Law firm cutting my billed hours and "bonus" -- legal???

[Anonymous]

Sounds like a cheap-o firm

[Anonymous]

I was an associate at a lower-tier biglaw firm and this happened to me with one partner's clients. He would always tell me to only bill an hour for a research project and there is no way you could do the research he was asking for and only bill an hour on it. Sucks when you are an employee that is measured on billable time and a partner is basically making you work for free.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Bonuses are always based on hours the firm can bill, not on what an attorney puts on a timesheet. And sometimes bonuses are based on the hours a firm is paid. If a client disputes your hours and the firm agrees to cut them, that can reduce your bonus as well.

This really is the norm. I have never heard of anything different with firms that pay based on billable hours. The name says it all - billable, not hours worked or recorded on the timesheet.

Of course we're not talking about a timesheet. I got paid $0 for training, hiring paperwork, etc. I am only getting paid for actually billable hours.

E.g., my "timesheet" (if I used one) may say 8 AM-8 PM (12 hours) but my billable hours that day may only be 7 for whatever reasons.

You still don’t get it. Training and sign on paperwork wouldn’t go on a time sheet. Billable means only what can be billed to a client that the client will pay for. Your dispute is that you think your hours can be billed and your firm does not. You’re probably right that you need to leave. You aren’t going to last in an environment where you believe you, the attorney who is new to the business, knows more than the partners who have built the business and know the clients. It’s a bad fit.

Yes, of course it would go on a timesheet! I'm a patent litigator and I know enough employment law to know that you have to pay an hourly employee for that work.

I definitely don't know more than the partners about the clients BUT I definitely know more than the partners about the associates, and this is exactly why they cannot retain anyone. I will tell the firm thay I will stay through the summer if they want because my boss has a two-month vacation planned to the Amazon and won't have any cell phone service and I don't want to leave the clients stranded. But after my boss returns, I will need to move on and will start looking for a new job today.

I honestly do not see why anyone would think an experienced BigLaw attorney with options would work in that environment of not getting paid (the risk) while not getting any of the benefits of the profit. It is a terrible business model and associates will continue to leave. Maybe you can recruit then for one month but once they see the structure, they are gone.

[Anonymous]

Anonymous wrote:Sounds like you have your answer, then. Quit.

+1. Doesn't seem like anything will change if you stay, and all the PPs saying firms need to write-off inefficient young associates don't seem to be accounting for your years in BigLaw.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Bonuses are always based on hours the firm can bill, not on what an attorney puts on a timesheet. And sometimes bonuses are based on the hours a firm is paid. If a client disputes your hours and the firm agrees to cut them, that can reduce your bonus as well.

This really is the norm. I have never heard of anything different with firms that pay based on billable hours. The name says it all - billable, not hours worked or recorded on the timesheet.

Of course we're not talking about a timesheet. I got paid $0 for training, hiring paperwork, etc. I am only getting paid for actually billable hours.

E.g., my "timesheet" (if I used one) may say 8 AM-8 PM (12 hours) but my billable hours that day may only be 7 for whatever reasons.

You still don’t get it. Training and sign on paperwork wouldn’t go on a time sheet. Billable means only what can be billed to a client that the client will pay for. Your dispute is that you think your hours can be billed and your firm does not. You’re probably right that you need to leave. You aren’t going to last in an environment where you believe you, the attorney who is new to the business, knows more than the partners who have built the business and know the clients. It’s a bad fit.

NP - Nobody wants to work somewhere that your boss can halve your salary based on subjective factors you can't control. In a traditional firm, your are rewarded for the hours you spend on client matters, and if your bonus is affected by writeoffs (usually not a one to one correlation IME) that's not such a huge portion of your salary.

I agree this place is a bait and switch, or else a lifestyle firm for people who are fine with $10k a month. When job hunting OP can just tell people there was a misunderstanding re: comp and nobody will think the short stint was weird.

