Does no billable hours have an effect on associates?

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Br3v
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Does no billable hours have an effect on associates?

Postby Br3v » Tue Nov 25, 2014 5:57 pm

Getting rid of billable hour requirements seems to be a popular trend in big law. But what effect, if any at all, does it have on a typical associate? I imagine you are going to be working the same hours?

Cogburn87
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Re: Does no billable hours have an effect on associates?

Postby Cogburn87 » Tue Nov 25, 2014 5:59 pm

Br3v wrote:Getting rid of billable hour requirements seems to be a popular trend in big law.

?

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Br3v
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Re: Does no billable hours have an effect on associates?

Postby Br3v » Tue Nov 25, 2014 6:03 pm

Cogburn87 wrote:
Br3v wrote:Getting rid of billable hour requirements seems to be a popular trend in big law.

?


See e.g.,http://abovethelaw.com/2014/11/which-biglaw-firm-just-got-rid-of-billable-hours//

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B.B. Homemaker
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Re: Does no billable hours have an effect on associates?

Postby B.B. Homemaker » Tue Nov 25, 2014 6:24 pm

Br3v wrote:
Cogburn87 wrote:
Br3v wrote:Getting rid of billable hour requirements seems to be a popular trend in big law.

?


See e.g.,http://abovethelaw.com/2014/11/which-biglaw-firm-just-got-rid-of-billable-hours//

One L&E shop fully ditching the billable isn't exactly a trend, but I get your point.

I'd imagine you work about as much, despite the focus being on the end product and not on the time it took to create it. Say you work a lot more efficiently and do the same amount of work in less time. That just leave more time to do more work, which is what firms are all about.

Just spitballing, though. I could be totally wrong. We'll see.
Last edited by B.B. Homemaker on Tue Nov 25, 2014 6:25 pm, edited 1 time in total.

Cogburn87
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Re: Does no billable hours have an effect on associates?

Postby Cogburn87 » Tue Nov 25, 2014 6:24 pm

Br3v wrote:
Cogburn87 wrote:
Br3v wrote:Getting rid of billable hour requirements seems to be a popular trend in big law.

?


See e.g.,http://abovethelaw.com/2014/11/which-biglaw-firm-just-got-rid-of-billable-hours//


Yeah. It's a bit of a stretch to call this a popular trend.

In any event, this is pretty awful. Just bill your time like you always have, except now your bonus depends on a variety of entirely subjective factors such as your "team orientation" during the past year! Seems like a fucking nightmare.

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B.B. Homemaker
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Re: Does no billable hours have an effect on associates?

Postby B.B. Homemaker » Tue Nov 25, 2014 6:30 pm

Oh right, I forgot the obvious benefit of not having to do time entry. I hear that's one of the least fun parts.

dixiecupdrinking
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Re: Does no billable hours have an effect on associates?

Postby dixiecupdrinking » Tue Nov 25, 2014 6:56 pm

You still have to enter your time. You just don't personally get assessed based on your hours.

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Icculus
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Re: Does no billable hours have an effect on associates?

Postby Icculus » Tue Nov 25, 2014 7:00 pm

B.B. Homemaker wrote:Oh right, I forgot the obvious benefit of not having to do time entry. I hear that's one of the least fun parts.


Least favorite part of my day. That and keep tracking of it.

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ScottRiqui
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Re: Does no billable hours have an effect on associates?

Postby ScottRiqui » Tue Nov 25, 2014 7:03 pm

dixiecupdrinking wrote:You still have to enter your time. You just don't personally get assessed based on your hours.


What are the odds that you really won't be assessed on your hours, at least informally? I'm thinking along the lines of traffic cops who might not officially have a "quota", but who will still get the hairy eyeball from their supervisor if they're writing 20% fewer tickets than their peers.

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mmelittlechicken
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Re: Does no billable hours have an effect on associates?

Postby mmelittlechicken » Tue Nov 25, 2014 7:07 pm

Br3v wrote:
Cogburn87 wrote:
Br3v wrote:Getting rid of billable hour requirements seems to be a popular trend in big law.

