Medium- and small-sized law firms have pretty much the same problems with payables and billable hours, but on a less dramatic stage and cast of characters. NALP is able to analyze the information reported in NALP`s Legal Employer Directory and produces an annual report entitled Patterns & Practices: Measures of Law Firm Hiring, Leverage, and Billable Hours. This report presents key findings not only on hours worked and billable requirements, but also on hiring trends for entry-level employees, summer employees and lateral newcomers, summer program results, and partner-to-partner ratios or leverage. Patterns & Practices contains nationwide figures and information by company size, region, and for more than 40 cities and states represented in the directory. Summary tables with the main findings are also included, and one of these tables from the recently published Patterns & Practices is presented on the opposite page. About the results: Working at a law firm can be different for everyone. Learn what this can look like from a lawyer who has experienced (almost) everything. You`ll sometimes read stories about remarkable hours – say, the local lawyer who billed 5,500 hours. This is not the real story. The real story is “soft padding”. While 50% of a firm`s lawyers add 0.50 to 0.75 hours per day to their time records, 8-15% of partners` net profits come from incorrect time entries.
If your compensation is tied to hours, you can round up rather than down. It is as if you have the right to evaluate yourself in law school. This is a troubling problem that many lawyers do not want to acknowledge. How much do employees have to work? (NALP Bulletin, April 2007) — Analyses of total billable and billable hours, billable hours required and pro bono hours. Adam Pascarella, in an article giving advice to junior associates, listed setting your goals as the first order of the day to decide the big right. There are several scenarios. If she plans to stay and become a partner, she must go beyond the billable hours required and excel in other areas of the firm. In addition, the hours only get longer as she climbs the ladder to partner status. According to the National Association for Law Placement, the average number of billable time required by an employee in the first year is 1,892 hours for the last year listed, 2016. However, the average number of billable hours required for first-year employees in firms with more than 700 lawyers is 1,930 hours. Employees who bill for 2,500 hours or more fall into one or more of the following categories: When we look at the complexity of the typical career path for lawyers, it is obvious that lawyers work just as much. There is so much to do – from meeting billable hours requirements, managing clients, presenting to court and preparing the case.
With the workload comes a lot of pressure to do with long hours to do everything. Of course, there are costs for employees. Many companies no longer have the option to wait year-round to determine whether or not an employee needs their billable hours. If the employee is not on track within three to six months, they can be fired. Typical paying hours in mega-corporations and large corporations are 2,000 to 2,100 per year. However, the typical employee who is “looking for” a partnership – an ambitious prime-time player – will likely charge 2,300 to 2,400 hours per year. Typical partner working hours for the same companies are at the same level – and when you factor in the time partners spend on business development, customer management, and business management, their total time is typically greater than the total time spent on employees. The message to students: if you become a partner, you will work harder. And the best will work harder. Harsh but true facts that students should understand before dipping their toes into the professional pond of private practice. The lesson is that if an employee wants to play the first year, they really have to take it out of the park to meet the required hours.
These salaries at Big Law are softer than ever. Milbank, Tweed, Hadley & McCloy announced in June that they would increase their pay rates and set the bar for their first-year employees at $190,000. Other large law firms have followed suit, so most are now reaching that salary, while the rest are fairly close to that number. Students worry about hours. This also applies to businesses. You will hear anecdotes and tell stories twice about monstrous hours. You`ll hear that Smith & Jones is a sweatshop, but Arnold and Baker is a relaxed place. Most lawyers are hard by nature and will work hard no matter where they practice. You will work many hours beyond client hours to manage the practice, train yourself and others, stay current in your field, market and manage the business.
Billable Hours Requirements in Law Firms (NALP Bulletin, May 2006) — One of the most sought-after wage measures by law firms is the billable hours requirement. For a law firm, the requirement says a lot not only about the standards, but also about the culture of the firm. A Look at Associate Hours and at Law Firm Pro Bono Programs (NALP Bulletin, April 2010) — While expectations for billable hours have increased over the years, analyses based on the NCAP`s 2009-2010 Legal Employer Directory show that a requirement of 2,000 billable hours per year is still not typical. and while it`s not possible to track changes in individual businesses and offices, a 2,000-hour requirement has only become slightly more common on an aggregate basis. Update on hours worked by employees (NAAP Bulletin, May 2016) — The latest available information on hours worked and billed by employees indicates that hours worked and billable hours increased over the last two-year reference period (2013 and 2014). Overall, the average working time in 2014 was 2,081 per year, compared to 2,067 per year in the same offices in 2013. Even the best, hardest-working, and most concentrated lawyer can`t charge more than 80-85% of their time in the office. That is simply not possible. Interestingly, the struggle for this doesn`t get any easier with age, because as you get older, your administrative distractions (all of the above plus client development and law firm management) become greater. For a law firm, the requirement says a lot not only about the standards, but also about the culture of the firm. But for all the interest in billable hourly requirements, there`s still a lot of anecdotal misinformation. Are billable hours requirements really the highest in New York? How many companies need 2,000 billable hours per year? Are there cities where the requirement of 1,800 billable hours is more the norm? It is common knowledge that lawyers` working hours are long and exhausting.
For lawyers, a full-time position rarely means nine to five: According to the U.S. Bureau of Labor Statistics, the majority of lawyers work full-time, with many investing more than 40 hours a week — especially private firms and lawyers at large law firms. In many “lifestyle” companies, where average size meant warm, fuzzy and comfortable, hours increase to mega-companies because of their decision (forced or voluntary) to adjust compensation and their well-founded fear of being chosen by mega-companies that can pay more, good partners. Adam Smith, Bob Gunderson or Tower Snow are to blame.