[Anonymous]

I have never heard of a billable hour defined as anything other than an amount of time recorded on a matter that the firm can choose either to bill or to write off. Bill-ABLE is the key concept here, as distinguished from Bill-ED. A simple and clear way to avoid confusion on this is for pay to be based on collections, not just raw hours with no attention to realization rate. The problem with having hours written off so they are never billed and hence can never be collected remains, but at least things are clear.

Absent something in the agreement defining “billable” as “billed,” there would seem to be a good argument that the firm is wrong. Unfortunately, nobody who wants to stay employed is likely to succeed at that by siccing an employment attorney on the firm.

Having hours written off by somebody else is the bane of the “grinder” lawyer. It happens everywhere. If a person can’t accept a given firm’s practices they probably should look elsewhere. Asking for clarity on why something was written off might help, but it might also just alienate the person providing the work.

[Anonymous]

People who come from biglaw have this issue a lot. Your definition of “billable” is different than theirs.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Bonuses are always based on hours the firm can bill, not on what an attorney puts on a timesheet. And sometimes bonuses are based on the hours a firm is paid. If a client disputes your hours and the firm agrees to cut them, that can reduce your bonus as well.

This really is the norm. I have never heard of anything different with firms that pay based on billable hours. The name says it all - billable, not hours worked or recorded on the timesheet.

Of course we're not talking about a timesheet. I got paid $0 for training, hiring paperwork, etc. I am only getting paid for actually billable hours.

E.g., my "timesheet" (if I used one) may say 8 AM-8 PM (12 hours) but my billable hours that day may only be 7 for whatever reasons.

You still don’t get it. Training and sign on paperwork wouldn’t go on a time sheet. Billable means only what can be billed to a client that the client will pay for. Your dispute is that you think your hours can be billed and your firm does not. You’re probably right that you need to leave. You aren’t going to last in an environment where you believe you, the attorney who is new to the business, knows more than the partners who have built the business and know the clients. It’s a bad fit.

Yes, of course it would go on a timesheet! I'm a patent litigator and I know enough employment law to know that you have to pay an hourly employee for that work.

I definitely don't know more than the partners about the clients BUT I definitely know more than the partners about the associates, and this is exactly why they cannot retain anyone. I will tell the firm thay I will stay through the summer if they want because my boss has a two-month vacation planned to the Amazon and won't have any cell phone service and I don't want to leave the clients stranded. But after my boss returns, I will need to move on and will start looking for a new job today.

I honestly do not see why anyone would think an experienced BigLaw attorney with options would work in that environment of not getting paid (the risk) while not getting any of the benefits of the profit. It is a terrible business model and associates will continue to leave. Maybe you can recruit then for one month but once they see the structure, they are gone.

I wouldn't stay through the summer, especially if you had other leads from your recent job search, unless they let you handle the bills during that time. If boss wants to vacation he needs to retain people.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Bonuses are always based on hours the firm can bill, not on what an attorney puts on a timesheet. And sometimes bonuses are based on the hours a firm is paid. If a client disputes your hours and the firm agrees to cut them, that can reduce your bonus as well.

This really is the norm. I have never heard of anything different with firms that pay based on billable hours. The name says it all - billable, not hours worked or recorded on the timesheet.

Of course we're not talking about a timesheet. I got paid $0 for training, hiring paperwork, etc. I am only getting paid for actually billable hours.

E.g., my "timesheet" (if I used one) may say 8 AM-8 PM (12 hours) but my billable hours that day may only be 7 for whatever reasons.

You still don’t get it. Training and sign on paperwork wouldn’t go on a time sheet. Billable means only what can be billed to a client that the client will pay for. Your dispute is that you think your hours can be billed and your firm does not. You’re probably right that you need to leave. You aren’t going to last in an environment where you believe you, the attorney who is new to the business, knows more than the partners who have built the business and know the clients. It’s a bad fit.

Yes, of course it would go on a timesheet! I'm a patent litigator and I know enough employment law to know that you have to pay an hourly employee for that work.

I definitely don't know more than the partners about the clients BUT I definitely know more than the partners about the associates, and this is exactly why they cannot retain anyone. I will tell the firm thay I will stay through the summer if they want because my boss has a two-month vacation planned to the Amazon and won't have any cell phone service and I don't want to leave the clients stranded. But after my boss returns, I will need to move on and will start looking for a new job today.

