Hours and Profit - Patent

(On Campus Interviews, Summer Associate positions, Firm Reviews, Tips, ...)
Forum rules
Anonymous Posting

Anonymous posting is only appropriate when you are revealing sensitive employment related information about a firm, job, etc. You may anonymously respond on topic to these threads. Unacceptable uses include: harassing another user, joking around, testing the feature, or other things that are more appropriate in the lounge.

Failure to follow these rules will get you outed, warned, or banned.
Anonymous User
Posts: 273214
Joined: Tue Aug 11, 2009 9:32 am

Hours and Profit - Patent

Postby Anonymous User » Tue Oct 30, 2012 8:27 pm

Many IP shops work with clients under a fixed cost model (ex. $X thousand per application, $Y thousand per office action). These shops range from small boutiques to BigLaw firms such as F&R, Kilpatrick Townsend, Finnegan, etc.

Because you don't make profit for your firm by billing out hours to clients, are you as an associate really judged based on the hours that you worked, or is it based on the total amount of work that you billed out? From my personal experience, most of these firms seem to stick to the billable hour model.

Anonymous User
Posts: 273214
Joined: Tue Aug 11, 2009 9:32 am

Re: Hours and Profit - Patent

Postby Anonymous User » Tue Oct 30, 2012 8:39 pm

Depends on what type of patent work the firm does. I was concerned with this too when I was deciding which firm to join next year as an associate. Based on my experience and speaking with other attorneys in the field, it seems like it is easier to bill hours with litigation work. So I ended up choosing a firm that does a mix of prosecution and litigation to ensure I can meet my 1950 billable hour requirement. A lot of firms realize it is harder to bill 1950 hours with just straight prosecution work. So in that case, a lot of those firms tend to have lower billable requirements.

But I don't see how it would be any different then how any other firm operates. As you get more experience, you will not need as much time to draft a patent application or Office Action response or a legal research memo. Thus, your hourly rate will likely increase as well. As you get better, you will then need to seek out more work to ensure you meet your billable hour requirement. Otherwise, you will get the boot.

I will be starting at one of the larger ip boutique firms next fall. So, I will keep you posted and let you know how it ends up working. Definitely scared about meeting the billable hour requirement so I am going to make sure I get a decent balance of prosecution and litigation work. I have also heard that ITC work is also a great way to bill a lot of hours; it is very demanding though and requires you to sacrifice a lot of your personal life for a few months. Would love to hear from other patent attorneys what their approach was in meeting their billables.

Anonymous User
Posts: 273214
Joined: Tue Aug 11, 2009 9:32 am

Re: Hours and Profit - Patent

Postby Anonymous User » Wed Oct 31, 2012 11:38 pm

Anonymous User wrote:Many IP shops work with clients under a fixed cost model (ex. $X thousand per application, $Y thousand per office action).

Just to clarify, I believe what you are referring to are the billing cap models that are used for patent prosecution. From what I've seen, if the cap is high enough, people hardly notice. However, projects with billing caps are generally undesired.

Because you don't make profit for your firm by billing out hours to clients, are you as an associate really judged based on the hours that you worked, or is it based on the total amount of work that you billed out? From my personal experience, most of these firms seem to stick to the billable hour model.

The "billed out" model is not very common. It only exists in patent prosecution-heavy practices and in boutique-like firm. I've never seen it used in litigation-heavy firms. The biggest firm that I'm aware of that practices (or at least has practiced) the "billed out" model is Knobbe.

User avatar
dood
Posts: 1639
Joined: Tue Apr 21, 2009 11:59 am

Re: Hours and Profit - Patent

Postby dood » Thu Nov 01, 2012 12:05 am

at most firms u can bill as many hours as you want, and you'll get credit for all those billables (unless ur at knobbe). but the partner will have to cut it to fit into the billing cap from the client. the key is just ask what the budget is...really varies by client and what u'r preparing. note that if you bill 30 hours for a office action, u'll prolly never get work from that partner ever again.

Black-Blue
Posts: 279
Joined: Wed Jan 14, 2009 10:46 pm

Re: Hours and Profit - Patent

Postby Black-Blue » Thu Nov 01, 2012 1:45 am

Do you generally prefer a higher "billable hours" requirement over a lower "billed out" requirement (I believe this which OP is referring is also known as "after-cut hours", "billed hours," and "billed through hours")?

Anonymous User
Posts: 273214
Joined: Tue Aug 11, 2009 9:32 am

Re: Hours and Profit - Patent

Postby Anonymous User » Thu Nov 01, 2012 10:09 am

dood wrote:at most firms u can bill as many hours as you want, and you'll get credit for all those billables (unless ur at knobbe). but the partner will have to cut it to fit into the billing cap from the client. the key is just ask what the budget is...really varies by client and what u'r preparing. note that if you bill 30 hours for a office action, u'll prolly never get work from that partner ever again.


So, if we ended up spending 30 hours on an Office Action, would it be better for us to "write off our own hours" and just report that you spend maybe 20 hours on the Office Action?

Anonymous User
Posts: 273214
Joined: Tue Aug 11, 2009 9:32 am

Re: Hours and Profit - Patent

Postby Anonymous User » Thu Nov 01, 2012 12:07 pm

Anonymous User wrote:
dood wrote:at most firms u can bill as many hours as you want, and you'll get credit for all those billables (unless ur at knobbe). but the partner will have to cut it to fit into the billing cap from the client. the key is just ask what the budget is...really varies by client and what u'r preparing. note that if you bill 30 hours for a office action, u'll prolly never get work from that partner ever again.


