How Are Billable Targets Calculated

[boyo]

As I work through articles I've began to wonder how billable targets are calculated at big law firms. For example, I realize as a student a lot of my work is written off or down, and I imagine the same is true for junior associates (though likely at a lesser level).

When firms track to see if you're making their targets, I assume they exclude the hours you've worked but that are not billed to the client? Or is that not the case? If the former, how does one track progress if you don't exactly know what partners are writing off?

[KOMODO]

In most big law firms, your target is based on hours docketed, not collections. This is because as a junior, you have no control over write-offs, which may be granted for reasons completely unrelated to your efficiency (partner quoted the work too low, the transaction died so a discount is applied, client is in distress but has a good relationship with the firm, etc.). However, as you become more senior and start to make your "business case" for partnership, the firm will sometimes consider your "realization rate", which is the % of your docketed time that gets collected, because it forms part of the bigger picture and it does matter once you're a partner. Also, if you're routinely less efficient than your peers at a similar level or the partners in your department feel that you're spending way more time on things than you should, they will (or should) speak to you about that reasonably often to make sure that you are progressing at the expected rate. 

[easttowest]

Komodo covered it.

However, I have heard of anomalous situations where associates have been directed to write down their own time in the time-keeping software, which would affect your progression towards the billable target, but that’s not a widespread practice, to my knowledge. 

[boyo]

Thank you both for the insight!

[2easy]

Let's say I had to get 150 billable hours a month. How many hours would I actually be at work for?

[LMP]

That can vary based on your practice area and how you do work. Not to mention your level of seniority. 

I know a few associates who have it down to almost a science. They work 12 hours, they bill 12 hours (or very close to it). Others, not so much. There isn't really a magic ratio. 

 

[Jaggers]

In my experience, billing 150 hours in a month probably meant I was working 50 hour weeks consistently. So about 200 hours worked to bill 150. That will get you a roughly 1700 hour year if you do it throughout the year and take some vacation.

[Dinsdale]

It's a tough, relentless target. Hate to be negative, but it really is. I agree with the above that you probably need at least 200 hours "in the office" to achieve 150 billable.  If you want to take weekends off, that 8:00 a.m. to 6:00 p.m. five days a week.  And that means full attention to the job while you are there.  There isn't much time for socializing, lunch, CLE, medical appointments, childcare demands, personal needs or much of anything else.  No leaving early on Friday to beat the traffic to Muskoka, unless you make up the time elsewhere.  And then, of course, 1,800 is just the minimum standard.  The keeners are shooting for 2,000.

Edited November 7, 2023 by Dinsdale

[Jaggers]

I never once hit 1800 hours. 1700 is doable with a mostly 8-6 or 8-7 schedule and leaves some time for that stuff. 

[Pantalaimon]

I'm finding that more and more of my peers are aiming for "just enough to avoid trouble", and fewer for 2,000 or even target.

[QueensDenning]

21 hours ago, 2easy said:

Let's say I had to get 150 billable hours a month. How many hours would I actually be at work for?

Some of my articling student colleagues hit 200+ hours a month consistently. But their billing practices are... creative...

I'm noticing that a lot of students just break up their time in the office by matters worked on through the day, without accounting for breaks and the like. I think this is ethically suspect but I haven't heard of anyone getting in shit for it. Everyone knows that at the end of the day our time is being written off, so it's easy to see how tacking on the additional time doesn't impact the client. I can guarantee that nobody is paying $5000 for my memos.

I would imagine that as an articling student, the quality of your work and how much people like you is what gets you re-hired, rather than the number of hours you are docketing (assuming you are not vastly below the cohort's average). At least that is what we are told. 

[Lawstudents20202020]

Just wait till they get the billing realization talk.

[OzLaw16]

2 hours ago, Pantalaimon said:

I'm finding that more and more of my peers are aiming for "just enough to avoid trouble", and fewer for 2,000 or even target.

This has been my experience as well as a junior associate in a large Bay firm. The overwhelmingly common sentiment I've heard from people in my year and the year right above me is that a bonus would be nice to have if it happened to fall into your lap, but that it's not worth actively gunning for. Maybe the recent bump in the associate pay scale has had an effect - I think it's becoming increasingly harder to convince people to sacrifice their lives for a year for an extra $15-25K when $130K+ is already more than enough for the average 20-something year old.

[Apple]

Bonus structures are largely not incentivizing after you earn a certain amount of money. At some point the time investment (and the corresponding losses that result) just aren't worth the monetary valuation on it. Time is our most important asset. 

[Pantalaimon]

On 11/7/2023 at 4:22 PM, QueensDenning said:

Some of my articling student colleagues hit 200+ hours a month consistently. But their billing practices are... creative...

I'm noticing that a lot of students just break up their time in the office by matters worked on through the day, without accounting for breaks and the like. I think this is ethically suspect but I haven't heard of anyone getting in shit for it. Everyone knows that at the end of the day our time is being written off, so it's easy to see how tacking on the additional time doesn't impact the client. I can guarantee that nobody is paying $5000 for my memos.

I would imagine that as an articling student, the quality of your work and how much people like you is what gets you re-hired, rather than the number of hours you are docketing (assuming you are not vastly below the cohort's average). At least that is what we are told. 

