Biglaw, Billable Hours

The Sad Truth One Stat Reveals About The Legal Industry

The only good associate is a billing one.

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better be billingSometimes you hear a random factoid that just kind of sticks with you. Something about the way the fact is framed or the texture it (perhaps, inadvertently) provides makes it resonate. Such was the case of one statistic I heard during the Legal Marketing Association’s annual meeting this week in Austin, TX. In a breakout session, led by Bill Josten of Thomson Reuters Westlaw, designed to help marketing and business development professionals translate their message into “lawyer speak,” he dropped this bomb:

Only 49% of law firms are teaching their attorneys how to talk to clients about pricing.

… which means more than half of firms aren’t talking about it. Taken from the Altman Weil 2014 Law Firms in Transition survey, Josten agrees this is a disturbing stat that demonstrates how slow to change law firms are. And it tells us a few important truths about the future of the legal industry.

First of all, this is why alternate fee agreements are here to stay, and the firms that are best able to respond to this market reality will be the most successful in the future. If clients are unable to talk with the lawyers they work with on a day-to-day basis about their bills, they will never buy into the value proposition of traditional hourly billing. We know that firms are under pressure to develop new billing models, and cutting off the majority of people who are actually doing the billing from that conversation seems counterproductive.

It also begs the question: Why aren’t firms teaching or at least talking about this? There are a couple of theories. One is the black box syndrome. Plenty of firms get their rocks off by keeping secrets, and sure, being tight-lipped when it comes to client confidences is paramount, but the inner workings of the firm that associates work for are often hidden from them. Which never seems to benefit the associates with boots on the ground. Quick question for all the associates reading this: do you know what rate your firm bills you out at? Do you know how many of your hours have been written off by a partner eager to appease a client? At the LMA session, Josten explained that this lack of transparency can really hurt your chances when trying to get promoted.

Perhaps firms are afraid the secret (billing) sauce will get out when attorneys leave the firm. Biglaw is based on a model of churning through associates, no matter how big the summer class is; by the time the eighth year rolls around, there aren’t more than a handful still around. So it may make sense they don’t want their pricing information going to competitors with each lateral move, but what this really shows is how dispensable associates are to their firm. Sure, they’ll gladly take those 2400 hours you’ve billed (what were you going to do with them anyway, live your life?), but they don’t trust you. You are a cog there to finance someone else’s vacation home, and this opacity is just another example of that fact.

The other issue with law firms not teaching associates about billing: firms, and Biglaw in particular, aren’t great about teaching much of anything. If it isn’t in the form of a redline, don’t expect to get much feedback from a partner. Older associates may take pity on a n00b and explain how something is done, but often times they’ll just take on the task themselves and finish in half the time. Some law firm vets probably aren’t even surprised by this fact; it is, after all, just more of the same.

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Firms must just think that associates are not worth training on firm pricing. First-year associates aren’t usually alone in a room with a client, so why bother trying to teach them anything about the business of law? It is this cynical perspective that associates, particularly naïve ones just starting off their careers, need to be aware of, before it bites them in the behind. Rather than invest in their attorneys, firms have walled off pricing, increasingly creating a specialized department and positions to fill the role.

As much as the knowledge may be valuable to the ultimate career trajectory of an individual associate, from the firm’s perspective (one that keeps PPP in the forefront of everything it does), every minute an associate spends learning about the underlying superstructure of the law firm model is one they aren’t billing.

The only good associate is a billing one.

Kathryn Rubino is an editor at Above the Law. Feel free to email her with any tips, questions, or comments. Follow her on Twitter (@Kathryn1).

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