JD Journal » billable hours

Holland & Knight Nixes Billable Hours Tracking in Public Policy & Regulation Group

rebneely — Thu, 15 Dec 2011 14:54:52 +0000

International law firm Holland & Knight announced in recent days that the firm’s Public Policy & Regulation Group will eliminate the tracking of billable hours for fixed fee clients, effective January 1, 2012.

The move makes the firm the largest national practice group to do so, and follows the group being recognized by The National Law Journal and Legal Times as the winner in the “Law Firm Government Affairs/Lobbying” category in the first annual “The Best of Legal Times” readership survey.

Rich Gold, the head of the practice group was quoted as saying in a press release at the firm’s website: “Helping our clients reach their advocacy goals has always been our top priority. This new approach allows us to totally focus on certain efforts and outcomes that our clients expect. Our primary goal is to please our clients, and our team should not be distracted by administrative tasks like keeping time in an effort to achieve this goal.”

It is common knowledge that nearly every law firm follows a “billable hour” approach to charging for its services. However, the practice of logging time poses several drawbacks, including time spent on administrative tasks, like keeping time, which might otherwise go toward creative solutions for client problems.

Gold was also quoted as saying: “All law firms bill time; it is simply a practice engrained in the profession. While that has been changing somewhat over the last years, we hope to accelerate the pace. To maintain a competitive edge in the marketplace, we are constantly looking for ways to improve upon our daily operations and strengthen our known team approach to servicing clients, which is our calling card in the industry. Recruiting top talent is highly competitive. Billing your time can be a hard sell to someone who hasn’t done it before. I am delighted that we will be eliminating that obstacle starting in 2012, which will allow future hires to immediately begin servicing clients without having to be distracted with keeping time.”

Holland & Knight was also ranked third among 30 top-performing law firms for its superior client service. In a survey of nearly 250 corporate counsel and client representatives conducted by The BTI Consulting Group, Inc., the firm ranked third in overall client service and received the top honor – “Best of the Best” – in the area of “Value for the Dollar.” The firm has also been ranked among BTI’s Top 30 for nine of the past ten years. The survey notes that, “Holland & Knight’s staying power is fueled by the firm’s consistently strong performances” in key areas year after year.

Founded in 1968 by the merger of two law firms, international law firm Holland & Knight today has over 1,000 lawyers in 17 U.S. offices. The firm also has offices in Abu Dhabi, UAE, Beijing, China, and Mexico City, Mexico. The full service law firm represents clients in a wide range of industries, including aviation, Indian law, energy, education, corporate services, intellectual property, land use, public finance, real estate and syndication, among others.

In-House Counsel Look to Rein In Legal Spending

joshua — Wed, 02 Jun 2010 23:41:26 +0000

A study from Robert Half Legal reveals 25 percent of in-house counsel surveyed plan to decrease its work with outside firms in the next 12 months and 61 percent expect there to be no change.

The report, Delivering Maximum Value in a Cost Conscious Legal Area, notes reducing outside legal spending has become a top priority for in-house counsel with the most recent economic crisis. Only 10 percent of respondents expected to increase work given to outside firms.

As a result of this changing relationship, law firms have begun to rethink how it delivers services in order to put it better in line with what corporate clients are willing to spend, the report notes.

The poll found 22 percent of lawyers said the greatest challenge for their firms is dealing with increased competition for business and 19 percent cited meeting revenue goals. To help increase value to clients, according to the report, many firms have been replacing traditional operating methods, such as billable hour and lockstep compensation, with flexible fee arrangements and performance-based compensation.

The report was made through Robert Half Legal’s tenth annual Future Law Office project. Charles Volkert, executive director of Robert Half Legal, described the changes taking place.

“Among all the trends we have identified in our Future Law Office research, the increasing need for law offices to provide more value-added and cost-effective legal services is the most prominent,” Volkert said “Legal departments are being pressured to reduce their spending on outside counsel and boost efficiency. In response, law firms are revamping their legal services delivery processes to retain clients and improve profitability.”

