That law firm is cheating you... Naw, really?
The Tyranny of the Billable Hour
By STEVEN J. HARPER, NYT
WILMETTE, Ill.
“THAT bill shall know no limits,” wrote one DLA Piper lawyer to another in 2010 in what the firm is now calling “unfortunate banter” between associates about work for a client. But what is truly unfortunate is the underlying billable-hour regime and the law-firm culture it has spawned.
Lost in the furor surrounding one large firm’s current public relations headache are deeper problems that go to the heart of the prevailing big law-firm business model itself. Regrettably, as with previous episodes that have produced high-profile scandals, the present outcry will probably pass and the billable hour will endure.
It shouldn’t. The billable-hour system is the way most lawyers in big firms charge clients, but it serves no one. Well, almost no one. It brings most equity partners in those firms great wealth. Law firm leaders call it a leveraged pyramid. Most associates call it a living hell.
In a typical large firm, associates earn far less than the client revenues they generate. For example, a client receives an invoice totaling the number of hours each lawyer spends on the client’s matters, multiplied by the lawyer’s hourly rate, say $400 for a junior associate. Most big firms require associates to bill at least 1,900 hours a year, according to a survey last year by NALP, the Association for Legal Career Professionals.
(More here.)
WILMETTE, Ill.
“THAT bill shall know no limits,” wrote one DLA Piper lawyer to another in 2010 in what the firm is now calling “unfortunate banter” between associates about work for a client. But what is truly unfortunate is the underlying billable-hour regime and the law-firm culture it has spawned.
Lost in the furor surrounding one large firm’s current public relations headache are deeper problems that go to the heart of the prevailing big law-firm business model itself. Regrettably, as with previous episodes that have produced high-profile scandals, the present outcry will probably pass and the billable hour will endure.
It shouldn’t. The billable-hour system is the way most lawyers in big firms charge clients, but it serves no one. Well, almost no one. It brings most equity partners in those firms great wealth. Law firm leaders call it a leveraged pyramid. Most associates call it a living hell.
In a typical large firm, associates earn far less than the client revenues they generate. For example, a client receives an invoice totaling the number of hours each lawyer spends on the client’s matters, multiplied by the lawyer’s hourly rate, say $400 for a junior associate. Most big firms require associates to bill at least 1,900 hours a year, according to a survey last year by NALP, the Association for Legal Career Professionals.
(More here.)
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