I don’t know how many of my fellow NDLS 2Ls are still reading my blog regularly during the summer, but those who are — especially the ones who are summering in big law firms — will probably find this article about the economics of associate salaries interesting.
I can’t think of any baby lawyer who’s worth six figures straight out of law school. That’s any lawyer, from any school, with any grades, in any city, at any firm.
Maybe, just maybe, by the time you’ve practiced five years or so you’ve developed a good enough client rapport and skills commensurate with six figures.
Pushing $150K for a new associate? Are you freaking kidding me?
At what kind of rate do they have to bill your time? $500 an hour? Do you really think that because you sat through 3 years of law school, bar review, and a bar exam that you’re worth $500 an hour?
Ok. I’m better now. Venting over. Maybe I just need to go back to law school again so I can become a first year associate somewhere instead of a senior associate.
It simply amazes me sometimes. There can’t be that much of a shortage of lawyers out there, so I can’t figure out how there’s enough demand to warrant the salaries.
As a possible future first-year associate (knock on wood) who won’t be making $150K but will, if I get the job, be making vastly more than I’m objectively worth, I agree with you… but I ain’t complainin’. :)
Recent NDLS Grad Joe La Rue (in association with Professor Caveny) has published a note in the ND Journal of Law Ethics and Public Police on topic. “Redeeming the Lawyer’s Tine”. 20 NDJLEPP 473
There are a lot of poor lawyers in DC. (and New York. and…)
As I hear it (and feel free to contradict me, as my sources aren’t that solid) a lot of people end up going to crappy law schools and just squeak by and end up doing lots of other things besides lawyer’ing. :)
I’m assuming you lost some portion of your post, but for the record, $150K/1800 = $83.33.
That said, 1800 hours? Hahahahaha. Without going into any details about my firm in particular (no blogging about work!) … generally speaking, the big firms in Phoenix aren’t paying anywhere near $150K, and they require in the neighborhood of 1850-2000 hours. I would assume, even allowing for cost-of-living adjustments (New York is a much more expensive place to live than Phoenix, obviously), that the $150K firms require significantly more hours.
New York is the bogeyman of big-firm billable-hours nightmare stories, of course, but one hears numbers like 2,400 and 2,500 bantied about all the time. I have no idea how that’s even possible, but whatever. (For the non-lawyer types: 2,500 billable hours is 50 hours per week if you work 50 weeks a year, which doesn’t sound unreasonable, but that’s how much time you’re billing, not how much time you’re working. I don’t have personal experience to draw from yet, but the estimates I hear in terms of how much of your time at work you actually bill range from 90% to 50%. So 50 hours would actually translate between 55 and 100 hours per week… not including commuting time, of course. I’m guessing 70 is about normal, myself. For me personally, it might be more like 75 or 80, once you consider the non-billable time I’ll inevitably waste at work doing things like commenting on my blog… hehe. But I’ll defer to DrawingDead and others with more experience on what the real number is. Or perhaps my one NDLS friend who is working at White & Case in New York this summer — who shall remain nameless unless he decides to identify himself as such — might have some thoughts. P.S. Holy cow, White & Case.)
“In a perfect world,” Stewart said, “third- and fourth-year associates would earn about what first-years do now, which, in turn, would enable fifth- and sixth-year associates to receive compensation more in line with their contributions.”
Because of the inverted salary scale, Lathrop & Gage, though it has grown from two to nine offices in the last several years, is hiring a relatively smaller number of new associates, Stewart said, and instead looking for more seasoned candidates.
“The real competition is finding laterals with two to four years of experience,” he said.
Inflated first-year associate salaries also can lead to what Hildebrandt International’s Henning calls a “diminution of the work experience” that new attorneys receive. In an effort to justify the higher pay, law firms make higher productivity demands on first-year lawyers, which leads to burnout, especially if a shortage of talent means firms are having to do more with fewer people.
This is why people who are getting their JDs should stop and at least complete half a MBA program first.
“At what kind of rate do they have to bill your time? $500 an hour? Do you really think that because you sat through 3 years of law school, bar review, and a bar exam that you’re worth $500 an hour?”
Well, before I went to law school I was working for a political consulting firm that billed my time at $150 an hour. Seems right to me that 3 years of law school, bar review and a bar exam would justify a not-insignificant increase in my rate.
