Why do Law firms work crazy hours?

Why do Law firms work crazy hours?

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M511

Original Poster:

103 posts

87 months

Tuesday 5th June 2018
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The initial message was deleted from this topic on 16 April 2019 at 20:59

Lotus Notes

1,200 posts

191 months

Tuesday 5th June 2018
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It's normally junior people climbing up the career ladder. Endless paperwork and menial jobs.
For those who make it, the jobs get more important, but it won't stop until they make MD or partner.

RDMcG

19,142 posts

207 months

Tuesday 5th June 2018
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It is in the end a service business and will be affected by client demands and court deadlines for example. I have spent endless hours in lawyers’ offices when involved in mergers and acquisitions, and also when pursuing a major legal action.

Once did a 36 hour gig when we were closing a deal, having food sent in an cat napping to close an investment. I was the client, not the lawyer

4x4Tyke

6,506 posts

132 months

Tuesday 5th June 2018
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The IT industry used to be the same. In my early career, all-nighters in the run up to release day in software houses were common. These became known as death march projects. People can manage about eight hours a day of high mental effort, beyond this peoples mental capacity declines sharply to the point, they become counter productive. Mistakes rise rapidly that take longer to fix. When this happens over a protracted period, mental and physical health suffers, anxiety, stress and that window of high productivity becomes shorter over time.

Nine women can't make a baby in one month



Edited by 4x4Tyke on Tuesday 5th June 15:17

Lotus Notes

1,200 posts

191 months

Tuesday 5th June 2018
quotequote all
M511 said:
Thanks guys, its starting to open my eyes here.

Lotus Notes said:
It's normally junior people climbing up the career ladder. Endless paperwork and menial jobs.
For those who make it, the jobs get more important, but it won't stop until they make MD or partner.
So it's the process of the paperwork that takes time. I'm guessing some of this could be set in a workflow and make it easy to re-do the things they do a lot?
For example, the due diligence for M&As is done in accordance with the consulting firm's methodology following their clients demands (buyer and seller). There's no standard approach and the way it's done depends on the complexity, industry etc etc. Each step of the workflow process takes time, paperwork..and ressource.

QuartzDad

2,247 posts

122 months

Tuesday 5th June 2018
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I did some IT consultancy at one of the top UK corporate law firms a few years back. Bonuses for the more junior staff kicked in when they exceeded 1700 billable hours per annum - divide that by 52 or 48....

They had several Travelodge-style en-suite bedrooms built into the office as well as a gym and 24 hour catering. The best anecdote was from the HR admin; the partners were paid a flat £10k per month and the rest of the profits distributed at year end. One of the partners came down to see her one morning and asked if she could remind him which bank account his monthly retainer was paid into.

Regarding inefficiencies, IIRC they billed 20% of their annual turnover on the last day of the financial year and 10% in the final hour. Each invoice had, *on average*, been edited 26 times between the time being recorded and the final bill being produced.

Edited by QuartzDad on Tuesday 5th June 12:23

RDMcG

19,142 posts

207 months

Tuesday 5th June 2018
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If you are in a significant transaction, a contract negotiation, selling, or buying.a company for instance, you may be negotiating the deal head to head and you want your legal counsel to review every part of the deal on the spot and ensure it there are no inaccuracies in how the deal is finally struck. It is a crucial part of getting a deal done - I do not share a negative view of lawyers. Business is a blood sport and if you are too slow someone else can there ahead of you. or the other side loses patience as you took too long. Thus, you need your team on hand 24 hours a day including weekends at times. I was recently in a major corporate issue which was likely to end up in a proxy fight. We had superb lawyers as did the other side, and legal fees were in the order of $2 million. Without the lawyers we would still be talking and the company would be in serious trouble. Now it is a major success.

Lanker22

111 posts

75 months

Tuesday 5th June 2018
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Surely using the billable hours system is just an incentive for law firms to be inefficient?

My grandmother had to use the services of a legal firm recently and the amount they charge to even send an email is frankly disgusting. How do the fkers sleep at night?

hyphen

26,262 posts

90 months

Tuesday 5th June 2018
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4x4Tyke said:
Nine women can't make a baby in one month
It's a marathon not a sprint is what I was told. And then they became sprints confused

biggrin

fido

16,796 posts

255 months

Tuesday 5th June 2018
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4x4Tyke said:
In my early career, all-nighters in the run up to release day in software houses were common. These became known as death march projects. People can manage about eight hours a day of high mental effort, beyond this peoples mental capacity declines sharply to the point, they become counter productive. Mistakes rise rapidly that take longer to fix. When this happens over a protracted period, mental and physical health suffers, anxiety, stress and that window of high productivity becomes shorter over time.
I worked in a bank where they once asked the whole team to work EVERY DAY until the problem was sorted - so basically come in weekends at a slightly later start time. Not a problem - and didn't feel tired at all - until the second weekend that is. Then I started having hallucinations .. pillars on the office/trading floor would start appearing when I walked around outside work! I'm guessing that in these type of firms they do crazy hours overall but do have some 'downtime' in between shifts so you're not actually stuck at your desk 8-10 hours a day as you would be in some City jobs.

