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Jackson Lewis Ditching Billable Hours for Associates

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By Mark Wilson, Esq. on November 24, 2014 9:46 AM

The life of the BigLaw associate is centered around billable hours, and get about 2,000 of them in a year. Who hates them? Associates hate to keep track of them and meet them. Clients always think they're being cheated. And all of their spouses hate hearing about it.

Seems like only partners like billable hours. Jackson Lewis, however, decided to buck the system. Starting in 2015, reports Above the Law, 293 of its associates will longer be tied to them "as an evaluative tool."

A Holistic Approach

Associates will be evaluated using a bunch of subjective criteria like "efficiency, client service, responsiveness, team-orientation and pro-bono commitment." Critics of the billable hour system, like former Kirland & Ellis partner Steven J. Harper, have said that it pushes associates too hard and discourages partners from sharing resources with other partners.

Switching from a billable hour system also placates the clients who get those giant cartoon eyes when they receive the bill. With clients trying to bring even more work in-house, firms may find it more advantageous to use tactics that cut down on revenue in the short run rather than run the risk that the client will find a way to eliminate the need for the outside firm altogether.

Sure, billables might go down, but arguably, many of those hours shouldn't have been billed in the first place. As Niki Kuckes pointed out in Legal Affairs magazine way back in 2002, the pressure to hit the annual billable hour target increases the temptation for fraud, from simply saying you worked more hours than you did to billing two clients for the same amount of time. It's understandable when you're being asked to work 12-hour days so you can bill eight hours during that time.

Billables Will Never Go Away Entirely

Still, before we can get to the utopia at the end of the rainbow, the rest of the legal community will have to catch up. Jackson Lewis is just one law firm. Harper observes that billable hours are still the benchmark by which attorneys' fees are awarded in many cases. The lodestar method just multiplies a reasonable rate by the number of hours worked. That, however, can certainly be used to award fees after the fact, especially when there's a court there to scrutinize the bills.

The recession has certainly changed the way law firms do business, and whether they exist at all (many of them have stopped doing the latter). Perhaps it's time to exchange some white shoes for some still-expensive, but less white, ones.

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