Life at the Law Firm

Don't let anyone fool you. Law firms and lawyers are not all alike. Rather, firms are groups of individuals, each of whom has a different personality, a different perspective, and different expectations. Your life at one firm may not even resemble your friend's life at another.

The Law Firm as a Business



Law firms are essentially like any other businesses, whether they wish to view themselves as such or not. Much like a company manufacturing widgets, the law firm must sell a product to support its employees (staff and associates), pay its overhead (rent, insurance, supplies), and provide to its owners (partners) a return (distributions) on their investment (capital). The law firm's product happens to be legal services, but like the widget company the firm must find a market (clients) for its products and bill its product at a competitive rate (legal fees) in order to survive and prosper (strive to satisfy all partners, associates, and staff with regard to their salaries, work, distributions, benefits, and amenities). Ten years ago, most law firms would not have portrayed themselves in this manner, but today firms ignore the business analysis at their peril.

Law firms have traditionally been organized as partnerships because state statutes forbade professionals, such as doctors and lawyers, from incorporating. Incorporation would have insulated the owners from liability for their professional conduct, and that was frowned upon. So the lawyers who started firms organized them as sole proprietorships or partnerships and hired employees (associates) to help them with the work. In addition, before a law school education became the most accepted method of training for the bar, associates would serve an apprenticeship, known as reading the law, at the office of an admitted bar member. In time, those associates were admitted to the bar, clamored to become an owner of the firm, and the partnership track was born.

Although modern statutes enable lawyers to incorporate their practices as professional corporations, the partner/associate dichotomy is still used to describe shareholders and legal employees, and the push for partnership (in this case an offer of shareholder status) continues to drive law firms.

Back to widgets. How do firms make their income, and what impact does that have on your life as a lawyer? Since the motive is to keep the firm running, income in a law firm must meet and, ideally, exceed expenses. In selling widgets, it is a matter of setting a price that covers costs, letting those who need widgets know that you make them, balancing quality against the price the market will bear, and rendering your sales service efficiently and in a manner to encourage repeat business.

In the legal business, the "price" of service can be (1) a predetermined dollar amount per hour times the number of hours spent on a matter (e.g., $50 per hour times 4 hours spent = $200), (2) a set fee for a specified service (e.g., $300 for all residential real estate settlements), (3) a contingency fee that is a percentage of money won for the client (and no money if the matter is lost) regardless of the time spent (e.g., one third of the monetary award of $3,000 = $1,000), or (4) a combination of these methods. The first is the most prevalent billing arrangement. Contingency fees are charged by some litigators (particularly for personal injury matters) but are disfavored by larger firms because of the difficulty in budgeting income.

Regardless of the billing practices of your firm, you will be required to keep track on a daily time sheet of time spent on each client matter in increments of 6, 10, or 15 minutes, depending upon firm procedure. This time is called "billable hours" and can vary from your actual clock- in/clock-out time by quite a bit. You could get to the office at 9 a.m. and leave at 6 p.m. yet only bill 7 of those 9 hours because of lunch, coffee breaks, work on pro bono, or other non-billable matters.

At the end of a billing cycle, the firm typically compiles a report by computer of the time each attorney has billed to each client matter. If billing is done by hourly rates, the computer multiplies the amount of time spent by each attorney's billing rate (which varies according to the attorney's experience) to calculate the bill for the client in that billing cycle. When the client pays the bill, the firm has received its income.

Clients

Clients are your firm's customers. If you have chosen a firm with an institutional base of clients (clients who come to the firm for services long after the original partner who introduced them to the firm is gone), life at that firm will differ substantially from a firm whose clients are loyal only to the individual attorneys who represent them. Time was (and not too long ago) when a firm's clientele was a stable commodity. Clients had longtime loyalties to firms and took their business elsewhere only under rare circumstances. Trends now are toward client hopping, splitting up legal work among a number of firms, or hiring in-house counsel to do work that outside counsel once handled.

The impact on your life: pleasing the client and keeping the bill within competitive bounds has become the focus of law firm attention. Short turnaround times, tight deadlines, and around-the-clock availability have become the norm. Once a leisurely and "gentlemanly" profession, the law now features attorneys who render legal services on their car phones during the commute to and from the office, who respond to beepers strapped to their waists, and who fear the phone on Friday afternoon lest it be that invaluable client calling with a Monday deadline.

In addition, attracting new business has become the lifeline of some firms. In the 1970s, the restraint on advertising by lawyers was lifted. Although most law firms do not advertise like your local car dealer, they do rely on partners to attract business and on all attorneys to hold and serve existing clientele.

How will these factors affect your life at a firm? Whether or not you will be expected to develop business as a partner (perhaps even as an associate) or just to keep the existing clients satisfied may dictate the types of activities you pursue outside the office. And whether your personality is suited for such endeavors (or can be molded to fit them) may determine your satisfaction and success at a particular firm.

Type of Practice

The type of practice of any particular firm depends upon, or is the sum of, what each attorney brings to the firm or retains for the firm. A firm does not magically attract an environmental or litigation practice by putting a notice in its window. Rather, clients come to a firm based upon the expertise and reputations of the attorneys at the firm.

Often you will find firms or departments within firms that are labeled as one type of practice but really handle either a wider variety of matters or a much narrower practice than one would expect. A tax department may be handling general corporate matters or it may be doing criminal tax fraud litigation. An international practice may be simply International Trade Commission work. An antitrust practice may dry up and a firm or department turn toward general litigation. This, of course, will affect the type of work you do, so don't make assumptions from departmental or overall firm self-labeling. Many firms ultimately specialize only in what their clients bring to them.