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"What is $1,000 An Hour?":

Benjamin Civiletti's billing rate. The highest reported associate billing rate is $835 an hour.

Anonassociate:
I cannot imagine that an associate at Dorsey in Minneapolis charges $835/hour. That has to be either a typo or some kind of mistake. That makes no sense within the framework of law firm billing rates.
12.12.2005 10:23am
Steve:
It is certainly possible there is *an* associate who is billed at that absurd rate for what must certainly be highly specialized work. I don't think there is any chance that $835/hour is the generic rate for associates, even senior associates.
12.12.2005 10:26am
DNL (mail):
Why firms really don't want you to blog? If it took 90 seconds, it cost the firm $20 in billable time.
12.12.2005 10:30am
anonassociate:
I just can't imagine any associate at Dorsey billing out that high. There are very, very few partners at even NY firms that bill out that high--let alone an associate in Minneapolis.
12.12.2005 10:33am
anonymous coward:
Hey, it was apparently a market-clearing price. Seriously, if you're paying $400/hr to get the job done poorly, which happens often enough, why wouldn't you pay $1000/hr to get it done right? (Or if I'm Merck, why wouldn't I shell out whatever it takes to get someone like Philip Beck at an early Vioxx trial? Not that it entirely worked...)

I do want to know what work that associate was doing, though.
12.12.2005 10:45am
Commenterlein (mail):
Ignorant question from a non-lawyer: How close is the relation between hours billed and actual hours worked on a case, in your experience? Is there any way for a client to obtain reliable information about the typical number of hours billed in a typical case of a certain type? Thanks for any information!
12.12.2005 11:05am
Cornellian (mail):
Ignorant question from a non-lawyer: How close is the relation between hours billed and actual hours worked on a case, in your experience? Is there any way for a client to obtain reliable information about the typical number of hours billed in a typical case of a certain type? Thanks for any information!

Ideall the ratio should be 100%, i.e. all hours spent working on the case should be billed. In reality, firms sometimes do work on the case without billing it for various reasons, the but the general rule is, you bill every hour that you spend working on the case. The reverse situation, billing for an hour of work that you didn't actually do, is a major ethical no-no.

It's hard to generalize about the amount of time spent on a "typical case" at least if you're talking litigation since a lot depends on the specific facts and whether the opposing counsel is going to bring dubious motions or play other time wasting games. The overall task of policing outside counsel falls to the client's in-house counsel. Part of his job is to scrutinize the firm's billings and make sure his employer is getting value for money. Quite often such in-house counsel previously worked in private practice themselves, and they know how law firm billing works.
12.12.2005 11:25am
Commenterlein (mail):
Thank you very much!
12.12.2005 11:31am
Cecilius:
In response to Commenterlein's question, contrary to the stereotype of bill padding, my general experience is that the more an attorney costs, the more conscious they are about minimizing the amount of time they bill to each case. Expensive partners like Civilleti (whom I do not know and have never worked for - this is a generalization), tend to take a supervisory role while the less expensive junior partners and associates do the time-consuming grunt work, sort of like a field general. I've also seen these types of partners sweat when looking at draft invoices and often scratch out entries for genuinely legitimate work because they're afraid of sticker-shocking the client. Of course, I could bitch and moan about how ridiculous it is for any attorney to claim that they're work is worth $1,000 per hour, but if even a single client is willing to pay it, then I guess that rate is valid.
12.12.2005 11:47am
Jim Rhoads (mail):
I've known Ben for fifteen years. He is a wonderful person as well as a great lawyer with superb common sense and judgment. Being a former Attorney General of the United States doesn't hurt either.

Worth every nickle if you ask me.
12.12.2005 11:50am
Bruce Hayden (mail) (www):
Sorry to be a cynic, but some attorneys at some firms do manage to bill more than 60 minutes in a given hour. One way that this is done is to have a minimum firm billing quantum, of, for example, 1/4 hour. So, you make a 2 minute phone call, you bill it at the minimum quantum, which is 1/4 hour. Do this a lot, and you can end up easily billing more than 60 minutes in an hour.

I don't know if this is still happening, but another scam is travel time. An attorney has to travel somewhere on business. He naturally bills the client for his travel time (often at a reduced rate). But maybe that travel is, for example, by air, which gives him the ability to work on another client's business, and, bill both clients, though often the first one at the reduced rate.

Oh, while we are dealing with billing scams, at least in the past, some attorneys would bill multiple clients for the same brief. S/he might bill the original research to a first client. But then, when s/he can reuse the research for a second client, it also gets billed to the second client. Indeed, I have heard of attorneys billing multiple clients for the same piece of research for years.