Greenberg Traurig Partner Charged in $1 Million Theft

sara — Mon, 08 Mar 2010 17:03:35 +0000

Local success story and Greenberg Traurig partner Mark J. McCombs has been charged with stealing more than $1 million in tax increment funds by billing Calumet Park, a suburb in the Chicago area, for work he never did. McComb grew up in Calumet Park and residents were so proud of his accomplishments a street in the village was named after him.

McCombs handled legal matters for the village for years. Former Mayor Buster Porch trusted McCombs to such an extent that he signed off on bills McCombs presented to him with little to no explanation provided. Porch’s successor Joseph DuPar continued to do the same. McCombs did not pocket the money personally but the substantial billing hours he presented enhanced his standing in the firm, providing him more opportunities for advancement and promotion, according to Assistant State’s Attorney John Mahoney.

If McCombs is convicted he could face a prison sentence of 6 to 30 years.

Update: Greeberg Traurig terminated Mr. McCombs after learning of the charges against him and is reviewing the report, according to Lourdes Martinez, Director of Communications for the firm.

Practising Law Institute Set to Discuss ‘Hot Button’ Topics

joshua — Wed, 13 Jan 2010 23:04:30 +0000

The non-profit Practising Law Institute (PLI) will launch its newest state-of-the-art legal education seminar Feb 1 in New York City. The symposium, which will be hosted by leading consultants and academics, will focus on “hot button” issues such as the future of “big law,” billable hours, alternative billing options, and delivering the highest quality of work at a reasonable cost.

The seminar will be held in PLI’s conference center and also be webcast live via its web site, www.pli.edu.

(PLI) is a non-profit continuing legal education organization chartered by the Regents of the University of the State of New York. It was founded in 1933.

Salary Thaw and Bonuses at Arnold & Porter

joshua — Mon, 04 Jan 2010 16:15:31 +0000

At the start of 2009 Arnold & Porter announced that it was freezing salaries but held out the hope that some or all of the difference might be paid out later if economic situations warranted. At the end of December a firm wide memo went out in which Arnold & Porter announced that all associates in good standing would be receiving the full difference between their frozen salaries and the salary they would have otherwise earned in one lump payment. Furthermore, salaries have been unfrozen for 2010, with everyone getting bumped up a year. Arnold & Porter will also be paying unspecified bonuses for 2009 based on a combination of billed hours and subjective reviews.

Founded in 1946, Arnold & Porter LLP is an international law firm based in Washington DC, which is well known for its trial, corporate, and antitrust work; and for its pro bono commitments and support for progressive causes.

Kramer Levin Matches Cravath Bonuses

joshua — Tue, 29 Dec 2009 19:30:16 +0000

Kramer Levin is paying bonuses mid February and they are based on the Cravath scale. To be eligible for a Cravath sized bonus, an associate must have met certain billable hour targets. Anyone that falls short may be eligible for a smaller bonus and those that joined the firm mid year will receive a pro rated bonus.

Founded in 1968, Kramer Levin Naftalis & Frankel LLP is a law firm with offices in New York City and Paris.

Quinn Emanuel Bonuses

joshua — Wed, 23 Dec 2009 00:22:13 +0000

Quin Emanuel is making its naughty and nice list. Those who were naughty are getting a lump of coal, and those that were nice are getting a bonus – in some cases a very nice bonus.

Bonuses are being paid by class depending on the number of hours billed. To qualify for the smallest bonus, an associate needs to have 2000 hours. At 2100 hours, associates hit the Cravath bonus scale, but it doesn’t stop there. Bonus go up again at 2400 hours, 2600 hours, and those that managed to bill 2800+ hours will get an even bigger bump. In this economy? Did anyone actually find 2800 billable hours? Presumably, the firm wouldn’t offer bonuses for that level without having some earners, so congratulations to any Quinn Emanuel associate earning the top chart bonuses – now take a day off!

Quinn Emanuel Urquhart Oliver & Hedges LLP was founded in 1986 by John B. Quinn. It is headquartered in Los Angeles, with major offices in San Francisco, the Silicon Valley, and New York.