“I can’t think of any baby lawyer who’s worth six figures straight out of law school. That’s any lawyer, from any school, with any grades, in any city, at any firm.
Maybe, just maybe, by the time you’ve practiced five years or so you’ve developed a good enough client rapport and skills commensurate with six figures.”
You’re attaching an intrinsic level of worth to the number. Don’t. First-year associates are worth what the firms are able and willing to pay them, which in turn is determined by the number of paying clients they have, the amount of business those clients are bringing, and how much those clients are willing to pay. If those economic factors support these salaries (which, as I acknowledge and the article itself discusses, is an open question), then yes, “baby” lawyers are indeed “worth” six figures.
“for the record, $150K/1800 = $83.33.”
Sure, but that covers only salary. Don’t forget health benefits, short and long term disability benefits, life insurance, whatever other employer-paid benefits there are, and employer share of payroll taxes (every dime FICA withholds from you is matched by your employer). For ease of figuring, let’s say all that adds another 50K onto the salary. We’re at 200K.
Hey, how about that nice desk, designer appointments, laptop, Blackberry, art on the walls, beautiful building, electricity, public utilities, etc. etc.? Let’s just tack on another 20K per associate in overhead. 220K.
How about all those secretaries filing and typing and entering timesheets into the database? Couriers and mailroom people and document services people and tech people and custodial people and cafeteria people and all sorts of people who don’t bill but still draw a salary and benefits and need payroll taxes paid? Conservatively, let’s attribute another 50K per associate to cover these people. 270K.
And of course, partners want there to be profit left over after all the bills are paid. Let’s just meagerly round up to 300K.
So if a firm needs to recover 300K from a first-year associate in order to cover his salary, all the overhead and other expenses noted, and still have some profit left over to mix in with the revenues from the partners’ billable rates, that still works out to just $166.67 per hour at 1800 hours per year.
I remind you once again that I was billing $150/hour two years ago in a job that didn’t require a professional degree.
And then, of course, Brendan’s point that 1800 is a pretty low benchmark is also well taken.
“I guarantee the W&C guy isn’t worth that kind of $. Sorry, “namelessâ€?. ”
I’m not really sure waht this is referring to, since I saw no reference to Williams & Connolly in the linked article. But if you’re referencing the fact that W&C has long been “ahead” of the pay curve, that is true only because W&C traditionally pays more in base salary, and does not do much (if any) year-end bonus. So while at most firms a first-year might get 125-135 base, and then a 10-20K bonus, at W&C they just get 140-150K base, and that’s it. It all works out the same, roughly.
So, I think the moral of the story is, lawyers are expensive.
Tomorrow’s lesson: the sky is blue. :)
Oh, and W&C refers to White & Case. The context was my comment, “Or perhaps my one NDLS friend who is working at White & Case in New York this summer â€â€? who shall remain nameless unless he decides to identify himself as such â€â€? might have some thoughts [on typical NYC billable hours requirements].”
Raging free market guy that I am, I’m all for everyone making the most money that he/she can, getting clients to pay too much for your skills, etc. If the market will bear it, more power to ya.
As far as how much an associate has to bill to justify his/her own existence with a firm, it’s typically broken down in thirds. One-third of your billing goes to your compensation package (salary, insurance, taxes on same, etc), one-third of your compensation goes to your percentage of the office/firm overhead (physical facilities, supplies, staff, etc.), with the final third being tucked away into the pockets of the partners.
If your gross wages are $150K/yr, by the time you add in your non-salary compensation and employer’s share of taxes, you’re likely over $200K in compensation quite easily. You’d need to bill out and collect something north of $600K in fees.
While my $500 an hour rate is high, it was more a criticism of the absurdity of the whole thing than actually trying to put a number on it. So fine, by the “math” above, at 2000 hours a year, you’d need to be charging out at $300 an hour. Still too much for pretty much any baby lawyer.
The fact that you charged $150 an hour when you weren’t a lawyer is simply a non sequitur. There are plenty of folks who can (and do) charge $150 an hour for their time without having gone to law school (ever call a plumber at midnight on a weekend?). That still does not mean that a newly minted baby lawyer is worth it.