Now, of course, most (or, IMHO all) of this is technically unethical. But, at least in the past, some of this was done routinely to meet (again, IHMO) excessively high billing targets.
12.12.2005 11:55am
Jim Rhoads (mail):
Bruce:

The practices you cite have indeed infected the hourly billing system for decades. That is why sophisticated consumers of legal services negotiate specific provisions in engagement letters seeking to eliminate such practices.

A better approach in my judgment is to negotiate fixed fee deals as much as possible. I have always made the point to clients and to my partners that major buildings get built every day using fixed fee contracts. It is no more difficult to manage a large litigation project than it is to manage the construction of a eighty story condominium building.

Why the fixed fee approach has not been used more frequently in the legal services business is more based on tradition than logic, in my opinion.
12.12.2005 12:06pm
Steve:
Some practices, such as rounding time up to the next quarter-hour, are relatively common in other trades as well. Some clients negotiate a better deal, such as billing in 10-minute or 6-minute increments.

Other practices, such as double-billing while traveling, I would consider fraudulent and unethical.

A fixed-fee contract, in my opinion, serves the interests of the litigation client poorly except in the most cookie-cutter cases. Most clients find it works better to simply monitor the litigation more closely, ensuring that motion practice, third-party claims, etc. are only brought when justified by the expense. The truth is, there are many optional tasks in litigation that may lead to a better result, but there's no way to be sure. If you hire a lawyer on a flat-fee basis, those optional tasks simply won't get done. The case will be litigated in the cheapest way possible and the result may be worse because of it.

Think of hiring a lawyer the way you think of hiring a dentist or an auto mechanic. If you find one you trust, you'll get good results and a fair price. Otherwise, they are likely to try and sell you many more services than you need. A flat-fee approach avoids overbilling, but it doesn't mean it's the best way to keep your car running, or your teeth healthy.
12.12.2005 12:21pm
DK:
I think it is fair for lawyers to bill extra for travel time, even if it leads to billing more than 25 hours in a day. I am not a lawyer, but my dad was one, and being away from your family working is definitely worse than being at home or in town working from the family's point of view. so why not bill for it? It is only fraudlent if you are billing the travel time at full rate as work. If you bill the travel time at some reduced rate for the hassle/burden on your family, it is perfectly fair.
12.12.2005 12:31pm
Aasem (mail):
Jim Rhoads,

Fixed fee billing frequently leads to conflicts of interest in certain settings, and I've seen it in action in automotive product liability cases. The firms frequently find themselves torn between spending time and money to achieve their clients' best interests, while also protecting their own financial health. Once they've already billed the maximum on a case, all subsequent work is a loss for the firm, and they are pressured focus their resources on other work that is billable. This can be very difficult to control, particularly when you have associates scrambling to out-bill their peers, junior partners scrambling to generate more revenue than their peers, and senior partners scrutinizing the firms' bottom line.

I've experienced flat fee billing as a litigator, and I've experienced it as an in-house general counsel who hired outside firms. It's a rotten system all around.
12.12.2005 12:31pm
Splunge (mail):
Can anyone see the LHMO ("Legal Health Maintenance Organization") coming? In principle, it sounds like as good an idea as the HMO: you'd have some regular lawyer who would look after your legal health, give you a little preventative care -- look over your contracts before you sign them, advise you before marriage or starting a business with a partner, et cetera -- and hopefully steer you clear of major legal trauma. You'd pay a regular monthly fee, and your costs would be spread out in time, and among your peers in a similar "legal health" category. In return, you have no catastrophic legal bills.

But I'm assuming, like the HMO, the sticking point is that it's built on the assumption that all health (or "legal health") care is equivalent, so that there is no real need for a true free market where each buyer negotiates individually with each seller, with the usual result that the best practitioners command rates the average consumer simply can't afford. The experience of the HMO over the last 20 years (and the opinions above, self-interested as they probably are) would seem to belie this assumption.
12.12.2005 12:42pm
Nicole Black (mail) (www):
So, if a firm has previously prepared a specialized brief from a prior case that is on point and relevant to a new case, does the brief itself and the time spent preparing it have an inherent value? For example, if the client had chosen a different firm that had never dealt with the particular issue, the client would have had to pay for 10+ hours of work to prepare the brief, but if the client chooses the law firm that already prepared a brief on that same issue, should the client only have to pay for 2 hours or so of work to tailor the brief to the new case?