?


See e.g.,http://abovethelaw.com/2014/11/which-biglaw-firm-just-got-rid-of-billable-hours//

that's not biglaw or a trend

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fats provolone
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Re: Does no billable hours have an effect on associates?

Postby fats provolone » Tue Nov 25, 2014 7:12 pm

associates are already judged on all those factors. they're just also judged on hours. but it's not like you can excuse shitty work or miss deadlines or not respond to emails or whatever because you bill a lot of hours.

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B.B. Homemaker
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Re: Does no billable hours have an effect on associates?

Postby B.B. Homemaker » Tue Nov 25, 2014 7:13 pm

fats provolone wrote:associates are already judged on all those factors. they're just also judged on hours. but it's not like you can excuse shitty work or miss deadlines or not respond to emails or whatever because you bill a lot of hours.

:cry: :cry: :cry:

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bk1
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Re: Does no billable hours have an effect on associates?

Postby bk1 » Tue Nov 25, 2014 7:14 pm

Also: getting rid of stated requirements isn't all that meaningful, you're still going to be working a lot.

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parkslope
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Re: Does no billable hours have an effect on associates?

Postby parkslope » Tue Nov 25, 2014 10:10 pm

Br3v wrote:Getting rid of billable hour requirements seems to be a popular trend in big law. But what effect, if any at all, does it have on a typical associate? I imagine you are going to be working the same hours?


Law students tend to overly focus on billable hour requirements. A lot of the top firms don't have a billable hours requirement. See, e.g., Cravath (http://www.cravath.com/faq/), Sullcrom (http://www.chambers-associate.com/FirmFeature/3663), DPW (http://www.chambers-associate.com/FirmFeature/3663). These are firms with reputations of working their associates quite hard. I don't think there's any correlation at all.

The same goes for the level of a billable hour requirement. A firm that requires, say, 1900 versus 2100 to get a bonus might indicate their bonus policy but it doesn't say anything about how hard you're going to work. You might still have to bill 2400 at the 1900-minimum firm just because there is a lot of work to be done. Comparatively, it might be hard to even reach 2100 at the 2100-minimum firm.

I guess you could argue that a firm without a billable hour requirement is more likely to not fire you if there is a recession, but I think that's due to the overall financial position of those firms rather than their particular hours requirement.

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Lacepiece23
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Re: Does no billable hours have an effect on associates?

Postby Lacepiece23 » Tue Nov 25, 2014 10:33 pm

Mr firm does a lot of ASAs (alternative fee arrangements). We still have billable hours. All they do is make only allow us to work a certain amount of hours on a certain task its its fixed fee. Which sucks even more because you have to work extra hard to get the task done in that period of time or else you don't get to bill the rest of your hours.

Also, for contigent fee cases the firm will let you bill your hours accordingly. But this also has drawbacks. If you win you might have a really high realization rate because the verdict will be in excess of the hours you bill. But if you lose your realization rate will plummet and could be a problem at your end of the year review.

I'm not there yet, but this was how an associate explained it to me.

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fats provolone
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Re: Does no billable hours have an effect on associates?

Postby fats provolone » Tue Nov 25, 2014 10:35 pm

yea hours caps are way worse

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Br3v
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Re: Does no billable hours have an effect on associates?

Postby Br3v » Wed Nov 26, 2014 12:47 pm

I mean I was talking to an attorney during interviews who made it seem like it was the way of the future (I forget if their firm had already done so) and separately one of my professors made the same comment.

I guess I will ask again later when/if it becomes more popular. My initial thought was that hours would be kept informally.

LegalReality
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Re: Does no billable hours have an effect on associates?

Postby LegalReality » Thu Nov 27, 2014 1:01 pm

The only people who think this will happen are people not in biglaw. Flat fee billing burns you every single time. In litigation you have no idea how long you will go into the process so you can't flat fee. In transactional, a clean deal with no issues can take a lot less time than a deal where a lot of issues arise or you are negotiating against someone really tough. My firm has tried flat fee billing and scrapped it. We don't want to be in a position of choosing to do a shitty job or allocating a ton of resources for no money.