Salary Thaw and Bonuses at Hogan & Hartson

joshua — Tue, 22 Dec 2009 21:06:15 +0000

First a little background: Hogan & Hartson pays associates on a two tier system, where associates can choose to receive higher base salary but with a higher billable hours requirement, or take a lower base salary with lower expectations. This year, salaries were frozen at 2008 levels and in the spring, Hogan & Hartson arbitrarily moved any associate not on track to make the higher billable hour total down to the lower track, paying them the less lucrative salary, but with the promise to restore the money if they caught up.

Today Hogan & Hartson passed out three nice bits of news. First, salaries are being unfrozen and all associates will advance one year in 2010, although the frozen year will not be restored. Second, anyone that was bumped down a track who meets the billable hour requirement for the upper track will receive the difference in a lump sum payment. They will also be returned to the higher track, even if they didn’t meet the hourly total for this year. Finally, bonuses have been announced. The bonuses are discretionary and require that the associate meet a billable hour target. Non billable hours above and beyond the call of duty may be credited to meet the total at the firm’s discretion.

2010 Steel Cage Match: Corporate Clients vs BigLaw

joshua — Thu, 03 Dec 2009 23:22:34 +0000

I have a mental image of two giants staring each other down inside a locked steel cage before charging at one another, swinging leather briefcases and throwing blackberrys. In this corner, wearing a charcoal suit and a red power tie we have BigLaw, who wants to raise billing rates by 5%, and in this corner wearing a black pinstripe suit with a pastel blue tie we have Corporate Clients, who want to pay 2008 rates or less. The cage is sealed, and only one will emerge victorious.

In a year in which both law firms and their corporate clients have had to make deep cuts and face economic uncertainty, neither side seems ready to blink. Several law firms have enacted salary cuts for first year associates along with lowering the billing rate for their time, and alternative fee structures are on the rise. But profits are down and the easy cost cutting measures have already been enacted, which means law firms want to raise rates to compensate. Corporations are turning to their own legal department for more of their work and are also suffering from lowered profits and greater public scrutiny. In a grudge match with enormous stakes, who will back down first?

New Round of Salary Cuts at Allen Matkins

joshua — Fri, 23 Oct 2009 18:23:54 +0000

Allen Matkins is having a rough year. Back at the end of March the firm let some attorneys go. First year associate salaries were cut, along with the salaries of some additional associates. Now it appears they are finishing the job with additional layoffs and more salary cuts.

Tipsters at Above the Law reported the new cuts, saying that associates who are low on hours will only be receiving 60% of their original salary with the other 40% to be paid at the end of the year if the hours are made up. How they’re going to make up the hours in this market is anyone’s guess.

If you have any further information about what’s happening at Allen Matkins, please fill us in here.

Update: According to our own tipsters, all associate and paralegal salaries have been slashed to 60%.

More Firms Considering Moving Away From “The Billable Hour”

joshua — Fri, 18 Sep 2009 15:01:51 +0000

The blawgosphere is buzzing with reports that the billable hour is dying, but as Mark Twain once quipped, “The report of my death was an exaggeration”.

It all started where most trends start – Los Angeles. The Southern California stalwart O’Melveny & Myers updated its vision with a five year plan that called for, among other things, flat rate billing for transactional work. Now it appears two other Big Law firms may follow suit. Mayer Brown and Reed Smith are both considering doing the same.

Does this mean first year associates can look forward to eight hours of sleep per night? Is the pressure to rack up billable hours going to vanish? Doubtful. This is three firms and one area of law. The billable hour remains very much in the driver’s seat otherwise.

It’s worth noting that O’Melveny is the first major firm to make this transition, but the path was paved by smaller firms, like Bartlit Beck and Raymond & Bennett, looking to attract clients that want the security of knowing what their fees will total up front, a strong selling point in an economic downturn.

Mintz Levin Cuts Associate Salaries

Erik Even — Thu, 06 Aug 2009 16:29:49 +0000

Boston’s Mintz Levin, which just laid off an undisclosed number of attorneys and staff, has cut associate salaries.