Doesn't seem right to me. Presumably the firm that had already dealt with the issue could charge a higher hourly rate for the matter given their "expertise", but what if it's a long time client? You can't just raise the rates without a fuss. Or, what if the issue was not apparent when the firm took the case, but it was later learned that a brief would be needed on that particular issue? You can't suddenly raise the hourly rate in the middle of the case.

In my opinion, a portion of the time spent on researching the issues and drafting the brief from the former case should be billed to the new client.

Billing isn't always as simple as it might seem at first glance.
12.12.2005 12:43pm
Idealist (mail):
Bruce,
No doubt, lawyers being human, the unethical practices you describe have occurred some time, some place. Do you have any evidence that they are common practices? I practice law in New York and find them to be exceptionally uncommon. People may joke about double-billing travel time, for instance, but I have never heard of anyone actually doing it. To be sure, the need to prepare bills in tenth-of-an-hour increments creates many challenges and ethical concerns, but most lawyers, like most people in general, are honest and try to deal with those challenges and concerns the best they can.
12.12.2005 12:48pm
Bruce Hayden (mail) (www):
The problem that I see is that the Law has become a business. I have heard of firms requiring 2300 billable (or even billed) hours a year. But let's assume just 2,000 hours. That is, of course, 40 hours a week for 50 weeks of the year. Doesn't sound that bad does it?

But then you add in CLE, other training, coffee breaks, and just plain inefficiency, and you are quickly well above the 40 hours a week - maybe as high as 50. Add in the client development that is often a prerequisite for partnership, and it gets worse. And a previous poster pointed out that the senior billing partner sometimes cuts bills down by cutting hours billed. But often, those aren't just the billing partner's hours that get cut. I have had it happen to me on multiple occasions. Nothing wrong with my work - just sticker shock on the whole bill. Which gets us into the difference between billable, billed, and collected hours. If you get your hours cut this way, in at least some firms, you have to make up those hours elsewhere - again resulting in more hours worked a week.

So, no surprise to me that there is in at least some firms a lot of pressure to fudge hours billed a little. Needless to say, not ethical, but totally understandable.
12.12.2005 12:49pm
B. B.:
As one who fairly recently went through the bar process, including the MPRE, the practice of billing another client for doing work while you are billing a second client for travel time is a definite no-no.
12.12.2005 12:52pm
Lawbot2000:
"I have heard of firms requiring 2300 billable (or even billed) hours a year"

hahahaha. Come to New York. If you're billing 2300 hours then you better be on maternity leave.

It's common for associates to bill 2600-3100 in the big NY firms.
12.12.2005 1:00pm
Bruce Hayden (mail) (www):
Idealist

I hope that you are right that it has been cleaned up a lot. A decade ago, it seemed to be rampant. And, no, no concrete evidence, just what I have seen and heard from other attorneys. Also, when I was working as inside counsel, I had to negotiate bills down on occasion, and the phone calls were an easy target.
12.12.2005 1:06pm
Jim Rhoads (mail):
AASEM

I agree there can be problems attendant to fixed fee billing. The ones you cite are among them.

But computerized billing records have been with us for many years now. The data is therefore available to price many services much like the flat rate system in auto repair and the procedure system in medical billing. In addition, project management software has been around for nearly as long as computerized billing. Combining the two allows for contingency cost management.

Putting the onus on the service provider to be efficient and rewarding efficiency rather than the "compulsive dronism" that hourly billing rewards seems to be more logical and in keeping with the competitve marketplace we find ourselves in today.
12.12.2005 1:16pm
3L:
For the veteran lawyers: what were the big firms requiring in minimum billable hours per year in the 1970s? 1980s?

I think it would make more business sense to cap hours at around 2000. The lawyers would be happier and more productive. They would also stay at the firm longer, thereby maximizing the firm's return on investing in the lawyer's lean, early years.
12.12.2005 1:27pm
Pete Freans (mail):
Apparently the market will pay those fees based on an attorney's legal experience and the complexity and obscurity of the work. If that is the case, then you are OBLIGATED to charge that amount. If you don't, someone else will. Isn't your time valuable enough? Mine certainly is.
12.12.2005 1:38pm
Vanilla Thunder (mail):
Also, it's important to note that stated rates (e.g. $800/hour) differ signficantly from negotiated rates...For example, the stated (undiscounted) rate for associates was $525/hour...in our budgeting for the coming year, we never expected to actually get $525/hour for an associate's time...we budgeted an actual recovery rate of 55%...when pitching work, we would offer our services at discount (like $375/hour) and then negotiate if needed...Of course, there are some cases that are complicated or risky enough that you can charge full rates...I just don't see it that often.
12.12.2005 2:21pm
Aasem (mail):
Jim Rhoads,