As a third-year associate who has only worked for a law firm for one year (thank you clerkship!), I agree with the sentiment that new associates are not generally worth their billing rates. I certainly am not worth mine :-) That said, it’s what the market will bear. If your clients are happy with the work and aren’t fretting over the bill, then who cares. Moreover, when you factor in having to deal on a daily basis with the obnoxious, condescending and bellicose personalities that tend to populate the legal field above other fields (whether they be in your firm or opposing counsel’s), it puts the remuneration in the proper perspective.
While I definitely see your point, Joe, I have a feeling that the spectre of $150K/year lawyers complaining about the nasty nasty hobbitses that they are required to work with on a daily basis will get about as much sympathy as Britney Spears tearfully pleading for privacy. :)
Ah, I was showing my DC bias then, assuming W&C meant Williams & Connolly and totally missing White & Case. Sorry.
DrawingDead: point taken that your 500 figure was not an actual attempt at a reasonable guess. I’m happy to go along with your rule of thirds. My main intent in going through all that stuff was more to counter Brendan’s implication that 150K and 1800 billables would require a billable rate of “only” $83/hour.
I’m still not sure I understand what objective absolute standard you’re using to determine whether a “baby lawyer” is “worth” their salary/billable rate or not. Seems to me that if they weren’t worth it, they wouldn’t get paid that much. Simple as that.
As for my non sequitur, you go on to make exactly the same point that I intended: depending on your needs, you may very well think it is “worth it” to pay someone a lot of money for their time. Whether a lawyer, plumber, or political consultant, if their services are “worth it” to you, you’ll pay it. I’d argue that it’s generally accepted among the corporate interests paying for legal services that lawyers are “worth” a lot, certainly more than plumbers and political consultants. Knowing that those interests pay $150/hour for something they value less, why should it be surprising, or objectively wrong, that they pay more for something they value more?
1800 hours of billable time? As someone who has spent years in an industry that uses billable hours, 1800 is a pipe dream, especially if you are first year anything.
Figure this. Say you work about 48 weeks a year (taking out your two weeks of vacation, sick time, holidays, etc). In all, 1800 hours only works out to 37.5 hours a week. Now, some firm will tell you that the rest of the 40+ hours will be admin time, etc. That’s bullshit.
What you will really be billing is 70 hours a week - at a minimum - because that is how the firm makes its money. You could be getting coffee for the office or making copies and still bill the client whatever your billable rate is (say $250 an hour starting out).
That means you will be billing more like 3,300 hours a year. So if you do the math: $150,000 divided by 3,300 = $45 an hour. This means the Partners pocket $205 for every hour you work.
However, this is true with the larger firms. I believe the bulk of law firms aren’t going to pay you anything near six figures starting out (Though with a law degree from Notre Dame, chances are you won’t be working for the bulk of law firms).
Perhaps this is true with regard to New York, L.A. or Chicago firms, but I’ve spoken to literally dozens of attorneys in big Phoenix firms — from first-year associates to senior partners — and NO ONE has even hinted that the stated billable requirements are a “pipe dream.” On the contrary, everyone emphasized that the billable hours requirements are genuine and realistic. When I asked specific people about what they personally billed last year, or in their first year, etc., none of the answers were outrageous. Phoenix’s whole law-firm culture is genuinely different than in the larger cities. The firms emphasize retaining their attorneys, rather than working them to death, squeezing the maximum possible amount of money out of them, and in the process causing a huge number to burn out in the first few years. There is also a strong emphasis on the attorneys being well-rounded people and having time for their families. It’s easy to understand why: there are tons of Mormons and Catholics in the Phoenix legal market, so family is strongly emphasized. There are tons of individuals examples that I won’t go into, but trust me, this isn’t bulls**t, it’s how things really work in Phoenix.
I’m sure you think I’m “naive” for believing anything that I’m told. You’re wrong. I came into this whole process with a very skeptical eye. I was worried that I’d be unable to see Becky’s and my kids (God willing) grow up because I’d be living in the firm. Talking to numerous individuals about their individual experiences convinced me that the Phoenix legal market and culture is perfect for someone like me.
Oh, and whatever company that you worked for, that told you to bill $250 an hour to the client for getting coffee? I’ll keep working for a company that actually has a remotely active sense of ethics, thank you very much.