I honestly do not see why anyone would think an experienced BigLaw attorney with options would work in that environment of not getting paid (the risk) while not getting any of the benefits of the profit. It is a terrible business model and associates will continue to leave. Maybe you can recruit then for one month but once they see the structure, they are gone.

You really need to look at going back to Biglaw. The Biglaw rate structure allows for the gap between billable and billed. There is fat in the system that can be cut so that the numbers work. At a smaller firm, you will work less (150 hours) but there is not as much wiggle room in the numbers to write off tons of uncollected hours. Reduce your expenses and stay or head back to Biglaw.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I find it a little surprising that a senior attorney would not understand the difference between time billed to client matters, for which the firm will be paid, and time billed to internal activities or pro-bono, for which the firm no only won't be paid but often cost money.

There are some gray area activities around business development and attorney development that you could argue will make the firm money in the long run, but which are an expense in the short run, but firms tend to be stingy about how these are allocated regarding billable hour requirements.

But even when a firm allows such activities to contribute to a billable hours requirement for purposes of bonus structure, they generally cap them. While your firm has a somewhat unusual system for billable requirements, it's very common for firms to set out billable targets for associates for them to qualify for certain bonuses, and there is no firm out there that would allow an associate to count hours billed to internal firm matters, as opposed to actual client work the firm can charge for, as a significant portion of that billing target.

Again, it is really surprising to me that you would not know this... I'm guessing you have spent most of your career in government service or an in-house position? This is very standard for law firms and even if you find a job elsewhere that does an annual billing target instead of a monthly one, you will not find a firm that doesn't make this distinction with its billables and tie it to bonus structure. It would be irresponsible for them to do otherwise because it can seriously hurt firm profitability if you don't incentivize attorneys to focus on client billings.

I read this more as OP was billing client matters, but the numbers where cut. Like PP said, a client isn't paying 4 times the hours for a new associate to get up to speed. I doubt this is a case of pro bono or firm committee work not getting paid.

+1

The new firm’s definition of billable hours is hours that ARE billed to a client, not hours that COULD be billed for working on client matters.

The attorney who reviews the bills will cut hours if an attorney spends too much time on a matter for the amount done and/or to keep a client’s bill down so they don’t go to another firm. At a reasonable firm, cutting hours for a new attorney getting up to speed and/or client relations is something the partners absorb. An inefficient attorney might get told to be more efficient at some point, but having been in big law and having reviewed bills when newbies are billing, it’s bad management to cut the hours an attorney credit for without significant warning, especially with a newbie.

My guess is the firm does this deliberately, as a bait and switch, because 150 hours a month is low for a patent litigator. Billable hours of 165-170/month means some excepted inefficiency is built in. The employment agreement allows the firm to define billable hours, so I’d agree with the employment lawyer. Find another job, preferably with a higher billable hours requirement that is linked to billABLE hours rather than billED.

If it's a small, that's probably what is happening. It also means that OP may just be unable to hit the the salary they want if the firm just cuts hours off the top. It sucks for OP because the pay is 120k a year which jumps to 240k per per year at 150 hours plus the hourly bonus, but it seems like OP is going to have to work big hours to get that number which still isn't much money for a patent litigator. Throw in that any vacation or holiday break will likely cost 10k + hourly, and this job probably is not what OP expected.

[Anonymous]

Anonymous wrote:People who come from biglaw have this issue a lot. Your definition of “billable” is different than theirs.

Really? I've worked for two biglaw firms and never heard of an issue like OP's. Our hours-based bonuses were always based on the amount the associate billed (excluding firm hours and with special rules for pro bono (one firm capped the number that counted)), not the amount that actually ended up on the invoice.

[Anonymous]

Anonymous wrote:

Anonymous wrote:People who come from biglaw have this issue a lot. Your definition of “billable” is different than theirs.