You make some good points. But in some areas (like litigation) the fees can vary widely based on who your opponent is. Going back to the automotive products example, one can usually defend a case against your average local plaintiff's attorney for $15k-$20k. But if the plaintiff switches attorneys mid-stream and picks someone well-connected and sophisticated, you could easily be forced to bill $400,000 in unanticipated discovery battles alone! Also, the number of experts suddenly bloats, the number of depositions skyrockets, and unanticipated world-wide travel suddenly forces its way into your life. If your judge is aggressive, then you'll find yourself double and triple tracking depositions in mulitple states. Instead of two lawyers working on the file, suddenly there are 6. Now that $20,000 fee has topped $1,000,000. Of course with good communication and savvy clients, that should not be a problem--unless the General Counsel has to go to the Board of Directors during a bad market.

Billing is always ugly and difficult, no matter how it's done.
12.12.2005 2:31pm
not a veteran:
3L asks:
For the veteran lawyers: what were the big firms requiring in minimum billable hours per year in the 1970s? 1980s?

I didn't start billing time until the 90s, but I do remember reading a letter to the editor in a legal rag that quoted some ABA publication from the 60s. It noted that due to CLE, civic, family, and nonbillable firm duties, one could not be expected to bill more than... and I think the figure was 1250 hours per year. I wish I had saved that, and I wish I had tracked down the ABA publication.
12.12.2005 2:52pm
3L:
If any veterans respond to my earlier question, the follow-up question would be to compare the time and effort spent at work then with now. (If not relevant to you, compare your work life then with a young associate's now.)
12.12.2005 5:30pm
Aasem (mail):
3L:

I started in 1986 with stated billable requirements of 200/month (2400/year). However, unless you were billing 220 to 240 EVERY month, it was common knowledge that you would not last more than a couple years. This was in Los Angeles.

In the 80's, billing abuses were rampant and many of the practices accepted then are tabboo today. It is no harder to honestly bill those hours today than it was then, but it seemed fewer were honest then. I happened to work under some honest billers, so it seemed I had to work much harder than many of my collegues to compete.

As far as comparing time and effort then with now, that's difficult. Everything becomes easier with experience. Although a 65-70 hour week is still far too much time away from family and the sailboat, those hours are much less stressful today simply because I know what I'm doing and the anxiety is more manageable.

I suppose I should also disclose this: I recently retired early as a result of severe cardiac conditions that preclude me from working at all. I attribute the heart problems to an overly stressful litigation practice. Despite a healthy diet and running three marathons per year, work did me in. It ain't worth it!
12.12.2005 6:05pm
NickM (mail) (www):
Multiple-billing clients for travel while working on another project is common. It's also common for attorneys with multiple appearances in the same courthouse to bill the travel time out to each client fully. I even had a commissioner tell me it was acceptable for a court-appointed attorney who had 6 matters in the same courtroom on the same day, which were heard one right after another, to bill each case (that attorney was court-appointed, and client pays the bill under court order) for the full hours spent.

Personally, I don't bill for phone calls, case analysis, etc. while I'm driving on another client's hourly fee matter (regardless of whether that travel is billed at a reduced rate). I don't charge for my travel time in air travel, so I bill other clients for the work I actually do during that time. [Most of my air travel is for flat-fee writ or appellate matters anyway.]

Large corporations can be different, but most individuals and small businesses hate paying lawyers' bills and scrutinize them carefully with an eye toward getting anything removed that they can. I had one client refuse to pay for about 20 hours of a deposition over 3 days because I "didn't do anything those days". Apparently if I'm not the one asking questions at that time, I'm not working.

I think I need to get a copy of the article to show to the next prospective client who wants me to litigate a case for him for $500 or $1000 total. [That amount often includes filing fees in their minds.] They seem shocked that attorneys charge a greater amount for handling a lawsuit than preparing a trust or a contract.

Nick
12.12.2005 6:08pm
NickM (mail) (www):
In the '80s, it was fairly common to bill in 1/2 hour increments, so phone calls and letters were a wonderful source of revenue for lawyers. The market has corrected that abuse for the most part.

Nick
12.12.2005 6:13pm
Bob The Lawyer:
I'm a tax associate at a firm in London and my chargeout rate is £450 per hour, i.e. $788. Our partners are charged at £600 per hour - $1,050. This is not unusual. My impression (entirely anecdotal) is that US firms have lower hourly rates, but typically bill more hours for a similar task.
12.12.2005 6:33pm
Cheburashka (mail):
Bob - how does associate comp compare to the U.S.?
12.13.2005 1:30pm