“‘you will be billing more like 3,300 hours a year’
Perhaps this is true with regard to New York, L.A. or Chicago firms”
It’s not even true there. I don’t know what MM is talking about, but it’s certainly not a general or even typical experience, according to the literally dozens of partners and associates I’ve spoken to — in DC. Not to mention Prof. Velasco’s “Life in a Big Firm” presentation, in which he tells us exactly how many hours he billed each year he was in private practice in New York. (I believe the numbers were something like 2100 the first year, 2400 the second year, 2600 the third year, 3200 the fourth year, and then something much less the fifth and final year.)
While 1800 is definitely pretty low for the big cities, their “announced” targets are usually in the 1950-2100 range. If we’re talking a Kirkland or Skadden that considers their target a floor, then the more realistic range is 2200-2300.
And I agree with Brendan — no firm I’m aware of, certainly not the one I’m working for this summer, is going to bill the client for internal office/administrative stuff.
It’s definitely true that there’s a difference between hours billed and hours worked; but as I’ve had it repeatedly explained to me, the problem is not meeting the billable requirement itself, it’s fulfilling all the non-billable responsibilities during the day (administrative stuff, committee meetings, etc.) that require the longer hours on evenings and weekends to stay on track with billables.
But in no situation that I’m aware of do you a) work 70+ hours a week, AND b) bill 100% of that time. That’s almost certainly a literal impossibility, given that people do have to eat and go to the restroom and pick up their drycleaning and call the credit card company about a suspect charge and myriads of other little things throughout the day that nobody in their right mind would report on their timesheet, let alone bill a client for.
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June 14th, 2006 at 11:17:54 pm
I can’t think of any baby lawyer who’s worth six figures straight out of law school. That’s any lawyer, from any school, with any grades, in any city, at any firm.
Maybe, just maybe, by the time you’ve practiced five years or so you’ve developed a good enough client rapport and skills commensurate with six figures.
Pushing $150K for a new associate? Are you freaking kidding me?
At what kind of rate do they have to bill your time? $500 an hour? Do you really think that because you sat through 3 years of law school, bar review, and a bar exam that you’re worth $500 an hour?
Ok. I’m better now. Venting over. Maybe I just need to go back to law school again so I can become a first year associate somewhere instead of a senior associate.
It simply amazes me sometimes. There can’t be that much of a shortage of lawyers out there, so I can’t figure out how there’s enough demand to warrant the salaries.
June 14th, 2006 at 11:35:21 pm
As a possible future first-year associate (knock on wood) who won’t be making $150K but will, if I get the job, be making vastly more than I’m objectively worth, I agree with you… but I ain’t complainin’. :)
June 15th, 2006 at 4:23:00 am
Recent NDLS Grad Joe La Rue (in association with Professor Caveny) has published a note in the ND Journal of Law Ethics and Public Police on topic. “Redeeming the Lawyer’s Tine”. 20 NDJLEPP 473
June 15th, 2006 at 4:23:24 am
Lawyer’s Time
June 15th, 2006 at 4:54:56 am
There are a lot of poor lawyers in DC. (and New York. and…)
As I hear it (and feel free to contradict me, as my sources aren’t that solid) a lot of people end up going to crappy law schools and just squeak by and end up doing lots of other things besides lawyer’ing. :)
June 15th, 2006 at 6:43:20 am
Assuming a first year bills 1800 hours a year, the firm need only bill him out at
June 15th, 2006 at 7:46:16 am
I’m assuming you lost some portion of your post, but for the record, $150K/1800 = $83.33.
That said, 1800 hours? Hahahahaha. Without going into any details about my firm in particular (no blogging about work!) … generally speaking, the big firms in Phoenix aren’t paying anywhere near $150K, and they require in the neighborhood of 1850-2000 hours. I would assume, even allowing for cost-of-living adjustments (New York is a much more expensive place to live than Phoenix, obviously), that the $150K firms require significantly more hours.
