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Denise Howell is a seasoned appellate and intellectual property litigator based in Los Angeles. Denise writes one of the first and most popular law-related blogs, Bag and Baggage, coined the term "blawg" and helped pioneer podcasting for lawyers. Microcontent obsessed since 2001, she is frequently quoted in the media on legal issues involving intellectual property and technology law. "Sound Policy" is Denise's show at IT Conversations, and it's also what she hopes results from the briefs she submits to court. Email Denise at dhowell@gmail.com.

Dennis Kennedy is a computer lawyer and legal technology expert based in St. Louis, Missouri. An award-winning author, a frequent speaker and a widely-read blogger, he has more than 300 publications on legal, technology and Internet topics, many of which are collected in his e-books. Dennis has been described as someone who knows almost every rock song in existence and, more importantly, how they apply to technology and law. Email Dennis at his gmail address.

Tom Mighell is Senior Counsel and Litigation Technology Support Coordinator at Cowles & Thompson in Dallas. He has published the Internet Legal Research Weekly newsletter since 2000 and blogged about the Internet and legal technology at Inter Alia since August of 2002. With Tom's singing, Ernie on guitar and Dennis' encylopedic knowledge of rock music, we may have the beginnings of a good band, if this whole blog thing doesn't work out. Email Tom at tmighell@swbell.net.

Marty Schwimmer left a partnership in the largest trademark practice in the world and founded Schwimmer Mitchell, a full-service IP micro-boutique in Westchester County, New York, where he represents owners of famous and not yet famous trademarks. He founded The Trademark Blog, the first IP law blog and the one with the most pictures. He is the first to come in and the last to leave in his firm. Email Marty at marty@schwimmerlegal.com.

Ernest Svenson practices law with a mid-sized law firm in New Orleans, specializing in business-related lawsuits. Most of his practice takes place in federal court, especially the Eastern District. He is best known for his weblog Ernie the Attorney, which he started as an experiment. Like many experiments it got out of control. Nevertheless, he continues to practice law and, occasionally, to seek enlightenment. Email Ernest at esvenson@gmail.com.
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May 31, 2006

Work-hoarding Partners and their Consequences

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Posted by Dennis M. Kennedy

Tom Collins, in his excellent More Partner Income blog, describes a phenomenon that I've seen for a long time, yet have found difficult to explain to people. In fact, I often feel that people do not believe me when I talk about this. It is somewhat counter-intuitive.

As Tom explains, lawyers in mid-sized firms (and also in more larger firms than people might expect) are consistently working annd billing more hours than associates. There is no "leverage" and in many mid-sized firms the partner/associate ratio is 1:1 (or less).

What has happened, especially since the notion of minimum billable hours got applied to partners, is that partners hoard work and do not delegate it to associates. The reasons are pretty clear - if your compensation and review is based on making your own quota of billable hours as a partner, then, even though you are defeating the basic economic purpose of having a firm and using leverage with associates, you will make sure that you have sufficient work to make your own billables quota first. In firms that use "billed" or "collected" hours as a measure, the tendency to hoard is even greater.

Tom's post does an excellent job of describing the phenomenon and explaining the many negative consequences that flow from it. Tom's suggestion of a more rational compensation scheme for mid-sized firms is mandatory reading, especially if you are a parther (or a partner-to-be) in a mid-sized firm.

My own take on this is that the work-hoarding partner phenomenon is one of the most insidiously destructive forces at work in law firms today. If you ask senior associates and young partners why they have left firms, it is rare not to hear some variation on this theme.

I applaud Tom for asking the questions and proposing a starting point for finding a solution.

The money quote:

The firm gets a bonus out of the new approach. The firm gains a farm team out of which the future partners and leaders of the firm will come.

It should concern us that Tom has to remind us of the basic truths he notes in his post. More firms, however, should be concerned that the farm team has already left the ranch.

Comments (5) + TrackBacks (0) | Category: Law Is A Business | Law Practice Management | Practice of Law


COMMENTS

1. Denise Howell on May 31, 2006 4:54 PM writes...

Consider this in light of standard partner billing rates and you just come away with a big "Huh???" Senior associates aside, I can't imagine clients letting this slide.

