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How Are Billable Targets Calculated


boyo
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boyo
  • Law Student

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?

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KOMODO
  • Lawyer

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. 

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easttowest
  • Lawyer

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. 

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