Okay, I've always wondered whether the companies that pay big law firms know what big law associates do while they're running their billing clock (DTE).
My personal favorite illustration was Christmas time two years ago when a senior associate at our firm called to ask me "If I had time." This guy was notoriously a little pill to work with -- just who I wanted to be with during my holiday weekend.
This lawyer had me stay around all night just in case he needed some edits, things he could have easily given to the Doc Services folks who were paid to stay there all night. But oh no, this jackass' misery needed some company, some $400 an hour company.
There's an unwritten rule in biglaw that, if you're at the office after 6pm (for some it's 6:30 or 7pm) waiting for work to come in, even if you're not actually working you still bill your time.
So I stayed at the office all night watching Thursday Night Foobtall, a few movies on Netflix, talking to my girlfriend and dozing off. The corrections came in at 2:30, I turned the changes in fifteen minutes, fought with this moron for 15 minutes more and then took a cab home on the client's bill. Assholio told me to be in first thing in the morning by 8am. Even though I had nothing to do from 8am - 10am, I still billed my time, because associates were expected in the office by 10am, and I was coming in earlier than I normally did. I also billed for travel time both ways.
And do you know what? I think most associates at my firm would have done the same. I'm not sure whether or not partners bill this haphazardly (I imagine not), or know that it's going on (I imagine so). Do you think clients know this shit goes on?
That's an incredibly egregious case of a senior associate running up the bill. I imagine that clients are aware of the liberties taken with the billable hour and require a good deal of a juniors time to be written off as a means to combat this.
One of my fondest memories regarding (DTE) comes from a colleague who pulled consecutive all nighters closing a deal with opposing counsel in Asia (thus the lack of sleep for all involved). He informed us that he billed all 24 hours in a day. This is really not possible. When asked if he stopped to use the bathroom he replied, "Yeah. I actually had to s*&^ several times. I think it was diarreah from the stress, but I thought about that God d&*% deal every second I was on that toilet."
Okay, understanding that lawyers are liberal with their billing is one thing. But do you think clients know that lawyers are sitting around doing absolutely nothing (or watching Netflix) and billing for it?
Hard to say. Also hard to say if your experience is similar to that of associates at other firms and during different economic periods. Some associates and some practice groups are constantly busy and wish they could watch Netflix until 2am. I think the more interesting question is whether clients have an incentive to care or implicity encourage abuses of the billable hour.
Clients certainly understand that when they agree to a fee arrangement that caps the bill at $Xmm, firms are going to make sure they hit that number come hell or high water. Usually this is achieved through due diligence or doc review. Its very easy to generate absurd bills when you put together a small army of juniors to abstract every single piece of paper the company has ever produced. Complete waste of time, money and people. The purpose of diligence is to understand a business and to allocate risk. Not cart blanche to maximize leverage.
Another aspect to this is that certain clients (and in this sense I define client more broadly to include the idividual decision maker(s)) don't inernalize the cost of legal services. It's an externilization borne by their investors and/or shareholders at the end of the day. It also doesn't hurt that legal fees can be deductible.
Interesting to hear such a disparity of views in reaction to the post 7pm scenario. Interesting also to hear many biglaw lawyers get outraged, not at the ethical shame of the whole thing but more at the fact that they wish they knew this was acceptable because it would have helped them meet their bonus.
I should clarify that I would never bill time for sitting around in the morning before 10, but I would if I had specifically been told to come in early because there would be work.
Oh, and I got a big kick out of the fact that someone at my office forwarded me this conversation and said, "did you hear about this?"
Anybody who hasn't heard about the post 7pm scenario must have never worked on a big deal in their life. Yeah, after canceling dinner plans on a Saturday night, they just hung around for hours waiting for the other side to get back the docs they promised days ago... I've recently been told that several major firms have a run the clock for as long as your in the office policy when on an active deal. This isn't surprising. How many times have associates billed every second of their time in the office for weeks if not months on end?