law firm associates

Billable hour expectation for Associate Attorneys

I recently posted about the ‘Billable hours target for first-year lawyers at selected [Australian] law firms‘ and one of the most read posts on this blog is from way back in August 2016 – ‘Why asking someone to work 2,000 billable hours a year will kill their spirit‘, so when the Managing Partner Forum recently published the above results (admittedly from mostly American Managing Partners) from an audience polling question at one of its webinars on the issue of billable hour expectation for Associate Attorneys, I thought I would share it.

It’s interesting to note that nearly 70% of respondents expect their Associate Attorneys to bill over 1700 hours a year, with almost 10% expecting over 1900 billable hours per year.

That’s a lot of billable hours! And if we consider the ‘10-20-30-40 Leverage Rule‘, then the implication is very bleak for junior lawyers!

And as I say to those entering the legal profession who need some understanding of how many hours they need to work to meet their billable hour target, take a look at Yale Law School’s ‘The Truth About The Billable Hour‘.

While I am all for the profit motive, I maintain that if owners and managers of law firms want to understand why they have a high attrition / burnout rate in their teams, take a close look at what expecting someone to bill 1700 hours a year is actually doing to them!

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Survey: The cost of replacing that departing associate…

If you’ve wondered how much replacing that associate or senior associate who just left you is going to cost, then a recent report from Big Hand provides the answer: circa $500k.

That’s right, a cool half a million dollars!

Those costs won’t always be upfront and apparent, they will include:

  • a possible increase in salary for your replacement associate over your previous associate’s salary (due to market pressure) – which is somewhat ironic as salary may well be the reason the old associate left you!
  • commissions to talent agents to find you said new associate
  • increasingly – signing on bonuses
  • training costs over the first 12 – 18 months to bring the new associate up to scratch on your firm’s systems and business development strategy.

The list of actual and hidden costs here is almost limitless, and so the overall cost to your firm of replacing that departing associate/senior associate could actually be a lot more than $500k. Which begs the question:

with 49% of surveyed firms having said they had experienced an increase in associate attrition, you have to wonder why this isn’t an area where more firms are focusing their attention?

You also have to ask: Does asking someone to work 2,000 billable hours a year have something to do with these attrition rates among associates?

And with 75% of surveyed firms having said they have seen a drop in demand for legal services, is this a cost you really want to be incurring right now?

If you need help looking at your firm’s strategy, how to retain associates and differentiating your practice from the crowd, get in touch!

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