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2. not my real name on May 31, 2006 11:36 PM writes...

Being a soon to be associate at a major firm, I would hate my supervising partner to 'hoard' work in this way. I have no experience of the way firms bill, but surely partners could include in their billable hours things like research releases, case notes and the like, so that they are adding value to the firm, but not taking work off younger lawyers. 'Thinking' time is surely as valuable to the firm as a whole, especially if that information is passed to younger lawyers, than a partner drafting a contract.

Partners should be supervising, checking and directing, rather than doing. My current boss, at a 2 partner law firm, comes in at 9.30 am and hands me a pile of stuff, gives me general direction on what to do, where to look for info and what he wants, then leaves me alone for the day to do it. We are both happy!

If bosses can do things that are not billable to a client, but still counted as billable hours, maybe this would be a reasonable solution. I know that lots of firms in Australia allow partners and associates to bill pro bono work to the firm as billable hours, even if they are not able to bill that work to a client.

Good book on these idea is David Maister's 'Managing the Professional Service Firm' of a while back.

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3. cltlaw on June 1, 2006 8:11 AM writes...

There is that tension. Consider too that 'hoarding' can result from clients who complain mightily about multiple associates time on their matters. To avoid that griping, the partner on the case does the work, rather than delegating it. Consider further that associates often do only part of the task, and the partner gets back a 75% complete task. In retrospect, the partner may be disinclined to "mentor" to get that 75% done, when by not delegating, the item could be 100% done, as desired, when desired.

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4. not my real name on June 1, 2006 5:58 PM writes...

Good point - this is the problem I have always had with 'billable hours' in general! If it shows up that lots of underlings have been working on the matter, people get grumpy not only because of the time cost, but the perceived quality cost in terms of not having a partner do the work.

This is where billable hours fall down as a pricing mechanism, in my view. Surely the result is more important, regardless of how achieved. I've always been a fan of costs agreements or costs scales in this regard. Most of my work is charged on a per item basis, so that if the firm can charge $X for a letter, it is up to them to work out how to make the most profit from that $X.

Seems to work fine where I am!

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5. RJON@HowToMakeItRain.com on July 23, 2006 6:51 PM writes...

Such an important topic. So many points to make. Where to begin...

1. Will clients "let it slide" when a senior lawyer does the work a junior could have, just to beef-up the senior lawyers' hours? ABSOLUTELY. Contrary to our collective belief as lawyers that client are concerned about the machinations that go on inside the walls of our respective offices, its been my experience, after helping hundreds of lawyers to transform their practices into very profitable businesses, that the vast majority of clients care about the following three factors, and in this order: The Client Service Experience, Results, and Price. If our profession is waiting around for clients to stop "letting it slide" and start to effect change by policing their lawyers & auditing our bills, we are going to be waiting around for a long time & wake-up one day to find ourselves regulated by our respective States' Departments of Professional Regulations, right alongside plumbers, electricians, and hair stylists. Instead, it is up to US to recognize that like so many other things associated with law firm management...good ethics and good business go hand-in-hand.

2. Billable hours as a pricing mechanism. For any students of history reading this, you may be interested to know that using the billable hour as a pricing mechanism is only a recent (bad) idea. I won't elaborate on why it's such a bad idea to emphasize time spent instead of results achieved. Instead, I'll just invite anyone who is interested in learning how to escape the hourly trap, to drop me a line so I can invite you to participate in a "No B.S. How To" teleseminar I'll be hosting on the subject in the coming months.

3. It's counter-intuitive for a senior lawyer to hoard hours. Respectfully, I disagree. Is it counter-intuitive to expect a starving man to hoard food? Still respectfully, I say: What do you expect is going to happen when a lawyer's income used to support his/her family is based upon the number of hours sold to clients, but no-one ever bothers to teach him/her a lick about How To Make It Rain!?! Law firms that emphasize Rainmaking as part of a lawyer's career development, largely insulate themselves from this well-documented and destructive tendency for lawyers to want to be able to feed & clothe their children.

Respectfully,


RJON ROBINS
www.HowToMakeItRain.com
Helping Lawyers In Small Firms Make ALOT More Money

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