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[noobie]

Hi,

I recently transitioned from a small firm to a big law at the beginning of the year.  I have a few questions for those who have BigLaw experience:

First, how important is it to hit your billable req your first year?  I'm on pace so far to be about 50 hours short.  I could try to pick up the pace but we also haven't been getting as much work in recent months.

Second, what is "safe" realization rate?  I was told that my current rate is around 95% but that 100% is what I should shoot for.

Thanks in advance.

[khazzah]

Unfortunately for you, I think both your questions are very firm specific. Ask the partner(s) in charge of associate review/performance, and if you're not comfortable doing that, ask some of the more senior associates.

[petethebody]

First, how important is it to hit your billable req your first year?  I'm on pace so far to be about 50 hours short.  I could try to pick up the pace but we also haven't been getting as much work in recent months.

Hours become more important the slower work gets.  I wouldn't talk about this with anyone.  I would hit the pavement and find some more work, even if it means having a few awful months. 

However, all this with the caveat that they are more forgiving of first years.  Still, it is crucial to show initiative at that stage. 

[noobie]

I haven't really talked to anyone else in our office.  An acquaintance in one of our sister offices mentioned that the firm wants at least 90% realization rate from the partners or they will get booted.  The way things work in our office, any new work gets equally distributed.  So I'm a little more concerned about my hours because I feel like I can hit the target realization rate as long as I have plenty of work (we do flat fee work). 

[petethebody]

Are you an associate or a partner?

As an associate, you are not usually graded against a realization rate.  If you are, they usually speak in terms of "hours billed" instead of "billable hours."  That said, the number is in your file when it comes time for review.  The practical effect for having a low realization rate is that you get less work.  If you are known as the person who bilks clients, or is generally slow, partners will stop coming to you.  However, this is all tempered by the client - everyone knows who the clients are that demand writeoffs regardless of the worth of the time billed - just because they can.  So, take that with a grain of salt.

As a junior partner, I have heard that you need above 85% to 90%.  But, firms are often more foregiving if you have an explanation.  For example, the case blew up and we were on fixed fee - there was nothing I could do. 

You may also want to check and make sure the same metric for realization rate applies for flat rates as for billable hour work.  From an associate's standpoint, it should not matter for your hours if the client has a flat fee or billable arrangement (unless they have told you otherwise). 

As a partner, it plainly does matter.  I know of one partner who was stuck with a really low fixed fee case, where the price was negotiated during the fallout of the recession.  He always went over on time, so he wrote it off himself and got more work to compensate.  He billed the minimum number of hours (1800 I think), but was working 16 hour days all year.  It can be dangerous - hedge billable cases against flat fee ones. 

[noobie]

Sorry for the confusion.  I'm a patent agent.  I mentioned the partner's expected realization rate to give some context to my numbers.  My partners have stressed the importance of maintaining good realization rate (probably because it affects them much more?) than hitting my billable hours req. 

As far as I understand, in our flat fee system, my realization rate is measured as my billable hours (times my billing rate) divided by fees collected.  All in all, I feel as if I'm doing ok given it's my first year (esp since it started a little rough).  I'm more concerned about my hours since my rate should naturally go up as I am getting more and more efficient.  I usually go to the partners for more work but they rarely give me anything more than a day or two at a time.  It's slow right now.

Just for my sanity, when should I be really concerned about the lack of work?  I feel like we have half a person too many in the office.  If one were let go, it would probably work out really well.  Being the new guy, I'm a little worried.

[petethebody]

Don't be too terribly worried.  Everyone is slow right now.  My guess is that is part the ordinary summer slowdown, part the economy slowing down.  I feel you on that 1/2 person too many.  Just stand out as an eager person without looking too desperate.  Help out with other projects.  Help out with business development. 

Unless things slow down more, I would just chalk it up to the economy.  Once you hit 10% off your mark by midyear, it is time to start hustling.  That I don't know how more than that can be made up in half a year. 

As for your realization rate, I always thought that measuring hours worked against flat rate for performance was absolute crap.  All that tells the firm is whether or not they priced their services correctly to maximize profit.  It does not even tell them whether they made a profit or not - just whether they could have made more.  Profit is determined by revenue (sum of your flat fee cases) minus expenses (your salary).  It does not even tell them whether you worked slow, fast, well, or poorly.  Don't get me wrong - fixed fees are great for the profession, but if you walk away from the billable hour, you need to do so entirely.  Ah lawyers - not the greatest managers because the incentive to manage is not there.  Enough of a rant. 

Don't stress about something you cannot do anything about.  Find more work to the best of your ability.  At this point you do not have enough marketable skills to land another job, so just focus on making it at this one for the next six months or year. 

[noobie]

Hi Pete,

Thanks for the extremely helpful feedback.  Not that it changes my outlook drastically but I do already have a few years of patent prosecution experience at a small firm (this is my first year at a BigLaw- generally considered top 10 in patent prosecution).  I've been tempted to look at options (I've been getting a few calls from headhunters asking me to apply) but realistically most viable options would be a step or half a step down from my current gig.  Thanks again.

[AnotherCog]

Hi,

I recently transitioned from a small firm to a big law at the beginning of the year.  I have a few questions for those who have BigLaw experience:

First, how important is it to hit your billable req your first year?  I'm on pace so far to be about 50 hours short.  I could try to pick up the pace but we also haven't been getting as much work in recent months.

Second, what is "safe" realization rate?  I was told that my current rate is around 95% but that 100% is what I should shoot for.

Thanks in advance.

Ask yourself this: would you rather be in the category of people that hit their hours or in the category of people that didn't hit their hours?  If there's any way that you can get your hours back on track, do it. 

Perception is 9/10ths of the challenge when working in BigLaw.  Did you take a week off somewhere?  Someone can very easily look at your hours and view the deficit as being the result of "not being motivated," instead of work just being slow.  Is anyone over their hours by fifty?  If so, someone could also view your lack of hours being due to a "lack of quality," since partners prefer the work of that person over yourself. 

As far as realization goes, it depends on the firm.  Who told you that you should shoot for 100%?  If it was one of your bosses, then you should definitely listen.