Munter

31,319 posts

241 months

Tuesday 5th June 2018
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Lanker22 said:
Surely using the billable hours system is just an incentive for law firms to be inefficient?

My grandmother had to use the services of a legal firm recently and the amount they charge to even send an email is frankly disgusting. How do the fkers sleep at night?
You'd think that. But I can't even get mine to respond. I'd pay £20 just to know they are still alive...assuming then things actually moved along afterwards.

Jasandjules

69,885 posts

229 months

Tuesday 5th June 2018
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M511 said:
Why do they work unusually long hours? - seems rather inefficient to me?
Is this just a culture or ting or does the work really take that long to complete?
Usually there are targets for billing, which means time spent on matters which can't be billed etc is "wasted" or lost....

Scabutz

7,601 posts

80 months

Tuesday 5th June 2018
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I used to work for City Law Firm, although I was in IT. A lot of their long hours seemed to stem from 1-3 hour boozy client lunches, followed by a nap, then having to work late into the night to make up the time.

I know there was more to it than that. One the younger lawyers took us out for a drink and was telling us about how they get bonuses for billing certain amount of hours and things and that they had to put the work in to climb the greasy pole.

utgjon

713 posts

173 months

Wednesday 6th June 2018
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https://thestudentappeal.com/understanding-billabl...

Article said:

Understanding Billable Hours
To most non-lawyers (law students included), BigLaw is a mysterious black box. What really goes on in those huge, vaguely intimidating office towers? What do so many lawyers possibly spend so much time on?

A question I received recently nicely highlights one perception of BigLaw attorneys:

How much does time/billing padding happen? Do partners/bosses turn a blind eye to the practice or actively discourage it? Also, are associates/partners likely to participate in it if your client expects 10 hours of work and you finish the work in 8 hours and surf the web for the 2 hours but bill 9 hours?
I love this question for several reasons.

First, it hones in on one of the weirdest aspects of BigLaw — the billable hour. What other career rewards people simply for showing up for a long time?

Second, it rather quaintly assumes that BigLaw partners are interested in keeping hours down, while associates are interested in keeping them high. As we’ll discuss, this is partly true, but not quite in the way that the questioner understands it.

Finally, this question makes everything seem so straightforward. Work for eight hours, bill for nine — that’s bad! Unfortunately, in the BigLaw real world, things are more ambiguous, and the pressure created by billable hours is more subtle.

The Basics of Billable Hours
On the face of it, billable hours are pretty simple. An attorney at the firm works for one hour, and the client gets charged for their time at an agreed-upon hourly rate. In a solo practice, the attorney would pay expenses and keep the rest of the money as compensation for the hour of work.

In a large firm, things are more complicated. The clients still (generally) pay by the hour, but the pot of money is divvied up differently.[caption id=”attachment_1851" align=”alignright” width=”300"]

Image Copyright Freepixels.com, 2011[/caption]

Associates are paid a salary, which isn’t dependent on how many hours they work. Associates don’t get overtime. In most cases, they also get a bonus at the end of the year, which, depending on the firm, might be based on their billable hours. (Generally, there’s a required minimum level of billable hours to qualify for the bonus at all, and many firms include tiers of additional bonus money for additional hours.)
Partners, on the other hand, might receive some base compensation, but the bulk of their compensation comes via equity in the firm. (This assumes they’re “equity partners.” Non-equity partners are glorified associates, and receive a salary.) Where does their equity share originate? It’s what’s left over after the firm’s expenses, including salary, have been paid. So, it’s the difference between what clients have paid (hours billed x hourly rate) and the cost of running the business, split between all the partners.
Understanding Partner and Associate Incentives
As should be apparent, partners and associates in a large law firm have very different economic incentives.

What a Partner Wants
If you’re a partner in a law firm, you want each associate to work as many hours as possible. More hours billed = more money for you.

But, critically, you want to ensure that all of the hours billed are chargeable to clients. In other words, you’re looking for quality hours, and as many of them as possible per associate.

What an Associate Wants
If you’re an associate, however, your rational course is to do as little work as you can, while still collecting a paycheck. This guarantees you the highest hourly rate for your labor.

The introduction of bonuses complicates the picture a little, since most associates like to collect at least the basic bonus (and doing less than that would probably get you fired anyway). As a practical matter, associates tend to aim for the billable bonus target, without going over. (One of my happiest law firm memories is the day I reached my target for the year, on the last afternoon of the fiscal year. Bliss!)