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Hopefully2012
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Re: Does no billable hours have an effect on associates?

Postby Hopefully2012 » Thu Nov 27, 2014 2:34 pm

I'm a proponent of flat-fee/percentage billing. While it may not work for every firm, I think the top firms have enough work so that they can have a good estimate at what the average costs are for all their deals across the board. Even though there are outliners, firms that have enough business (at least the V5s) should be able to self-insure against outliners.

It would reduce a huge unknown variable for clients, making the firm much more attractive from the client's perspective. I can't imagine WLRK is the only elite firm that can get away with charging a flat fee for deals, although they seem to be the only ones who have had the balls to do so.

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fats provolone
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Re: Does no billable hours have an effect on associates?

Postby fats provolone » Thu Nov 27, 2014 2:37 pm

firms already do estimate costs though. it's not like clients are just like "okay start the meter and let me know how much I owe at the end!"

Nat Sherman
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Re: Does no billable hours have an effect on associates?

Postby Nat Sherman » Thu Nov 27, 2014 3:52 pm

Hopefully2012 wrote:I'm a proponent of flat-fee/percentage billing. While it may not work for every firm, I think the top firms have enough work so that they can have a good estimate at what the average costs are for all their deals across the board. Even though there are outliners, firms that have enough business (at least the V5s) should be able to self-insure against outliners.

It would reduce a huge unknown variable for clients, making the firm much more attractive from the client's perspective. I can't imagine WLRK is the only elite firm that can get away with charging a flat fee for deals, although they seem to be the only ones who have had the balls to do so.

Except self insurance comes at a price of overcharging the more simple deals. You can't make up for the deals you go over with deals that go under because in the long run the clients that consistently go under would rather opt to a firm that just stuck to the traditional hourly method. No client will want to spend more than a penny than they have to, and the entire concept of insurance is risk sharing. No client with little risk of going over billables is going to want to subsidize another client who will all for the benefit of getting a "flat fee." So in the end you would just be getting burned by all the deals that go over the flat fee.

The only way you wouldn't lose money off flat fee is if every client had an equal amount of flat fee deals that went under as well as over by the same amount of billables. Which at that point you're pretty much indifferent between flat fee and hourly, so why would you switch to flat fee when at best it'll keep you in your current position, and at worst will burn you.

The only argument for flat fee billing is if it somehow affected the type or quantity of work coming in.

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Desert Fox
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Re: Does no billable hours have an effect on associates?

Postby Desert Fox » Thu Nov 27, 2014 3:54 pm

fats provolone wrote:firms already do estimate costs though. it's not like clients are just like "okay start the meter and let me know how much I owe at the end!"


Some do and it is 180

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Desert Fox
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Re: Does no billable hours have an effect on associates?

Postby Desert Fox » Thu Nov 27, 2014 3:59 pm

The firm that "abandoned" billable hours didn't really. They still have a billable hour requirement, they just aren't counting hours you bill that the client doesn't pay. That is way worse.

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B.B. Homemaker
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Re: Does no billable hours have an effect on associates?

Postby B.B. Homemaker » Thu Nov 27, 2014 4:03 pm

fats provolone wrote:firms already do estimate costs though. it's not like clients are just like "okay start the meter and let me know how much I owe at the end!"

:lol: :lol: :lol: :lol:

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Re: Does no billable hours have an effect on associates?

Postby Anonymous User » Thu Nov 27, 2014 7:40 pm

fats provolone wrote:associates are already judged on all those factors. they're just also judged on hours. but it's not like you can excuse shitty work or miss deadlines or not respond to emails or whatever because you bill a lot of hours.


FWIW, I work at a firm that gives out above-market bonuses and I was told that I got one because of the quality AND quantity (~2,100 hours) of my work.




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