% billables vs salary

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pat123
Posts: 5
Joined: Fri Feb 03, 2012 2:02 am

% billables vs salary

Postby pat123 » Fri Feb 03, 2012 2:04 am

I'll be summering at a patent prosecution boutique in a secondary market and they don't pay their associates salary. Instead they get 50% of their billables.

I have no idea how to compare this to salaried jobs and if this is a good deal or not. Was hoping you guys could help me out.

I'll just be getting an hourly salary for the summer, but I was curious for potential permanent employment in the future.

thanks

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JamMasterJ
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Joined: Sat Jan 29, 2011 7:17 pm

Re: % billables vs salary

Postby JamMasterJ » Fri Feb 03, 2012 2:07 am

What are associates' averages and ranges of annual billables? and what is the rate per hour?

pat123
Posts: 5
Joined: Fri Feb 03, 2012 2:02 am

Re: % billables vs salary

Postby pat123 » Fri Feb 03, 2012 2:16 am

JamMasterJ wrote:What are associates' averages and ranges of annual billables? and what is the rate per hour?


there really isn't much information out there on this (I've looked), and I never asked during my interview.

Obviously if i knew that information it would be a quick calculation to find a yearly salary. I'm just curious if people know in general if this is a good deal.

In general, I know prosecution generally bills less per year than litigation, but other than that i'm pretty clueless.

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JamMasterJ
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Joined: Sat Jan 29, 2011 7:17 pm

Re: % billables vs salary

Postby JamMasterJ » Fri Feb 03, 2012 2:17 am

pat123 wrote:
JamMasterJ wrote:What are associates' averages and ranges of annual billables? and what is the rate per hour?


there really isn't much information out there on this (I've looked), and I never asked during my interview.

Obviously if i knew that information it would be a quick calculation to find a yearly salary. I'm just curious if people know in general if this is a good deal.

In general, I know prosecution generally bills less per year than litigation, but other than that i'm pretty clueless.

I'm an 0L, so there's no way I'm giving advice, but I would definitely get these questions answered

Anonymous User
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Joined: Tue Aug 11, 2009 9:32 am

Re: % billables vs salary

Postby Anonymous User » Fri Feb 03, 2012 3:11 am

This is type of setup is fairly common in patent prosecution. However, most firms tend not to offer percentage of billables until you reach Senior Associate.

50% of billables is pretty good. Some firms have multiple tiers (e.g., 30% for first 1500 hours, 45% for 1500-1800 hours, 65% for 1800+ hours). I don't think that we can give you too much help since we don't know what your billing rate would be. Also, many firms in patent prosecution have flat fees. If you finish that $3000 billed Office Action in 3 hours, you collect the entire sum even though it's billed out at 12 hours (I just made up those numbers). Your efficiency rate and skill really controls how much you earn.

Some patent prosecutors at small boutiques earn more than their peers in BigLaw because of this compensation system. Typically, you might earn a bit less your first year or two, but start earning more later as you ramp up your skills and efficiency.

truevines
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Joined: Fri Jun 20, 2008 6:16 pm

Re: % billables vs salary

Postby truevines » Fri Feb 03, 2012 3:13 am

pat123 wrote:I'll be summering at a patent prosecution boutique in a secondary market and they don't pay their associates salary. Instead they get 50% of their billables.

I have no idea how to compare this to salaried jobs and if this is a good deal or not. Was hoping you guys could help me out.

I'll just be getting an hourly salary for the summer, but I was curious for potential permanent employment in the future.

thanks


Just make sure it's 50% of "billable hours," instead of "billed hours."

Somehow, I found this "50% billable" model somehow fishy and shaky. The model provides incentives for an associate to spend unnecessarily long time on a case, instead of working on more cases.

I have a feeling that you're actually getting 50% of "billed" hours that the firm actually charges the client.

On the other hand, maybe your firm's using a flat-fee model, instead fo billable hours. Then, you might get half of the fees.
Last edited by truevines on Fri Feb 03, 2012 1:32 pm, edited 1 time in total.

turbotong
Posts: 181
Joined: Thu Oct 28, 2010 12:53 am

Re: % billables vs salary

Postby turbotong » Fri Feb 03, 2012 11:53 am

Doing a rough estimation, it is worth it if you are billed out at over $200/hr for sure. Half that is $100/hr. Assume 20% inefficiency -> $80/hr.
$80/hr x 40hrs/week (you will work 50hrs/wk) x 50 weeks (assume 14 days vacation) = $160,000, no bonus.

CanadianWolf
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Joined: Wed Mar 24, 2010 4:54 pm

Re: % billables vs salary

Postby CanadianWolf » Fri Feb 03, 2012 11:59 am

It's going to be "billed & collected hours", not just "billable" hours. Or, if it is, then you may have hit the jackpot.

pat123
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Joined: Fri Feb 03, 2012 2:02 am

Re: % billables vs salary

Postby pat123 » Fri Feb 03, 2012 1:17 pm

Whats the difference between "billed and collected" and "billable?"

thanks for the insight everyone

CanadianWolf
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Joined: Wed Mar 24, 2010 4:54 pm

Re: % billables vs salary

Postby CanadianWolf » Fri Feb 03, 2012 1:42 pm

Client has to actually pay for the hours billed. "Billable" hours usually get cut by partners after submitted by the associate. Clients sometimes don't pay or negotiate a lower bill.

Emu Flu
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Joined: Fri Jul 16, 2010 10:21 pm

Re: % billables vs salary

Postby Emu Flu » Fri Feb 03, 2012 9:18 pm

The partners will cover uncollected bills at most patent prosecution boutiques. You'll most likely also have a "draw" to provide you a set monthly minimum.

I don't think that you have anything to worry about. This is not sketchy.

Renzo
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Joined: Tue Dec 02, 2008 3:23 am

Re: % billables vs salary

Postby Renzo » Fri Feb 03, 2012 9:35 pm

I don't know fuckall about patent work, but I can tell you that the reason such an arrangement is not common among biglaw shops is that it would be a huge, raging, gigantic, raise for the associates at the direct expense of the partners. I just did the math, and based on the quoted rate at my firm, as a 1st year I'd have to bill about 19 hrs a week to make $160,000. Obviously, that's before write-offs and negotiated rates, but still.

It's a really good deal if there's enough work. And even if isn't enough work, you'd probably rather have a floating salary than unemployment.




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