Partnership Decisions

Alexa, Brian, and Charles continue on their respective paths for the next seven years. Now it’s time for the firm to consider associates for partnership. Here is the type of calculation the firm’s leaders will perform for each associate: see chart above.

Over the course of his time at the law firm, Charles has netted the firm $1 million more than Brian has and $2 million more than Alexa has. So if the law firm has 100 associates in the same class (i.e., tenth-year associates), and 30 available partnership spots, associates like Charles are going to fill the vast majority of open partnership spots. This is because Charles-type associates will have netted a total of $60 million more for the firm than the Alexa-type associates for those same 30 partnership slots.

And Charles is not going to have a sudden change of ethics about overbilling clients upon rising to partnership. Why would he?

Overbilling is precisely what put him into his partnership role.

Some notorious examples of overbilling include a New York lawyer who claimed to have worked 1,271 days in a single year³, and a partner in a major law firm who billed 5,941 hours per year for four years in a row -- that’s over 16 hours a day of billable time, 365 days a year, for 1,460 days straight, without a single day off. Yes, lawyers work long hours, but not that long. In fact, the “standard assumption” is that, “at most, only 70 percent of work time can be turned into time billed to a client.”⁴

A Kansas lawyer charged an average of 33 hours per day for ten days straight.

A California attorney billed a client for 50-hour workdays. A Louisiana firm routinely billed four hours for one-sentence letters. And a North Carolina lawyer billed 13,000 hours over 13 months, even though there are only 9,500 hours in that time period.⁵

Were these rogue attorneys working alone? No, these impossible billable hours did not go unnoticed by the other partners in the respective firms. Instead, the other partners profited from these impossible hours and the culprit was very likely rewarded with a large bonus.

What happens when the overbilling mindset becomes entrenched in a law firm? One large law firm had to produce damning internal emails when their client sued the firm for gross overbilling. One email between partners at the firm applauded the firm’s lawyers for being “already 200k over our estimate.” Another lawyer replied: “Now Vince has random people working full time on random research projects in standard ‘churn that bill, baby!’ mode. That bill shall know no limits.”⁶

Would a lawyer who believes double billing is acceptable and ethical then find any other bill inflation practice abhorrent?