The Cuddly Law Firm
[Guest post by DRJ]
Are big law firms kicking the billable hour habit? The New York Times says maybe:
“Over the last few years and, most strikingly, the last few months, law firms have been forced to rethink longstanding ways of doing business, if they are to remain fully competitive.
As chronicled by my colleague Alex Williams in the Sunday Styles section earlier this month, lawyers are overworked, depressed and leaving.
Less obvious, but potentially more dramatic, are the signs that their firms are finally becoming serious about slowing the stampede for the door. So far the change — which includes taking fresh looks at the billable hour, schedules and partnership tracks — is mostly at the smaller firms. But even some of the larger, more hidebound employers are taking notice.
“There are things happening everywhere, enough to call it a movement,” said Deborah Epstein Henry, who founded Flex-Time Lawyers, a consulting firm that creates initiatives encouraging work-life balance for law firms, with an emphasis on the retention and promotion of women. “The firms don’t think of it as a movement, because it is happening in isolation, one firm at a time. But if you step back and see the whole puzzle, there is definitely real change.”
The change varies from firm-to-firm but apparently involves more hourly options and, in some case, the elimination of billable hours:
“At nearly every large American firm, lawyers must meet a quota of hours. During the ’60s and ’70s, the requirement was between 1,600 and 1,800 hours a year or about 34 hours a week, not counting time for the restroom or lunch or water cooler breaks. Today that has risen to 2,000 to 2,200 hours, or roughly 42 hours a week. (Billing 40 hours a week means putting in upward of 60 at the office.)
FACTS is an acronym. Under Ms. Henry’s proposal, work time can be: Fixed (allowing lawyers to choose less high-profile work for more predictable schedules), or Annualized (intense bursts of high-adrenaline work followed by relative lulls); Core (with blocks mapped out for work and for commitments like meeting children at the bus); Targeted (an agreed-upon goal of hours, set annually, customized for each worker, with compensation adjusted accordingly); and Shared (exactly as it sounds).
Ms. Henry’s proposal came at the end of last year, when firms had already started backing away from the billable hour. Some have gone so far as to eliminate it. The Rosen law firm in Raleigh, N.C., one of the largest divorce firms on the East Coast, did so this year, instead charging clients a flat fee.
Similarly, Dreier, a firm with offices in New York and Los Angeles, now pays its lawyers salaries and bonuses based on revenue generation, not hours billed.
At Quarles & Brady, a firm with headquarters in Chicago, not only have billable hour requirements been eliminated, but parental leave has been expanded. Women can now take 12 weeks with pay, men 6 weeks. And that time can be divided, meaning a father can take a few weeks off when his baby is born and a few more after his wife returns to work.
Other firms are making smaller changes. Strasburger & Price, a national firm based in Dallas, announced last October that it was decreasing the hours new associates were expected to log, to 1,600 from 1,920 annually. (Lest you think those lawyers will be able to go home early, however, note that newcomers will now be asked to spend 550 hours a year in training sessions and shadowing senior lawyers.)”
I think ideas like flex-time and flat rate pricing can be better for lawyers and clients. Flat rate pricing makes it easier for clients to budget for legal costs and compare prices among firms. Flex-time makes it easier to retain attorneys beyond 4-7 years. However, I’m sure there will be resistance. After all, lawyers and clients have been talking about this for at least 30 years.