Firms try to incentivize associates to work more by offering additional bonus money, but, frankly, the per hour rate in most cases is laughable, so few people actively try to get this money. It ends up being compensation for associates who got stuck on repeated trials or deals, and billed tons of hours as a result.

How This All Plays Out
Now you understand the basic incentives of the main players in the system, so let’s talk about how it all plays out.

First, let me say that I’ve seen very little of the type of hours padding that our questioner brought up. I’m sure it happens, but I think it’s pretty rare for attorneys simply to make up hours and try to bill them. It’s a risky strategy, and one that’s likely to ultimately be detected, when there’s no work product to back up the hours claimed.

No, the pressures are more subtle.

Attorneys Billing By the Hour Have No Incentive to Be Efficient
For both partners and associates, there’s simply no reason to be efficient. As an associate, you rapidly understand that it’s not to your benefit to finish work too quickly. If you do, one of two things happen:

You are given more work immediately, which causes you to have to work even harder (when you probably worked really hard to finish whatever it was that you just finished, and kind of wanted a nap).
You’re not given more work immediately, which means you’re going to have to do even more work later, to make up for the hours you can’t bill today.
Consequently, your incentive is to drag all assignments out as long as possible, rather than trying to finish them as quickly as you can. This approach is different from simply goofing off. Instead, you might read a related journal article, track down a few additional cases that are roughly on point, or place a call to the law librarian to make sure you haven’t overlooked anything. All of these things, taken individually, could be legitimate uses of your time, but it’s unlikely the client would want you to do all of them, all the time.

Partners Care More About Quality Hours Than Associates Do
The second aspect of the equation, and where the incentives of partners and associates directly collide, is in billed hours versus hours the client will actually pay for.

If an associate spends ten hours on something that a client thinks should have taken two hours, they’re not going to pay that entire bill. Consequently, the partner loses money, because the client won’t pay for eight hours of the associate’s time (and that time can’t be repurposed to a project that would have been paid for). But the associate probably isn’t docked those hours, given that clients consistently complain about their bills, so they’re happy to keep drawing things out and letting the partners deal with the fallout. (In fairness, it’s often the case that an associate is handed an incredibly complicated project that the client thinks is easy, and not given any information about how many hours they’re expected to spend on it.)

The End Result
The end result of this system is a mess:

Associates who want to please their bosses by working efficiently quickly burn out. No one can work continuously at maximum capacity. Humans need downtime, which is eliminated when the reward for doing great work is more work. (Lawyer joke alert: Becoming a partner in a law firm is like winning a pie-eating contest where the prize is more pie.)
Associates who are slackers by nature, or perhaps just not as talented, are rewarded. When the primary metric of evaluation is hours billed, it’s better to be a bit thick, but diligent, than it is to be brilliant and speedy. If you’re a client, who would you prefer to have working on your case?
There’s no incentive for anyone in a law firm to come up with better, more efficient, ways of doing anything. Say you have a fantastic idea for improving the firm’s document management system, which would save everyone in the office half an hour a day. How likely is it that any of the partners are going to be interested? Yep, not very. Who wants people to go home half an hour sooner? That’s thousands of dollars a day in lost revenue!
Legal services cost more than they need to. If you build a system that rewards inefficiency, that’s what you’re going to get. BigLaw partners spend inordinate amounts of time arguing about bills with their clients, but, really, who can blame them for complaining?
Individual lives get turned into billable hours. If you’re an associate in a law firm, someone else owns your time, and, by extension, your life. Yes, you’re paid a lot, but you can be called at any moment, for any reason, and be told to get to work. Even partners have pressure to keep billing, or they risk losing their jobs. For me, and for other people I’ve talked to, it’s this aspect of law firm life that’s most unbearable. It’s one thing to work 80-hour weeks if you know you get two days off at the end. It’s quite another to be unable to make plans for a weekend away, because you have to be ready to return to the office at a moment’s notice.
So, to return to our original questioner, padding time, in the sense of using time inefficiently, is commonplace in law firms, for completely rational reasons.

Blatantly making up hours? Probably not so much.

paulrockliffe

15,697 posts

227 months

Wednesday 6th June 2018
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utgjon said:
That's not right in the UK in my experience. It's missing out a crucial step; the work is largely done on a fixed-price basis. Although the quote is based on hours to do the work and chargeable rates for different levels of seniority, there's often no scope to charge more if stuff takes longer to get done, unless the work changes substantially. What happens is the client is invoiced the estimated amount, that's booked against the account and people's time gets written off until the books balance for that piece of work. Invariably it's the juniors, who did all the work anyway, who's time get written off.

Obviously the bonus scheme isn't nuanced enough to ignore these arbitrary write-offs, so to get your bonus you have to do more work and hope that isn't written off too.