So, if we ended up spending 30 hours on an Office Action, would it be better for us to "write off our own hours" and just report that you spend maybe 20 hours on the Office Action?


I wouldn't do that. At some point (early on if you're smart), you should realize that you're going to blow budget to finish the OA. Maybe this isn't your fault. Maybe the field is too tight and this really just isn't a good patent. Talk to the partner. He can help you (a) amend the claims or (b) increase the budget. Or (c) .... Whatever it is, billing is the partner's problem -- between him and the client. If you're competent, there should not be an issue with him writing off your hours. OA's aren't that hard (I mean, maybe your first few are as a summer or before you get familiar w/the partner's style and the process).

User avatar
dood
Posts: 1639
Joined: Tue Apr 21, 2009 11:59 am

Re: Hours and Profit - Patent

Postby dood » Thu Nov 01, 2012 2:07 pm

Anonymous User wrote:
Anonymous User wrote:
dood wrote:at most firms u can bill as many hours as you want, and you'll get credit for all those billables (unless ur at knobbe). but the partner will have to cut it to fit into the billing cap from the client. the key is just ask what the budget is...really varies by client and what u'r preparing. note that if you bill 30 hours for a office action, u'll prolly never get work from that partner ever again.


So, if we ended up spending 30 hours on an Office Action, would it be better for us to "write off our own hours" and just report that you spend maybe 20 hours on the Office Action?


I wouldn't do that. At some point (early on if you're smart), you should realize that you're going to blow budget to finish the OA. Maybe this isn't your fault. Maybe the field is too tight and this really just isn't a good patent. Talk to the partner. He can help you (a) amend the claims or (b) increase the budget. Or (c) .... Whatever it is, billing is the partner's problem -- between him and the client. If you're competent, there should not be an issue with him writing off your hours. OA's aren't that hard (I mean, maybe your first few are as a summer or before you get familiar w/the partner's style and the process).


exactly. key is communication. ask the partner what the budget is beforehand, keep him informed during. new associates are given a little slack too, at least at my firm.

Anonymous User
Posts: 273214
Joined: Tue Aug 11, 2009 9:32 am

Re: Hours and Profit - Patent

Postby Anonymous User » Fri Nov 02, 2012 3:32 pm

For a normal OA, how long does it take you to draft a proposed reply and client letter, get it by your partner and out the door to the client?

I have about 8 moths of experience now - takes about 10-11 hours on average for me.

User avatar
dood
Posts: 1639
Joined: Tue Apr 21, 2009 11:59 am

Re: Hours and Profit - Patent

Postby dood » Sun Nov 04, 2012 8:31 pm

Anonymous User wrote:For a normal OA, how long does it take you to draft a proposed reply and client letter, get it by your partner and out the door to the client?

I have about 8 moths of experience now - takes about 10-11 hours on average for me.


im prolly budgeted about 5 hours + 1 hour of partner review for a non-final OA....took me maybe 20 hours on my first one, but now im at around the allotted time. depends on ur field though, im doing mostly electrical.

ehshornet
Posts: 70
Joined: Mon Jun 16, 2008 6:23 pm

Re: Hours and Profit - Patent

Postby ehshornet » Sun Nov 04, 2012 8:41 pm

How about for drafting a patent application? How much time should we approximately bill? What did you end up billing when you first started drafting?

User avatar
dood
Posts: 1639
Joined: Tue Apr 21, 2009 11:59 am

Re: Hours and Profit - Patent

Postby dood » Sun Nov 04, 2012 9:27 pm

ehshornet wrote:How about for drafting a patent application? How much time should we approximately bill? What did you end up billing when you first started drafting?


dunno ive never drafted one. but i never cut my hours....just ask a lot of questions so you can learn as fast as possible, no one expects u to know everything right away.

my life mentor and manager at my pre-law school job used to say "i dont give a fuck if u make a mistake, because if u dont make mistakes - that just means you're not learning and pushing yourself to take on more responsibility. but i do have a problem with u making the same mistake twice - dont do it."

Anonymous User
Posts: 273214
Joined: Tue Aug 11, 2009 9:32 am

Re: Hours and Profit - Patent

Postby Anonymous User » Mon Nov 05, 2012 1:48 am

5 hours is a very low budget unless it's high-volume inbound work.

I do domestic electrical and software work and the worst budget is 8 hours. Some of them can go a bit over 16 hours for a budget.

Applications range from 30-50.

Anonymous User
Posts: 273214
Joined: Tue Aug 11, 2009 9:32 am

Re: Hours and Profit - Patent

Postby Anonymous User » Tue Nov 06, 2012 5:53 am

At the firm that I SA'd for, I was told (unofficially of course) that anything more than 10 hours for a "fresh" OA response is too much after your first year. For an application that you have previously worked on, I was told that 4 hours for a response was the target. Of course those targets would vary based on the complexity of the specific application.

Anonymous User
Posts: 273214
Joined: Tue Aug 11, 2009 9:32 am

Re: Hours and Profit - Patent

Postby Anonymous User » Wed Nov 07, 2012 6:52 pm

Anonymous User wrote:At the firm that I SA'd for, I was told (unofficially of course) that anything more than 10 hours for a "fresh" OA response is too much after your first year. For an application that you have previously worked on, I was told that 4 hours for a response was the target. Of course those targets would vary based on the complexity of the specific application.


I think this is about right.




Return to “Legal Employment”

Who is online

The online users are hidden on this forum.