Some people didn't pay attention in ethics class, I suppose.

[Rashabon]

The bonus structure in 2021 was pretty nice so it was good timing for me to have my biggest year. I was on the higher end of people in my year/group for the most part but the last two years have been quieter. Sometimes the hours it takes can be a real drag.

[easttowest]

We’ve kind of gotten away from the original question, but on the amount of work it can take, I made a commitment this year to only work on weekends if it was absolutely necessary and can’t tell if it’s an improvement or not. I rarely leave work before 8pm. I’ll hit target in the next five weeks and don’t plan on working past Dec 22. I’ve taken 3 weeks off this year already. 

[C_Terror]

Only speaking as a corporate associate, but while most people are correct that you're maybe "working 200" hours to hit 150, those 150 can hit you at the worst times. As an articling student and junior lawyer, you'll sometimes get zero work during the day and then get crushed in the evenings when partners/senior associates finally get to reviewing/commenting on your work. And even though your target is 150, the reality is that corporate work and deals fluctuate wildly, so some months you might bill 120, and others you might bill 200+. 

If big law (corporate work) is actually consistently 150 hours, 9AM-6PM, etc, there would be a lot less attrition in the industry. 

[Talleyrandophile]

8 hours ago, C_Terror said:

Only speaking as a corporate associate, but while most people are correct that you're maybe "working 200" hours to hit 150, those 150 can hit you at the worst times. As an articling student and junior lawyer, you'll sometimes get zero work during the day and then get crushed in the evenings when partners/senior associates finally get to reviewing/commenting on your work. And even though your target is 150, the reality is that corporate work and deals fluctuate wildly, so some months you might bill 120, and others you might bill 200+. 

If big law (corporate work) is actually consistently 150 hours, 9AM-6PM, etc, there would be a lot less attrition in the industry. 

Agreed. I find this one of the most difficult aspects of practice, though note that it does get slightly better as you get more senior and gain a little more control over your workflow.

[AllWellAndGood]

10 hours ago, C_Terror said:

Only speaking as a corporate associate, but while most people are correct that you're maybe "working 200" hours to hit 150, those 150 can hit you at the worst times. As an articling student and junior lawyer, you'll sometimes get zero work during the day and then get crushed in the evenings when partners/senior associates finally get to reviewing/commenting on your work. And even though your target is 150, the reality is that corporate work and deals fluctuate wildly, so some months you might bill 120, and others you might bill 200+. 

If big law (corporate work) is actually consistently 150 hours, 9AM-6PM, etc, there would be a lot less attrition in the industry. 

It's been a weird year, but on a few occasions now ive had a month under 100 billed hours, followed immediately by a month of 250+. It wouldn't be as bad except you never see it coming as a junior.

[99problems]

On 11/6/2023 at 5:55 PM, 2easy said:

Let's say I had to get 150 billable hours a month. How many hours would I actually be at work for?

Check this out for a ballpark: https://law.yale.edu/sites/default/files/area/department/cdo/document/billable_hour.pdf

[WhoKnows]

On 11/10/2023 at 2:01 AM, C_Terror said:

Only speaking as a corporate associate, but while most people are correct that you're maybe "working 200" hours to hit 150, those 150 can hit you at the worst times. As an articling student and junior lawyer, you'll sometimes get zero work during the day and then get crushed in the evenings when partners/senior associates finally get to reviewing/commenting on your work. And even though your target is 150, the reality is that corporate work and deals fluctuate wildly, so some months you might bill 120, and others you might bill 200+. 

If big law (corporate work) is actually consistently 150 hours, 9AM-6PM, etc, there would be a lot less attrition in the industry. 

Agree on a lot of this, but if you're a corporate associate on a big deal that's only realizing 75% of their time (150 billable to 200 worked), you've got some time leaks. The best part about those deals is you can run the clock. I'm realizing nearly 100% of my day on those days. 

[Jaggers]

Yeah, my work was litigation, which is harder to bill a whole day since you often work on a bunch of smaller files. But assuming you eat some lunch, have a coffee break, use the bathroom, socialize a bit, etc., you’ll see at least an hour a day leak without even trying.

[Lawstudents20202020]

2 hours ago, Jaggers said:

But assuming you eat some lunch

My desk is full of quick snacks to get around this issue 

[Cool_name]

On 11/7/2023 at 7:04 AM, Dinsdale said:

It's a tough, relentless target. Hate to be negative, but it really is. I agree with the above that you probably need at least 200 hours "in the office" to achieve 150 billable.  If you want to take weekends off, that 8:00 a.m. to 6:00 p.m. five days a week.  And that means full attention to the job while you are there.  There isn't much time for socializing, lunch, CLE, medical appointments, childcare demands, personal needs or much of anything else.  No leaving early on Friday to beat the traffic to Muskoka, unless you make up the time elsewhere.  And then, of course, 1,800 is just the minimum standard.  The keeners are shooting for 2,000.

I agree, despite how hard I’ve tried, I haven’t been able to hit 150 all year. 
 

I’m always far above it. 😋

 

On a serious note, to hit that you are likely looking at being in the office from 8 to 6, with occasional early Friday’s and occasional weekend work.