The salary reductions are based on hours billed over the last 12 months — associates on track for 1,635 hours will see a 5% cut. Fewer hours mean a larger cut, up to 35%.

The cuts are firmwide.

Mintz Levin Cohn Ferris Glovsky & Popeo is a general practice law firm employing 500 attorneys worldwide. Headquartered in Boston, Mintz also has offices in New York City, Washington DC, Stamford, Los Angeles, Palo Alto, San Diego, and London.

Halliwells Cutting Work Hours — Billing Requirments Stay the Same

Erik Even — Fri, 24 Jul 2009 16:36:42 +0000

Manchester, UK’s Halliwells, which in March launched a redundancy consultation targeting 30, is cutting attorneys’ working hours, but not adjusting its billable hours requirements.

The firm is putting three quarters of its fee earners on a four-day week, with a commensurate 15% pay cut.

But the firm is keeping billable hours targets unchanged, meaning attorneys must work 25% more hours each day to keep up.

Halliwells is a commercial law firm, and one of the UK’s top 50.

Kaye Scholer Slashes Associate Pay

Erik Even — Wed, 24 Jun 2009 00:10:24 +0000

Kaye Scholer is cutting pay for associates who bill under 1,600 hours this year.

First- and second-years who aren’t on track to meet 1,600 hours this year will have their salary cut 20% for the rest of the year. Third-year associates will lose 15%.

If associates hit 1,600 hours before the end of the year, their pay will be restored.

Kaye Scholer is a law firm founded in 1917 by Benjamin Kaye and Jacob Scholer. The firm has more than 500 attorneys in eight offices located in New York, Chicago, Frankfurt, London, Los Angeles, Shanghai, Washington DC, and West Palm Beach.

Pillsbury Cuts Associate Pay [Update]

Erik Even — Fri, 12 Jun 2009 16:40:45 +0000

Pillsbury, which offered associates $60,000 to leave the firm, is imposing associate salary reductions based on hours.

Salaries are being cut between 10% 5% and 20%, depending on how many hours the associate has worked this year (January through May).

Those who worked the highest number of hours may not see a salary cut.

Pillsbury Winthrop Shaw Pittman LLP is an international law firm with offices located throughout the US and globally, including key financial centers New York, London, Tokyo and Shanghai.

UPDATE

Further details have emerged. Pillsbury’s hours target is 1,950. A 90% utilization rate will get you a 5% pay cut. A 75% rate gets the 20% cut. Some training and pro bono hours will be counted.

The firm is currently considering its compensation program for 2010; the implication is that the curretn cuts will be temporary.

Hildebrandt: Demand for Legal Services Down 8%

Erik Even — Tue, 12 May 2009 18:41:39 +0000

According to the Hildebrandt International Peer Monitor Index, demand for legal services dropped by more than 8% compared to Q1 2008, dropping sharply in January and February but flattening in March.

In New York demand for legal work fell 9.5%; and in Washington DC and London, law work fell over 12%.

Normally, law firm billing rates grow by about 7% a year. But in the last year, rates grew by less than 3%.

The study also suggests that attorney productivity, measured by billable hours, was down overall by 11.5%.

Unsurprisingly, the “good” news was in bankruptcy, where work is up 13% since Q1 2008.

Hildebrandt, part of Thomson Reuters, does merger consulting, with more than 50 consultants located in the United States and in London.

Crowell & Moring Reducing Salaries for Some Lawyers

Erik Even — Fri, 24 Apr 2009 16:48:09 +0000

Crowell & Moring has told as many as 20 lawyers across the firm that their salaries will be reduced in light of reduced hours. First year associates were not affected.

Crowell requires at least 1,900 billable hours from all of its lawyers. If a lawyer gets as low as 1,600 hours, the firm intervenes to determine the source of the problem and to fix it. The firm says salary cuts are a last resort.

There is no tiered compensation.

Crowell has not yet held any layoffs in the global recession, and would like to avoid doing so.