New York is the bogeyman of big-firm billable-hours nightmare stories, of course, but one hears numbers like 2,400 and 2,500 bantied about all the time. I have no idea how that’s even possible, but whatever. (For the non-lawyer types: 2,500 billable hours is 50 hours per week if you work 50 weeks a year, which doesn’t sound unreasonable, but that’s how much time you’re billing, not how much time you’re working. I don’t have personal experience to draw from yet, but the estimates I hear in terms of how much of your time at work you actually bill range from 90% to 50%. So 50 hours would actually translate between 55 and 100 hours per week… not including commuting time, of course. I’m guessing 70 is about normal, myself. For me personally, it might be more like 75 or 80, once you consider the non-billable time I’ll inevitably waste at work doing things like commenting on my blog… hehe. But I’ll defer to DrawingDead and others with more experience on what the real number is. Or perhaps my one NDLS friend who is working at White & Case in New York this summer — who shall remain nameless unless he decides to identify himself as such — might have some thoughts. P.S. Holy cow, White & Case.)
June 15th, 2006 at 12:26:34 pm
“In a perfect world,” Stewart said, “third- and fourth-year associates would earn about what first-years do now, which, in turn, would enable fifth- and sixth-year associates to receive compensation more in line with their contributions.”
Because of the inverted salary scale, Lathrop & Gage, though it has grown from two to nine offices in the last several years, is hiring a relatively smaller number of new associates, Stewart said, and instead looking for more seasoned candidates.
“The real competition is finding laterals with two to four years of experience,” he said.
Inflated first-year associate salaries also can lead to what Hildebrandt International’s Henning calls a “diminution of the work experience” that new attorneys receive. In an effort to justify the higher pay, law firms make higher productivity demands on first-year lawyers, which leads to burnout, especially if a shortage of talent means firms are having to do more with fewer people.
This is why people who are getting their JDs should stop and at least complete half a MBA program first.
June 15th, 2006 at 2:44:58 pm
I guarantee the W&C guy isn’t worth that kind of $. Sorry, “nameless”.
June 15th, 2006 at 8:54:51 pm
“At what kind of rate do they have to bill your time? $500 an hour? Do you really think that because you sat through 3 years of law school, bar review, and a bar exam that you’re worth $500 an hour?”
Well, before I went to law school I was working for a political consulting firm that billed my time at $150 an hour. Seems right to me that 3 years of law school, bar review and a bar exam would justify a not-insignificant increase in my rate.
“I can’t think of any baby lawyer who’s worth six figures straight out of law school. That’s any lawyer, from any school, with any grades, in any city, at any firm.
Maybe, just maybe, by the time you’ve practiced five years or so you’ve developed a good enough client rapport and skills commensurate with six figures.”
You’re attaching an intrinsic level of worth to the number. Don’t. First-year associates are worth what the firms are able and willing to pay them, which in turn is determined by the number of paying clients they have, the amount of business those clients are bringing, and how much those clients are willing to pay. If those economic factors support these salaries (which, as I acknowledge and the article itself discusses, is an open question), then yes, “baby” lawyers are indeed “worth” six figures.
“for the record, $150K/1800 = $83.33.”
Sure, but that covers only salary. Don’t forget health benefits, short and long term disability benefits, life insurance, whatever other employer-paid benefits there are, and employer share of payroll taxes (every dime FICA withholds from you is matched by your employer). For ease of figuring, let’s say all that adds another 50K onto the salary. We’re at 200K.
Hey, how about that nice desk, designer appointments, laptop, Blackberry, art on the walls, beautiful building, electricity, public utilities, etc. etc.? Let’s just tack on another 20K per associate in overhead. 220K.
How about all those secretaries filing and typing and entering timesheets into the database? Couriers and mailroom people and document services people and tech people and custodial people and cafeteria people and all sorts of people who don’t bill but still draw a salary and benefits and need payroll taxes paid? Conservatively, let’s attribute another 50K per associate to cover these people. 270K.
And of course, partners want there to be profit left over after all the bills are paid. Let’s just meagerly round up to 300K.
So if a firm needs to recover 300K from a first-year associate in order to cover his salary, all the overhead and other expenses noted, and still have some profit left over to mix in with the revenues from the partners’ billable rates, that still works out to just $166.67 per hour at 1800 hours per year.
I remind you once again that I was billing $150/hour two years ago in a job that didn’t require a professional degree.
And then, of course, Brendan’s point that 1800 is a pretty low benchmark is also well taken.