Really? I've worked for two biglaw firms and never heard of an issue like OP's. Our hours-based bonuses were always based on the amount the associate billed (excluding firm hours and with special rules for pro bono (one firm capped the number that counted)), not the amount that actually ended up on the invoice.

The smaller the firm, the more billable aligns with amounts actually billed to clients

[Anonymous]

Anonymous wrote:

Anonymous wrote:People who come from biglaw have this issue a lot. Your definition of “billable” is different than theirs.

Really? I've worked for two biglaw firms and never heard of an issue like OP's. Our hours-based bonuses were always based on the amount the associate billed (excluding firm hours and with special rules for pro bono (one firm capped the number that counted)), not the amount that actually ended up on the invoice.

One of the BigLaw PPs here - agreeed - in BigLaw you (generally) get credit as an asap for anything you have billed, even if the partner writes time off. This works because the expected hours are higher (165-170/month at least) and rates are higher, so an associate’s realization rate (time that clients pay for/billable time recorded) can be lower.

This billable vs billed difference is something some smaller firms do to keep costs down and try to convince potential hires they have good pay for a reasonable work life balance. At first blush is seems like a reasonable salary cut ($240K) for fewer hours (150/month) but it turns out that 150 hours is really 175-200 hours and you have no control over what gets billed.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Probably something you should cleared up. If you don’t want to leave, you could ask your boss what kind of hours are cut and how you could avoid that in the future, or for a written definition of billable hours. Also, are you sure that the firm actually wrote off those 20 hours and did not collect payables for the hours you worked? If they did, that seems way more messed up.

The definition is in writing.

The problem is that what "can" be billed is being disputed.

I think all my hours billed can be billed. My boss thinks approx 85% of my hours can be billed and is giving client discounts off my hours and then subtracting from my pay.

I don't understand how you never came across this issue before unless you weren't billing your hours. It's very common in the associate years. Almost everyone learns to be more efficient.

If the billing partner has the discretion to cut your hours then you either need to work with them to determine how to work and bill so the hours aren't cut or yeah, you need to move on.

I will say that I do find this compensation model odd, and extremely advantageous to the firm, as you have just found out.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Bonuses are always based on hours the firm can bill, not on what an attorney puts on a timesheet. And sometimes bonuses are based on the hours a firm is paid. If a client disputes your hours and the firm agrees to cut them, that can reduce your bonus as well.

This really is the norm. I have never heard of anything different with firms that pay based on billable hours. The name says it all - billable, not hours worked or recorded on the timesheet.

Of course we're not talking about a timesheet. I got paid $0 for training, hiring paperwork, etc. I am only getting paid for actually billable hours.

E.g., my "timesheet" (if I used one) may say 8 AM-8 PM (12 hours) but my billable hours that day may only be 7 for whatever reasons.

You still don’t get it. Training and sign on paperwork wouldn’t go on a time sheet. Billable means only what can be billed to a client that the client will pay for. Your dispute is that you think your hours can be billed and your firm does not. You’re probably right that you need to leave. You aren’t going to last in an environment where you believe you, the attorney who is new to the business, knows more than the partners who have built the business and know the clients. It’s a bad fit.

Yes, of course it would go on a timesheet! I'm a patent litigator and I know enough employment law to know that you have to pay an hourly employee for that work.

I definitely don't know more than the partners about the clients BUT I definitely know more than the partners about the associates, and this is exactly why they cannot retain anyone. I will tell the firm thay I will stay through the summer if they want because my boss has a two-month vacation planned to the Amazon and won't have any cell phone service and I don't want to leave the clients stranded. But after my boss returns, I will need to move on and will start looking for a new job today.

I honestly do not see why anyone would think an experienced BigLaw attorney with options would work in that environment of not getting paid (the risk) while not getting any of the benefits of the profit. It is a terrible business model and associates will continue to leave. Maybe you can recruit then for one month but once they see the structure, they are gone.

I wouldn't stay through the summer, especially if you had other leads from your recent job search, unless they let you handle the bills during that time. If boss wants to vacation he needs to retain people.

The relationship partner shouldn't be handing off responsibility for managing a client's bills. That's a very weird demand.