DO THEY COUNT AS BILLABLES?

In “New Lawyers, New Classes,” the Wall Street Journal reports on firms sending their attorneys through business-education type programs. Describing one full-time four week example, it states the obvious: “[L]aw firms aren’t billing the 160 training hours to clients.”

But the article is silent on a more interesting question: If a lawyer has to devote 160 hours — or any other amount — to firm-required business education, will that time count toward minimum billable hour expectations?

1958 ABA pamphlet suggested that a reasonable full-time schedule produced 1,300 client hours a year. That’s right, 1,300. Today, senior partners who had no minimum billables requirements as associates run firms where some new attorney orientation sessions dictate monthly targets, as well as annual ones. Big law associates average more than 2,000 billables a year. Adding another 160 hours — a month’s worth of time — for firm-required education is no small matter.

During year-end reviews, associates typically receive spreadsheets detailing their hours by category: client billables, recruiting, training, pro bono, personal, and so forth. (Hat-tip to The American Lawyer‘s A-List, which prompts many firms to count pro bono hours as billable time.)

How about training? Back in January 2008 when law firms were more concerned about attracting and retaining good associates than they are now, the New York Times found firms attacking enormous associate attrition rates with initiatives aimed at keeping the keepers. But even that didn’t always extend to giving billable credit for training.

For example, the Times wrote, “Strasburger & Price, a national firm based in Dallas, announced last October [2007] that it was decreasing the hours new associates were expected to log, to 1,600 from 1,920 annually. (Lest you think those lawyers will be able to go home early, however, note that newcomers will now be asked to spend 550 hours a year in training sessions and shadowing senior lawyers.)”

According to the NALP directory, Strasberger’s policy is unchanged, but at least it’s transparent. Many big law counterparts have remained opaque.

Consider the public positions of the three firms in the WSJ article — Debevoise & Plimpton; Milbank, Tweed, Hadley & McCoy; and Skadden, Arps, Slate, Meagher & Flom. In their current NALP listings, none discloses its average associate billables for 2009 or 2010. But that doesn’t mean those in charge aren’t watching hours closely.

According to the Journal, “Debevoise said its associate billable hours rose by more than 10% in 2010 and are up by even more so far this year.” To what? The article doesn’t say — and neither does the firm.

Earlier this year, Milbank’s chairman, Mel Immergut, noted that billables were up, but “still low compared to what [they have] historically been.” Again, no hint of what those levels were or are.

Skadden’s culture is no secret. It became the subject of unwanted attention after one of its associates, Lisa Johnstone, died in June at age 32 – reportedly after weeks of extremely long hours.

All three firms state on their NALP forms that they have no minimum billable hours requirement. Debevoise’s website says that billable and pro bono hours “are monitored by partners to assure an associate’s full involvement in our practice and to attempt to spread workloads fairly.”

So perhaps there’s no need to worry about how those 160 business-education training hours get counted after all. Debevoise cares only about assuring full involvement and fairness for its associates, not whether they meet a minimum number of billables. Like many firms, Milbank actually uses its training programs as a sales tool: “Get paid to go to Harvard,” its website proudly proclaims. Skadden will always be Skadden.

But give credit where it’s deserved: Debevoise ranked an impressive 16th in overall mid-level associate satisfaction this year. Milbank and Skadden fared less well — placing 68th and 69th, respectively, out of 126. (The unfortunate backstory is that overall satisfaction for the survey group dropped to another record low.)

Interestingly, all three responded to this query on the NALP form:

“Billable hours credit for training time.”

Debevoise and Milbank answered “Y.” Skadden said “N.”

“Credit” toward what? Unless billables matter to evaluating or compensating associates, wouldn’t firms without a minimum requirement answer “N/A”?

Maybe their stated answers are typos.

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2 thoughts on “DO THEY COUNT AS BILLABLES?

  1. “Billable hours credit for training time.”

    No, not really, but the way partners look at hours, the important thing is the general monthly average of actual billables, adjusted for writeoffs. Generally, at most firms a hardworking associate who attends such a program or takes time off for a baby or the like gets an asterisk. (“Sure, X’s hours were low for the first 6 months, but X went on that Harvard program. X has done 200 a month since returning.”) They might let it count for bonus, but again, only if the rest of the time the person was working at bonus-level hours. A few extra associate bonuses are not major amounts to the firm. Still, if one were coming up for partner that year or the next, better not to have any asterisks. Avoid nonbillables as well as you can without ticking anyone off.

    But run them through the time-keeping system and reporting them to management like they were billables? Not very likely.

  2. Your excellent and timely piece (pun very much intended) should be read in light of the recent press reports of a former Greenberg Traurig partner who was just sentenced to six years in prison for padding his bills (http://www.legalweek.com/legal-week/news/2109171/-greenberg-partner-sentenced-overbilling-chicago-suburb ) and two public defenders who were also just charged with padding their bills (http://www.abajournal.com/news/article/2_lawyers_face_federal_wire_fraud_case_re_alleged/?utm_source=maestro&utm_medium=email&utm_campaign=daily_email ).

    It also brought to mind the tale of Ian Graham, a former Latham associate who while grinding away at the firm undertook a pro bono case in which he successfully obtained the release of a wrongfully convicted inmate who had served ten years in jail. The criminal case was hard fought and against daunting odds and Graham often spent 500 hours a year on the case. As a senior associate, Graham was admonished that his billable hours were low and he needed to pump them up. (http://abovethelaw.com/2010/05/unbillable-hours-a-true-story/ ).

    The real point is that demanding that lawyers bill those kinds of hours creates inefficiency, bad judgment and, as you noted, in at least one tragic case, possibly worse. http://kowalskiandassociatesblog.com/2011/04/18/it-shouldn%e2%80%99t-suck-to-be-an-associate-at-a-law-firm/

    There will be a day when a GC will include on an RFP something along the lines of “What steps does your firm take to assure that lawyers working at the firm are well rested and alert?”

    Jerry Kowalski

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