“I guarantee the W&C guy isn’t worth that kind of $. Sorry, “namelessâ€?. ”
I’m not really sure waht this is referring to, since I saw no reference to Williams & Connolly in the linked article. But if you’re referencing the fact that W&C has long been “ahead” of the pay curve, that is true only because W&C traditionally pays more in base salary, and does not do much (if any) year-end bonus. So while at most firms a first-year might get 125-135 base, and then a 10-20K bonus, at W&C they just get 140-150K base, and that’s it. It all works out the same, roughly.
June 16th, 2006 at 12:27:44 am
So, I think the moral of the story is, lawyers are expensive.
Tomorrow’s lesson: the sky is blue. :)
Oh, and W&C refers to White & Case. The context was my comment, “Or perhaps my one NDLS friend who is working at White & Case in New York this summer â€â€? who shall remain nameless unless he decides to identify himself as such â€â€? might have some thoughts [on typical NYC billable hours requirements].”
June 16th, 2006 at 5:35:52 am
Raging free market guy that I am, I’m all for everyone making the most money that he/she can, getting clients to pay too much for your skills, etc. If the market will bear it, more power to ya.
As far as how much an associate has to bill to justify his/her own existence with a firm, it’s typically broken down in thirds. One-third of your billing goes to your compensation package (salary, insurance, taxes on same, etc), one-third of your compensation goes to your percentage of the office/firm overhead (physical facilities, supplies, staff, etc.), with the final third being tucked away into the pockets of the partners.
If your gross wages are $150K/yr, by the time you add in your non-salary compensation and employer’s share of taxes, you’re likely over $200K in compensation quite easily. You’d need to bill out and collect something north of $600K in fees.
While my $500 an hour rate is high, it was more a criticism of the absurdity of the whole thing than actually trying to put a number on it. So fine, by the “math” above, at 2000 hours a year, you’d need to be charging out at $300 an hour. Still too much for pretty much any baby lawyer.
The fact that you charged $150 an hour when you weren’t a lawyer is simply a non sequitur. There are plenty of folks who can (and do) charge $150 an hour for their time without having gone to law school (ever call a plumber at midnight on a weekend?). That still does not mean that a newly minted baby lawyer is worth it.
June 16th, 2006 at 6:28:20 am
As a third-year associate who has only worked for a law firm for one year (thank you clerkship!), I agree with the sentiment that new associates are not generally worth their billing rates. I certainly am not worth mine :-) That said, it’s what the market will bear. If your clients are happy with the work and aren’t fretting over the bill, then who cares. Moreover, when you factor in having to deal on a daily basis with the obnoxious, condescending and bellicose personalities that tend to populate the legal field above other fields (whether they be in your firm or opposing counsel’s), it puts the remuneration in the proper perspective.
June 16th, 2006 at 8:03:14 am
While I definitely see your point, Joe, I have a feeling that the spectre of $150K/year lawyers complaining about the nasty nasty hobbitses that they are required to work with on a daily basis will get about as much sympathy as Britney Spears tearfully pleading for privacy. :)
June 16th, 2006 at 6:54:36 pm
Ah, I was showing my DC bias then, assuming W&C meant Williams & Connolly and totally missing White & Case. Sorry.
DrawingDead: point taken that your 500 figure was not an actual attempt at a reasonable guess. I’m happy to go along with your rule of thirds. My main intent in going through all that stuff was more to counter Brendan’s implication that 150K and 1800 billables would require a billable rate of “only” $83/hour.
I’m still not sure I understand what objective absolute standard you’re using to determine whether a “baby lawyer” is “worth” their salary/billable rate or not. Seems to me that if they weren’t worth it, they wouldn’t get paid that much. Simple as that.
As for my non sequitur, you go on to make exactly the same point that I intended: depending on your needs, you may very well think it is “worth it” to pay someone a lot of money for their time. Whether a lawyer, plumber, or political consultant, if their services are “worth it” to you, you’ll pay it. I’d argue that it’s generally accepted among the corporate interests paying for legal services that lawyers are “worth” a lot, certainly more than plumbers and political consultants. Knowing that those interests pay $150/hour for something they value less, why should it be surprising, or objectively wrong, that they pay more for something they value more?
