Overbilling

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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From Biglaw to Boutique: A Moment of Truth

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Tom Wallerstein

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….

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Inside Straight: Inflating Your Own Outside Legal Spend

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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?

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The Hours Results: Y’All Been Working Really Hard

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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…

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The Hours Open Thread: How Are Your 2011 Billables?

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We’re doing this a little bit late this year. We’re into the fourth quarter and we haven’t yet asked you guys: how many hours are you on track to bill this year?

It’s an important question.

Remember firm leadership has already started trying to manage expectations about 2011 bonuses.

And between the natural inclination to keep as much money as possible and prudent concerns over a double-dip recession, many firms will want to hold the line on associate bonuses.

But that’s going to be harder to do if people have been busting their tails…

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Morning Docket: 09.14.11

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* 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]

* Mark McCombs, the ex-Greenberg Traurig partner who overbilled for prestige, was sentenced to six years. Not a good way to thank your town for naming a street after you. [Am Law Daily]

* An Indian restaurant is accused of forcing Indian customers to give 18% tips. Here’s a tip: don’t punch customers in the face, and maybe they’ll give you a tip on their own. [New York Daily News]

* No soup (or supplements) for you! Curtis Allgier, a Utah prisoner awaiting his murder trial, wants seconds during dinner so he can get back to his fighting killing weight. [Boston Globe]

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Inside Straight: The Truth Behind E-Billing

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I’m an idiot. I really am.

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.)

Where was I?

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Inside Straight: Alternative Fee Agreements For Beginners

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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….

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Lawyer of the Day: Suing a Client for Nonpayment of Fees — and Ending Up Owing the Client Money

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Glenn C. Lewis: he's a billable-hour machine.

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….

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