Crowell & Moring LLP is an international law firm with more than 450 lawyers. Based in Washington, DC, the firm also has offices in New York, London, Brussels, Los Angeles, and Orange County, California.

Pillsbury Hiring for Trusts & Estates Practice

Erik Even — Fri, 10 Apr 2009 16:23:12 +0000

Pillsbury, which fired 155 in March, is hiring lawyers for its trusts & estates practice.

Palo Alto-based partner Jennifer McCall, head of Pillsbury‘s estates, trusts and tax planning group, is “looking to add lawyers in New York, Washington, DC, and expand trusts and estates in Los Angeles.”

She says candidates have to be good at tax law, sensitive with people, and high energy. “It’s hard to find a person with those three main components,” McCall said. “We do find them, but it’s hard.”

The practice is competitive with other Pillsbury groups in terms of rates, as partners bill $650 and up. McCall billed “substantially above 2,000″ hours last year, ranking among the highest-hour billers in the firm.

Pillsbury Winthrop Shaw Pittman LLP is an international law firm with offices located throughout the US and globally, including key financial centers New York, London, Tokyo and Shanghai.

Update: Hogan & Hartson Reduces Pay for Certain First-Year Associates

Erik Even — Fri, 03 Apr 2009 16:59:57 +0000

Yesterday Hogan & Hartson laid off 93 US support staff.

Today we learn more about changes in compensation for associates who joined the firm in Fall 2008.

Hogan offers two compensation tracks for its associates; those who bill 1,950 hours per year plan earn at least $160,000, while those on the 1,800-hours plan earn at least $145,000.

Starting yesterday, the firm moved associates who aren’t on track to bill at least 1,850 hours to the reduced salary track.

Associates can move back up to the higher salary level by billing 1,950 hours by the end of this year. They can count up to 100 pro bono hours toward their billable hour totals. If they log more than 1,850 hours but less than 1,950, they will be compensated proportionally.

The firm says it hopes the changes will not be carried over into 2010.

Founded in 1904, Hogan & Hartson is the oldest major law firm headquartered in Washington, DC. It is a global firm with more than 1,100 lawyers in 27 offices worldwide, including offices in North America, Latin America, Europe, the Middle East, and Asia.

Patton Boggs Adopts New Compensation System

Erik Even — Mon, 23 Feb 2009 16:59:26 +0000

Washington, DC-based Patton Boggs is adopting a new compensation plan for partners, retooling a long-held “eat-what-you-kill” system to reward partner cooperation and business development.

Under the new structure, which will begin next year, partners will have a percentage of their pay set by an 11-member compensation committee. The committee will examine how well partners refer business to each other, and will also weigh involvement in associate mentoring and training, and whether partners soon to retire are transferring clients to the next generation of lawyers at the firm.

It is not a complete change. Nearly 85% of partners’ compensation will still be based on billables. But it does mark a major change for the firm, which says it wants to encourage partners across practices to cross-sell services to clients.

The changes will apply to the firm’s 119 equity partners; they will not affect the vast majority of the firm’s 111 non-equity partners. The firm has a total of 518 lawyers.

The firm has been working on a review of both the compensation system and firm objectives for roughly two years, and the internal process concluded with a partner vote in December to adopt the new system. More than 90 percent of equity partners voted for the change.

Patton Boggs is a full service law firm with more than 600 lawyers and professionals in nine locations in the United States and the Middle East.

Stanford Law Launches Professional Center

Erik Even — Tue, 03 Feb 2009 17:03:36 +0000

Stanford Law School has launched the Stanford Center on the Legal Profession, which will focus on professional responsibility, leadership development and quality of life issues.

Stanford law professor Deborah L. Rhode will serve as its director. She is the founder and former director of the school’s Center on Ethics.

The Center of the Legal Profession will work to expand services to low and middle income individuals. It will address issues pertaining to the lives of lawyers, including escalating billable hour requirements and diversity in the profession.

In addition, the Center on the Legal Profession will offer interdisciplinary leadership development and continuing legal education leadership programs.