June 17th, 2006 at 10:16:05 am
1800 hours of billable time? As someone who has spent years in an industry that uses billable hours, 1800 is a pipe dream, especially if you are first year anything.
Figure this. Say you work about 48 weeks a year (taking out your two weeks of vacation, sick time, holidays, etc). In all, 1800 hours only works out to 37.5 hours a week. Now, some firm will tell you that the rest of the 40+ hours will be admin time, etc. That’s bullshit.
What you will really be billing is 70 hours a week - at a minimum - because that is how the firm makes its money. You could be getting coffee for the office or making copies and still bill the client whatever your billable rate is (say $250 an hour starting out).
That means you will be billing more like 3,300 hours a year. So if you do the math: $150,000 divided by 3,300 = $45 an hour. This means the Partners pocket $205 for every hour you work.
However, this is true with the larger firms. I believe the bulk of law firms aren’t going to pay you anything near six figures starting out (Though with a law degree from Notre Dame, chances are you won’t be working for the bulk of law firms).
June 17th, 2006 at 10:37:17 am
you will be billing more like 3,300 hours a year
Perhaps this is true with regard to New York, L.A. or Chicago firms, but I’ve spoken to literally dozens of attorneys in big Phoenix firms — from first-year associates to senior partners — and NO ONE has even hinted that the stated billable requirements are a “pipe dream.” On the contrary, everyone emphasized that the billable hours requirements are genuine and realistic. When I asked specific people about what they personally billed last year, or in their first year, etc., none of the answers were outrageous. Phoenix’s whole law-firm culture is genuinely different than in the larger cities. The firms emphasize retaining their attorneys, rather than working them to death, squeezing the maximum possible amount of money out of them, and in the process causing a huge number to burn out in the first few years. There is also a strong emphasis on the attorneys being well-rounded people and having time for their families. It’s easy to understand why: there are tons of Mormons and Catholics in the Phoenix legal market, so family is strongly emphasized. There are tons of individuals examples that I won’t go into, but trust me, this isn’t bulls**t, it’s how things really work in Phoenix.
I’m sure you think I’m “naive” for believing anything that I’m told. You’re wrong. I came into this whole process with a very skeptical eye. I was worried that I’d be unable to see Becky’s and my kids (God willing) grow up because I’d be living in the firm. Talking to numerous individuals about their individual experiences convinced me that the Phoenix legal market and culture is perfect for someone like me.
Oh, and whatever company that you worked for, that told you to bill $250 an hour to the client for getting coffee? I’ll keep working for a company that actually has a remotely active sense of ethics, thank you very much.
June 17th, 2006 at 4:21:43 pm
“‘you will be billing more like 3,300 hours a year’
Perhaps this is true with regard to New York, L.A. or Chicago firms”
It’s not even true there. I don’t know what MM is talking about, but it’s certainly not a general or even typical experience, according to the literally dozens of partners and associates I’ve spoken to — in DC. Not to mention Prof. Velasco’s “Life in a Big Firm” presentation, in which he tells us exactly how many hours he billed each year he was in private practice in New York. (I believe the numbers were something like 2100 the first year, 2400 the second year, 2600 the third year, 3200 the fourth year, and then something much less the fifth and final year.)
While 1800 is definitely pretty low for the big cities, their “announced” targets are usually in the 1950-2100 range. If we’re talking a Kirkland or Skadden that considers their target a floor, then the more realistic range is 2200-2300.
And I agree with Brendan — no firm I’m aware of, certainly not the one I’m working for this summer, is going to bill the client for internal office/administrative stuff.
It’s definitely true that there’s a difference between hours billed and hours worked; but as I’ve had it repeatedly explained to me, the problem is not meeting the billable requirement itself, it’s fulfilling all the non-billable responsibilities during the day (administrative stuff, committee meetings, etc.) that require the longer hours on evenings and weekends to stay on track with billables.
But in no situation that I’m aware of do you a) work 70+ hours a week, AND b) bill 100% of that time. That’s almost certainly a literal impossibility, given that people do have to eat and go to the restroom and pick up their drycleaning and call the credit card company about a suspect charge and myriads of other little things throughout the day that nobody in their right mind would report on their timesheet, let alone bill a client for.