Every time I see an article related to billable hours at large law firms, I thank the younger version of myself who had the sense to start his own firm.
I remember my big firm days when, even though I worked until 8:00 pm and had an hour commute, I’d always take a file with me in order to bill just one more hour at home. Five extra hours per week would add around 250 hours to my annual tally, getting me that much closer to the official unofficial requirement of 2,100 billable hours per year.
Since starting my own firm, if I’m just not feeling it on any particular day, and there are no looming deadlines, I have no compunction against engaging in falderal all day, or just heading home. That would have been unthinkable in my big firm days, where every missed day made the future slog even sloggier. The single greatest aspect of having your own firm is that you are no longer a slave to the timesheet. You still need to bill to make money, but you are the one making the work/life determination, not someone with a spreadsheet.
Let’s have a little fun with numbers.
If my public education serves me, there are 365 days in a year. If you don’t work weekends, you are left with 261 working days. And let’s also give you a two week vacation, which knocks off another ten days (since we already deducted weekends). Are you going to take off any of the holidays? That will depend on your circumstances, including whether you want to spend time with your family. For this broad calculation, let’s just assume ten days off for holidays, personal days, jury duty or whatever. And finally, you’ll likely need a few sick days. Some private sector employees don’t take any sick leave (although 3-5 is average), while government employees use about ten. We’ll assume five days.
All told, assuming nothing else comes up, a typical associate has about 236 working days per year. To hit 2100 billable hours, the lawyer needs to bill a little less than nine hours per day. That doesn’t sound too bad, until you factor in realistic efficiency. In researching worker efficiency, I found studies concluding that an eight hour workday yields just three hours of productive time. (Picture the workers at Dunder Mifflin Paper Company.) In other studies professional occupations like accountants and attorneys fared better, with about five hours of productivity. One study even went as high as 85% efficiency. So even viewed through the rosiest of glasses, eight hours will at best yield 6.8 hours of billable time.
That was not my experience. Not because I got distracted (well, not only because I got distracted), but because the firm dictated many non-billable activities, such as summer recruiting interviews and lunches, department meetings, professional education, etc. Assuming I took a lunch, at least three hours per day was lost to non-billable activities. And in any event, who wants to be such an automaton that you keep your head down to produce at 85% efficiency like some drone, with no social interactions?
Given these factors, an associate needs to be at the office 12 to 15 hours to bill nine. To get eight hours of sleep, that associate needs to . . . never mind, there’s no way to make that work. I soon determined that I’d have to work weekends just to give myself an hour or so to decompress after work. The joke at the office was that the only way to tell whether it was a weekday or weekend was based on how all the employees were dressed. With my one hour round trip commute, I’d leave at 7:30 a.m., work from 8:00 a.m. to 8:00 p.m., and arrive back home at 8:30 p.m. (file in hand, to bill the aforesaid additional one hour of time). Thirty minutes for dinner, an hour of Hills Street Blues, an hour on the file, and off to bed. What a great life.
I’ll be lighting a candle to my younger self tonight.
The article catching my eye today was about the just wonderful benefits that firms are offering their highest billing associates. According to an article in Law.com, the Silicon Valley law firm of Fenwick & West announced a bonus match similar to those set by Baker McKenzie in late November, accompanied by additional perks for high-billers in the form of recreation dollars and lodging.
The incentives.
Newbies from the class of 2021 who hit benchmark numbers will receive a $20,000 bonus, and more seasoned associates from the class of 2015 will receive an impressive $115,000, according to an internal memo viewed by Law.com.
But wait, there’s more. Hit the next higher benchmark of 2100 hours, and the firm sweetens the bonuses with between $3,000 to $12,000. The firm also offers a condominium program, which provides associates who demonstrate “extraordinary institutional contributions” access to condos in Hawaii or St. Thomas, according to the article.
I am unfamiliar with Fenwick, so the following comment is not directed at that or any other firm. From my own experience, I have some suspicions about any attorney who claims to bill over 2,100 hours year after year. It’s certainly possible, but only at the expense of anything close to a real life, and/or by means of some creative billing. In my big firm days, I was pretty much working every conceivable hour, and yet during lunch (we were provided lunch in the firm cafeteria so we never had to leave the office – so thoughtful!) I would hear other associates discussing their vacations and long weekends; the same ones who always went home before me. They must have had one of those “time-turners” like the one Hermione used at Hogwarts, to give a day more than 24 hours.
But setting that reality aside, what does it say about a firm culture, when it wants to incentivize its associates to work such long hours? And is doing so in the best interests of the clients?
During my time at my first firm, they announced a contest for a free trip to Hawaii. It was sponsored by one of the online legal research services, and all you had to do to win the free trip was to be the associate who billed the most hours of online research. This was back in the days when the online legal research services charged according to the time you were logged on, and were very expensive. There were a limited number of dedicated research terminals, so some of my fellow litigation associates were showing up even earlier to work to be sure they could get a terminal, because one or more of their cases suddenly had the need for intensive and time-consuming legal research on arcane issues. The clients were thus not only be charged huge amounts for the research, but they were incurring all the fees for the attorney’s time.
Being the stick in the mud that I was, I suggested to the higher ups that this might be viewed as an inherent conflict of interest. Further, although the massive corporate clients might not normally question such things, some of them had in-house counsel who reviewed the bills, and they might wonder why legal research costs suddenly went up 20-fold. The contest was cancelled.
The point of this anecdote is to show that it does not take much to incentivize associates to up their billing, whether the case needs it or not. And contrary to popular belief, even large firms do not always have unlimited work (as evidenced by the cycles of layoffs at almost all large firms). If an associate’s case load is insufficient to generate 2,100 hours worth of work, but the firm is dangling a $115,000 bonus for that many hours, might the associate decide that a fourth round of written discovery is needed on a case?
I am finally vindicated.
Being an attorney, I can of course argue both sides of any issue. It occurred to me very quickly as a new attorney at the large firm, that the firm was making buckets of money off the time I billed. I had no issue with that – I could eventually work my way up and be the one with the buckets – but the lockstep associate system did not make sense. Regardless of the hours billed, first year associates made $X, second year associates made $XX, and so on. I had chosen to be a litigator, and I was working more hours than some of my corporate counterparts, while being paid the same.
The firm took a survey and asked for input from the associates regarding the pay arrangement. I had heard of a firm, way back then, that did what Fenwick is doing now – deviating a little from the lockstep approach with bonuses for more hours. I mentioned this in my survey response.
When the survey results were provided, my input resulted in the following footnote:
“One associate suggested that a firm exists that provides a tiered bonus system based on billed hours, but failed to identify the firm.”
The idea that a firm would pass along a little of the extra profit earned by the higher billing associates apparently could not be believed unless backed by receipts.