To continue in business, you have to make a profit. Since the 1960s, law firms have predominantly chosen to bill by the hour, and as a result, the billable hour has become king. To that end, almost any activity that is not related to billing hours or will not lead to creating billable hours has a difficult time getting traction. But when does it make sense for lawyers to spend time that may never be directly linked to billing? And how is the concept of billing passed on to new generations of attorneys?
ORIENTATION TO BILLING
It’s interesting to contemplate the messages that are given to new attorneys—either overtly or covertly—when they first join a law firm.
This goes beyond the explanations of how to fill out a time sheet, the firm perspective on what is and is not billable and general monthly and annual targets. There are other less obvious cultural norms that are conveyed in these initial training sessions. If the billable hour is the most consistent way that law firms get paid, this is the time that new lawyers begin to absorb the norms and culture of their firm. If you are a seasoned attorney, it is important to remember that how you bill clients has probably become second nature to you. For a new attorney, there is probably nothing that causes greater anxiety than writing down time and trying to understand what is reasonable to ask clients to pay for and what is not. Similarly, there are often contradictions between what new associates are told about billing clients and what is done in practice. Understand that the messages you send to new lawyers at this stage of their development are likely to shape their ideas of how to practice law. Remind yourself that while all of the questions new attorneys ask, or want to ask, may seem obvious or even silly, taking the time to be responsive will pay dividends later on.
Training new lawyers is an expensive proposition. Some firms have decided that they will only hire laterals, letting someone else undergo training expenses and they will reap the rewards. But there are dangers involved in proceeding this way. Each law firm has a unique culture and, over time, has developed specific ways of doing things. Even if you bring lawyers in laterally, you can expect to spend some time schooling them on the ways things are done at your firm, and perhaps undoing the way they’ve been trained by another employer.
A part of the training process that often goes untended is cluing new lawyers in to how the firm makes money. Firm finances are often steeped in secrecy—and this includes not just budgets and profits, but costs as well. Many young associates are wholly ignorant of what it costs to keep the computers running and the lights on. Sharing this information can help them gain a better grasp of firm economics and will assist them as they think about the billing process.
Law is a backward-facing profession built upon precedent, where firms frequently evaluate a new idea based upon who else is doing it. While other types of businesses often desire to be ahead of their competitors in trying out new ideas, the legal profession is understandably risk-averse. But going forward, it may make sense for your law firm to think about how to stand out when it comes to not just valuing the billable hour but developing those who are providing it.
In business organizations it is often said, “What gets measured is what gets done.” Nowhere is this more evident than at a law firm. When it comes to developing attorneys, there is rarely a measurement of input or outcome. If you want to put teeth into your attorney training and development process, it is critical that you measure both input and outcome. The best way to do this is to require that shareholders spend a minimum specified amount of time in developing other attorneys and that the recorded time be utilized as one of the measures that determines partner compensation. Similarly, associates should get credit for time spent in training, formal and informal, as well as in time spent on the development process that occurs through mentoring. Adding attorney development to the compensation process is the one way you can guarantee that it will receive the attention that it deserves.
ASSESSING A PROSPECTIVE EMPLOYER
If you are an attorney in the process of interviewing at a law firm, you will want to know as much as you can about how firm finances are managed and how you will be impacted by the firm’s financial decisions. While you may want to ask about billable hour requirements or targets during the interview process, you should probably wait until the time of a job offer to ask some of the most critical questions.
Once an offer has been tendered, ask to talk to people at your level or any other associate about their experience with the firm. While many firms have billing requirements or targets, it is important to learn how they are implemented and whether they are truly targets or expectations. If the firm talks about bonuses for associates who bill above a certain number of hours, ask your cohorts if they have received a bonus during the time they have been employed.
While the firm may tout a mentoring or training program, this is a time that offers you a greater opportunity to learn about how the program operates, and how much time is invested in associate training and development. Has there been a strong link between training and what associates need to know? Has the training been effective? You may also want to ask what kind of post-mortem exists once a big project is completed. When the trial is over or the deal is complete, do the principal players discuss what happened, or are they simply on to the next project?
You may also consider asking a prospective colleague about what has happened to him or her during more lean times at the firm. Do partners continue to push work down to associates if they are afraid of not making their own hours? Or have they hoarded work that would be a better fit for someone with less experience? While it may seem bold to ask these kinds of questions, remember that you are trying to make an important decision about the job that will be a foundation of your practical legal experience. Few new attorneys ask too many questions of a prospective employer; in fact, usually they ask too few and are then surprised by what they experience when they join the firm.
Remember that this process is always a two-way street. If you are trying to make a long-term commitment to an employer, you want to see a demonstrated commitment to attorney development and a clear understanding of measurements of success. It will be critical to starting the relationship on the right foot.