Add in that it's a competitive environment and it's easy to see why juniors justify working all the hours going as they think they have to do that to lcimb the ladder.

OMITN

2,136 posts

92 months

Wednesday 6th June 2018
quotequote all
It’s the same in banks, management consulting and other professional services.

There are people bringing in work - often highly complex and/or time critical - they’re partners.

The partners are the business owners, and so they care about two primary things: revenue and cost. They’re responsible for bringing in the revenue. But then the work has to be done, not by machines but by humans.

Humans cost a lot, so why dilute profits with an excess of people (we fired 900 people in a year after the 2007 crash - not enough work to do)?

So, why not systemise and automate? Actually there is a lot of it in modern law firms these days, but there is still a way to go. But you can’t yet automate away the nuanced, complex thinking and vast knowledge within lawyers’ heads. But there aren’t many of those lawyers and everyone wants a piece of them.

Then there’s culture: I used to be an M&A lawyer. I’ve done the going to work on Monday and home on Wednesday without any sleep in between. When you’ve done that (and survived) 12 hours a day feels easy. Of course it’s inefficient but that’s what everyone does, right? Couple that with a profession that demands perfection every time, and you can spend a lot of time doing stuff that non-lawyers don’t understand the value or importance (they do when they end up in court and discover your contract is watertight).

These days I instruct lawyers. You know what: I don’t give a st if they earn their (fixed) fees working 9-5 or all day and night so long as I get what I want on time and on budget.

Europa1

10,923 posts

188 months

Wednesday 6th June 2018
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paulrockliffe said:
That's not right in the UK in my experience. It's missing out a crucial step; the work is largely done on a fixed-price basis. Although the quote is based on hours to do the work and chargeable rates for different levels of seniority, there's often no scope to charge more if stuff takes longer to get done, unless the work changes substantially. What happens is the client is invoiced the estimated amount, that's booked against the account and people's time gets written off until the books balance for that piece of work. Invariably it's the juniors, who did all the work anyway, who's time get written off.

Obviously the bonus scheme isn't nuanced enough to ignore these arbitrary write-offs, so to get your bonus you have to do more work and hope that isn't written off too.

Add in that it's a competitive environment and it's easy to see why juniors justify working all the hours going as they think they have to do that to lcimb the ladder.
When I was in private practice thankfully the firms I worked at were more enlightened and write offs were pro rata across the team regardless of seniority.

What also needs to be factored in is the number of unbillable hours people have to do - admin, training, supervising juniors, business development...

Our time recording system was clearly designed by a sadist: shutting down timesheets on a Saturday or Sunday, a box would flash up "Warning: [date] is on a weekend!". "I. Sodding. Know", we would mutter through gritted teeth...

I do not miss living my life by 6 minute units.

rog007

5,759 posts

224 months

Wednesday 6th June 2018
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Have a neighbour who’s a solicitor and is out of the house for long hours it seems. Can’t say he’s working long hours because I’ve not been there; just he’s out long hours.

dcb

5,834 posts

265 months

Wednesday 6th June 2018
quotequote all
4x4Tyke said:
The IT industry used to be the same. In my early career, all-nighters in the run up to release day in software houses were common. These became known as death march projects. People can manage about eight hours a day of high mental effort, beyond this peoples mental capacity declines sharply to the point, they become counter productive. Mistakes rise rapidly that take longer to fix. When this happens over a protracted period, mental and physical health suffers, anxiety, stress and that window of high productivity becomes shorter over time.

Nine women can't make a baby in one month
+1

Work smarter not harder.

One of the greatest ever economists, JM Keynes, liked to be finished work by 3:30 pm,
to keep himself fresh for the next day.

In my own experience, something major like 2-3 million lines of safety critical C++ isn't something
you should be working on under anything less than the best possible conditions.

Nuclear reactors, aviation and automotive are some possible areas where
attention to detail is critically important. A single misplaced space or punctuation
mark could mean the airplane could land in the skyscraper.

In comparison, producing something medium sized like 100K lines of simpler
application area like financial software is *much* easier. Get that wrong and
people merely lose money.



anonymous-user

54 months

Wednesday 6th June 2018
quotequote all
fido said:
I worked in a bank where they once asked the whole team to work EVERY DAY until the problem was sorted - so basically come in weekends at a slightly later start time. Not a problem - and didn't feel tired at all - until the second weekend that is. Then I started having hallucinations .. pillars on the office/trading floor would start appearing when I walked around outside work! .
That just sounds bizarre. We work 12 hour days 28 days straight. No one ever has any visuals. I once did 6 weeks straight, off for 1 week and back for 9 1/2 weeks. Again, no days off, 12 hour days. Tired at the end of it but it's doable.