While some law firms initiate layoffs, others take cost-cutting moves to respond to the “The Little Recession That Couldn’t,” the ongoing economic jitters unsupported by any data, but living rent free in the minds of the Federal Reserve. While undoubtedly preferable to a layoff, belt tightening while equity partners cash in on seven-figure payouts can tarnish a firm’s reputation longer than any short-term decline in deal activity.
These firms will have to reenter the hiring market some day. Protecting their brand as an employer is ultimately more important than saving a couple grand today.
Paul Hastings just curbed the number of hours associates may count toward their 2000-hour annual billing requirement. While historically unlimited, associates may now only count “up to 100 hours” of pro bono toward meeting hours and, by extension, remaining in the firm’s good graces come bonus time (though any requests to increase this amount may be granted with advance approval).
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Guaranteeing that no fully compensated associate brings in less than 1900 hours’ worth of paying work ensures some modest gain to the firm’s bottom line, but is this juice worth the squeeze? Are there an overwhelming mass of associates loading up on 500 or 600 hours of pro bono work every year to meet the 2000-hour threshold? Most associates probably aren’t coming close to the 100-hour mark, let alone exceeding it. This rule only matters to the slice of associates who bill an extraordinary amount to pro bono and fall below 1900 in paying work and it strains credulity that the firm is losing a significant amount from that fraction of attorneys.
And in many firms, pro bono work is available because some cause is a passion project for a partner. If a rainmaker wants to keep a junior busy for 150 hours on volunteer work, that seems like a matter between the partners and not the associate’s problem.
While pro bono hours don’t cost the firm all that much, they make much more off the work in the form of recruiting good will. As a tipster notes, “the unlimited hours was always part of their pitch for recruiting.” And it’s a powerful talent lure because an associate interested in throwing themselves into a volunteer project tends to be an associate with a high degree of self-motivation. Coupled with the experiential training that pro bono work provides — because firms give younger attorneys more responsibility on matters where they don’t feel pressure to show value to the client in the form of personal partner work — pro bono is a relatively cheap way to get top talent.
Associates are absolutely floored by this decision and wonder how the firm can stand by its stated commitment to pro bono when associates are only going to be recognized for pro bono efforts that do not exceed 5% of their annual contributions.
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Though worse than cutting back the pro bono benefit is how the firm spread the news.
I said “announced” because they sent an email generically saying the firm’s bonus policy can be found in the employee handbook, and only when you went to the handbook did you see the change. Associates are not happy.
“You can’t get paid anymore for the work we’ve always told you that you could get paid for doing” is not the place where you want to hide the ball. Beyond whether or not it’s a good idea, this is where you’ve got to be upfront.
Joe Patrice is a senior editor at Above the Law and co-host of Thinking Like A Lawyer. Feel free to email any tips, questions, or comments. Follow him on Twitter if you’re interested in law, politics, and a healthy dose of college sports news. Joe also serves as a Managing Director at RPN Executive Search.