this in mind if you’re applying to law school this year: if you’re white, it ain’t aight. Who knew that there could be “anti-white bias” in a place where everyone’s white, like Wisconsin? [National Law Journal]
When I was in private practice, clients said that they instituted e-billing for reasons of efficiency: “We can process bills and pay you faster if you submit bills electronically. E-billing speeds the process for both of us.”
I knew that bills that we submitted electronically underwent some kind of review. It always felt as though it was review by chimpanzee, as clients seemingly whacked hours randomly, leaving us with the hard choice whether to remain silent or quibble about a few bucks here and a few bucks there. But fundamentally I accepted the basic proposition that e-billing improved efficiency.
Now I know better….
(Actually, I don’t really know much better. I added a provocative sentence followed by an ellipsis so that Lat would know precisely where to put the break for the “continue reading” icon when he loads this post into the ATL blogging software.)
Egad! The General Counsel just announced that your target for next year will be to handle 20 percent of all outside legal spend on an alternative fee basis! What do you do?
You can’t just do flat fee agreements! What happens if you agree to pay too much, and you’ve given away your client’s money? And success-based fees are a great idea, but they’re impossible to calculate! How does anyone know at the start of a piece of (non-routine) litigation what the case is worth? Since you don’t know the value of the matter, you can’t set the target from which you’ll judge success.
What’s an in-house lawyer to do?
Calm down. Here’s a way to ease into alternative fee agreements that will put neither you nor your outside firms at risk, will educate you slowly over time, and will meet your internal objectives….
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….
A college graduate without student loan debt is akin to reading a kind quote about Kim Kardashian in a tabloid—it’s rare.
In the past eight years, student loan debt has nearly tripled to a whopping $1.1 trillion, and in the past 10 years, the percentage of 25-year-olds with such debt has risen from 25% to 43%
It’s gotten so bad, in fact, that New York Fed economists warned last month that the burden of student debt could stilt consumer spending by twentysomethings, as well as further hamper the recovery of the housing market and economy.
To get a better idea of what massive student loan debt (we’re talking over $100,000 massive) looks like, we talked to an attorney who graduated with a large student loan debt. We also consulted LearnVest Planning Services CFP® Katie Brewer to see just how their repayment plans stack up.
S. Fischer, 36, Attorney Graduated: 2001
How Much I Borrowed: $100,000
What I Still Owe: $45,000
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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 six years. You can reach them by email: firstname.lastname@example.org.
Deal flow has clearly picked recently up for most US associates, counsels and partners in Hong Kong/China and Singapore. We are on the phone with a lot of these folks on a daily basis, many of whom we have known for years. Further, the head of our Asia team, Evan Jowers, and Kinney’s founder and president, Robert Kinney, frequently meet in person with leading US partners in Asia to assess their needs and keep on top of the inside scoop at as many firms as possible. The need for legal recruiting help in Asia from experienced recruiters appears to be live and well. In March, Evan and Robert were in Beijing at such meetings, in April, Evan was in Hong Kong, and for half of June Evan will be in Shanghai and Hong Kong. Thus its pretty easy for us to tell when there has been an across-the-market pick up in capital markets and corporate work.
On an average day in Asia when Evan and Robert visit firms, they typically have 5 to 9 meetings a day, mostly with US partners in the market. The reason they have these meetings is not simply because Kinney makes a lot of US attorney placements in Asia and that a particular firm may have openings; instead these are just visits with friends. After years of working together as business partners, the folks at Kinney are actually these peoples’ friends. The firms Kinney work closely with in Asia (which is just about every law firm – call us if you want to know the one firm in the world we will never place anyone with again, ever, and why) look forward to the visits, or at least act like they do. After seven years in the market, many of the client partners are former associate candidates. Also, these US partners see Kinney as a very good source of market information as well, because they know how deep their contacts are in the market and how frequently they are speaking to counterparts at peer firms.
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