Arent Fox Latest to Freeze Salaries

Erik Even — Sat, 17 Jan 2009 17:00:05 +0000

Washington DC law firm and lobbying group Arent Fox will freeze associate base compensation at the current 2008 rates for 2009.

The firm will also place a 150-hour cap on non-billable creditable hours, that can be increased only in limited circumstances.

Eligible associates who record more than 2050 billable hours, 2150 billable hours, 2250 billable hours, or more than 2350 billable hours will be eligible to receive productivity bonuses.

The National Law Journal ranked the firm as the 137th largest in the US based on number of attorneys. In 2008, the firm was ranked 84th on the Vault 100 survey of the most prestigious firms in the US.

Morgan Lewis Adopts Merit-Based Bonuses

Erik Even — Thu, 08 Jan 2009 18:25:17 +0000

Philadelphia’s Morgan Lewis & Bockius will adopt a merit-based bonus system for associates in 2009.

The firm is doing away with its requirement that associates log 2,000 billable hours in order to receive a bonus, as well as any promises that reaching that mark will ensure a bonus.

We still expect that an associate meeting our expectations will be sufficiently engaged that he or she will have 2,000 billable hours annually (including pro bono hours), and we will give substantial weight to the level of engagement in awarding bonuses. However, having at least or fewer than that number of billable hours in any fiscal year will neither guarantee nor preclude a bonus…

In deciding on bonuses, we will look at the entire picture of an associate’s contribution, including level of engagement, efficiency and value in serving clients, excellence, results achieved, contribution to our culture, participation in our programs, and other factors.

In other words, they’ll give bonuses to whomever they want; and undoubtedly not as many.

The new bonus structure took effect with the start of the 2009 fiscal year on October 1st, 2008, and the change will not affect 2008 bonuses, which the firm has yet to announce.

Cravath Lawyer: Kill the Billable Hour

Erik Even — Fri, 02 Jan 2009 18:04:45 +0000

Evan R. Chesler, a Presiding Partner at New York’s Cravath, Swaine & Moore LLP, has made a bold suggestion in January’s Forbes Magazine: Kill the billable hour.

I’m a trial lawyer. I bill by the hour. So do the associates who work for me. I have lots of clients, so I can pretty much work, and bill, as much as I want. This needs to be fixed. Yes, you read that correctly.

Clients have long hated the billable hour, and I understand why. The hours seem to pile up to fill the available space. The clients feel they have no control, that there is no correlation between cost and quality.

Chesler compares what he does to what a contractor does — except the contractor gives you an estimate, and then sticks to it. If the contractor gets the job done quickly, he makes more money — if there are problems, he makes less.

So what am I proposing? For reasonable periods of time during the life of a lawsuit, say three months at a time, I should do what [a contractor] does: identify the client’s objectives, measure, calculate, build in a contingency and come back with a price. Once the price has been agreed upon, the billable hour should be irrelevant. The client will no longer be surprised by a whopper bill and met by the standard (albeit true) explanation that “litigation is unpredictable.”

Read the whole article.

Via State Policy Blog and The Los Angeles Examiner.

Female Partners in DC Firms Take More Part-Time Hours Than Men

Erik Even — Mon, 29 Dec 2008 18:10:07 +0000

An interesting story at the DC Examiner, about the results of a study from the National Association for Law Placement:

Female partners in DC law firms are taking part-time hours at nearly three times the rate that men are, a new study has found.There are nearly 6,000 partners in 131 big law firm offices in Washington, the nation’s second-largest law market. Less than 5 percent of the partners are part-timers, but women make up nearly three-quarters of the part-time ranks...

Less than 2 percent of New York partners are working part time and of those, about two-thirds are women…

The study suggests that women, even big time professional women laywers, still do the bulk of family care. Fourteen percent of all US workers hold part-time positions, including in the professions of engineering, architecture and medicine.

But lawyers make their money from billable hours, and its almost impossible to make partner if you’re not working every hour you can.

Read the original story.