Firm Decides To Put Billable Hours On Hold
posted by Deven Desai
The cry that the billable hour is dead or makes little sense seems to go up every year with little action taken, but Ford & Harrison, a good-sized firm in Atlanta, has taken the idea to heart and decided to suspend its minimum billable hour requirement for first year associates. The firm claims that first year associates will have more time to train without worrying about whether they meet the billable minimums. As such they will be able “to spend their time observing depositions and witness interviews and attending hearings and litigation strategy meetings.” If it works, the idea should keep clients happy as well (a stated goal of the program). The firm pays $125,000 for incoming associates which is less than the $160,000 large firms in larger markets pay. Still I wonder whether a large firm could emulate the model to its advantage. Of course the cost of law school and living costs in a large city matter, but I wonder whether a first year would take the lower pay if it meant less billable hours and more training.
Now, before law students get excited by the idea of less work, consider that the amount of work could be the same or even increase. The key difference is the quality of the work may improve. After all those who end up on a year-long document review could bill eight to ten hours a day, be paid well, and have less stress. In contrast, the model Ford & Harrison is using is based on medical training. Those folks are paid much less, work quite hard, and then are rewarded with more of the same if they want to specialize. I think the analog to medicine has flaws (for one thing patient and client management do not map onto to each other all that well). Nonetheless, the idea that one could have a slightly more sane life, enjoy the job, and not worry that the learning and training one must have in the first year—if not years—of practice were somehow counterproductive, is a great one. Hopefully, Ford & Harrison will lead the way. It’s an idea to watch.
August 26, 2007 at 2:31 pm
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Responses (2)
Joe - August 26, 2007 at 6:20 pm
My question is who is doing the billable work that first years are no longer doing? If the work is being pushed off to someone else, then client bills will go up (unless second and third years are much more efficient, which I doubt). But if nobody is doing the extra work, doesn’t that mean that first years were just doing superfluous work in the first place?
Deven - August 26, 2007 at 11:16 pm
Good question. One of the standard stories told is that firms write off much of the work first year associates do because of the training issue. I doubt that the story is true but as I have never managed a bill going out to the client, I don’t know for certain. Still, I think the idea is that first years would now be able to do the work they would do in any event but that would not be billed to the client (or would be billed but the client may object). In theory a more senior associate (say a third to fifth year associate) would cost more per hour but would require less supervision (less partner billed hours), require less time, and require less revision of writing (reduced senior associate or partner billing again).
I suppose another way of putting it is yes, clients might argue that first year associate work is almost superfluous or at least quite inefficient. As such they might rather see a more expensive biller doing work faster than a junior person having to take many more hours to do the work because they are learning. Of course this view depends on the work at issue. In addition, clients’ seemed to be more upset about Westlaw or Lexis charges than reasonable because of the sticker shock. The odd part was that using the online services often was more efficient than pulling the directories; not always but often.
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