what percentage of billables should an associate attorney expect to reiceve?

At 20% you’ll be profitable. It’s a good number. This guideline meets the needs of the associate while also meeting the requirements of the law firm. You can make 20% work in your firm.

Full Answer

How do you calculate billable hours for an associate attorney?

Sep 26, 2018 · The associate also is entitled to receive a client origination bonus of 10% for business brought to the firm. Base salary, 1200 annual billable hour minimum expectation, quarterly production bonus of 40% of working attorney collected fees less salary paid for the quarter, and 20% client origination bonus for work done by others in the firm.

What is the minimum associate billable hours expectation?

Percentage of collected billable hours will start at 17%. That gives associate $51,000 in billable hour money, on top of approximately $50,000 in salary. Total pay is about $101,000 plus we cover almost all expenses and benefits. That is about 33% of what we collect from their work. They have a one year trial period to get up to 25 hours a week.

How many Billable Hours does it take to become a lawyer?

I have long advocated paying the associate about twenty percent of their revenues, if they aren’t involved in generating new clients for the firm. Let’s drill down for a moment on the 100-hour minimum. Assume the associate is billing at $250 per hour (clearly an important number in this discussion) and you’re collecting $25,000 per month.

What is a reasonable amount of time spent by a lawyer?

We invariably discuss numbers. When I do the math, I find associate compensation hovering around 20% of the dollars produced by their work. An associate billing $300,000 per year is, more often than not, earning about $60,000. The numbers vary somewhat depending on benefits, support staff level, etc. But overall, 20% is the number I hear most often.

What is a good realization rate for an associate?

Obviously, your goal is to reach a realization rate of 100% or higher for each case or project. Any increase in realization rate adds profit to the firm's bottom line.Jun 25, 2019

What is a reasonable number of billable hours?

It's not a complicated equation – the more hours you bill, the more revenue for the firm. Firms “average,” “target” or “minimum” stated billables typically range between 1700 and 2300, although informal networks often quote much higher numbers.

How many hours should an associate bill a month?

I think, in a small-firm retail practice involving lots of clients getting billed each month, that you should expect a minimum of 100 hours per month (annualized) in billable work.

Is 1950 billable hours a lot?

In typical regional, national or international litigation firms it is simply not possible to work a 40 hour week and even stay employed, let alone advance. Typically firms require 2000 billable hours a year. Some lifestyle firms require less, like 1950 billable hours.

What percentage of hours should be billable?

For most service companies, 30 percent is considered a good efficiency rate, while 50 percent would deliver extremely efficient employee costing. That means out of eight hours, if a technician does approximately 2.4 hours of billable work per day, the billable hour percentage averages 30 percent.

Is 1700 billable hours good?

A. For many years the national norm for all firms has been around 1750 billable hours - much higher for litigation firms - often in the 1800-2000+ range. In my experience I find 1650-1700 a good target for most firms.Apr 22, 2015

Is 200 billable hours a lot?

depends on the firm and the client. big firms and big clients, 200 hours is 200 hours. small firms and small clients, 200 hours might be 300 hours. I'd say that on average I work about 20% more than I bill.Aug 4, 2011

How hard is it to bill 2000 hours?

For example, if you want to reach a goal of 2,000 hours annually, you would need to bill for roughly 40 hours each week, or eight billable hours a day. You may not work exactly eight hours each day, but this breaks down what you should average in a day, week, and month to reach your annual goal.Oct 20, 2021

How do lawyers track billable hours?

1) The legal software stopwatch The stopwatch is a tried and true means to track time. Most modern legal software systems provide this time-tracking feature. For example, if a lawyer opens a case file, there's usually a digital stopwatch they can click to begin tracking the time spent on a task.Aug 30, 2021

What happens if you don't meet your billable hours?

Associates who failed to meet their hours, regardless of the quality of their work, did not receive bonuses, suffered pay cuts, and were the first to be let go when layoffs were required. After all, all associates are expected to produce quality work.

How do you get 1800 billable hours?

To achieve 1,800 billable hours, an associate would work her “regular” hours plus an extra 20 minutes Monday through Friday, or work one Saturday each month from 10:00 a.m. until 5:00 p.m. The first option would give an attorney 1,832 billable hours, with a total of 2,430 hours spent “at work” (AKA: including ...

How can I increase my billable hours?

Here are five things you can do to make sure you're maximizing your billable hours:An Hour's an Hour, No Matter How Small. ... Write Everything Down as You Do It. ... Stop Goofing Off. ... Be Smart About Describing Your Hours. ... Use Your Staff.Aug 21, 2014

There must be a better way

I get asked about associate compensation more than I get asked about any other issue. Everyone wants to know how much we need to pay to get and keep someone good. We need excellent associates if we’re going to fulfill our promises to our clients. That all starts with getting the compensation right.

Math is a good starting place

Historically, the general rule was to pay associates something like one-third of the revenue they generated. An associate producing $300,000 of revenue got paid about $100,000. The older lawyers said something like “a third for the poor schmuck, a third for overhead, and a third for me.” Those days have passed.

Associate pay issues open a can of worms

You’re asking the associate compensation question for one of these reasons:

What is the first order of business when deciding to work for big law?

Adam Pascarella, in an article offering advice to junior associates, listed determining your goals as the first order of business when deciding to work for big law. There are a couple of scenarios. If she plans to stay and make partner, then she must go above and beyond the required billable hours in addition to out-performing in other law firm areas. Furthermore, the hours only get longer as she moves up the ladder to partnership status.

How many hours does an attorney spend?

How many hours do 1,892 hours take up a young attorney’s life? Yale Law developed a chart that gave reasonable amounts of actual time spent for 1,800 billable hours and 2,200 billable hours. The chart accounts for vacations, coffee breaks, conference times and even chit-chat – all those activities that take up an attorney’s time but are not billable.

Do first year associates count billable hours?

First-year associates will probably count Billable Hours instead of sheep while trying to fall asleep. It’s just not something that will go away and quite possibly haunts the minds of several newly minted attorneys while trying to get a good night’s rest. But the hoops of billable hours are manageable. A first-year associate just has to decide in the beginning how much the chase for the golden ring is worth, and go from there.

How many hours can an associate work?

To achieve 1,800 billable hours, an associate would work her “regular” hours plus an extra 20 minutes Monday through Friday, or work one Saturday each month from 10:00 a.m. until 5:00 p.m. The first option would give an attorney 1,832 billable hours, with a total of 2,430 hours spent “at work” (AKA: including performing non-billable activities.).

How Do You Properly Compensate (and Incentivize) Associate Attorneys?

By Philip J. Kavesh, J.D., LL.M. (Taxation), CFP®, ChFC, California State Bar Certified Specialist in Estate Planning, Trust & Probate Law

WANT MORE HELP?

If you specifically want additional information about hiring, training and managing associate attorneys, as well as how to compensate and set up bonus structures for Associate Attorneys, check out our in-depth training programs below:

ABOUT THE AUTHOR

Philip J. Kavesh is the principal of one of the largest estate planning firms in California – – Kavesh, Minor and Otis – – now in its 33rd year of business.

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How to be successful in staffing?

To be successful, you want to be the person who is top of mind when a someone is staffing a matter. That will depend more on your substantive and soft skills than your hours. As you grow in your career, that person staffing the matter will change from a partner to a client.

How many hours do you need to be in good standing?

Most large, highly profitable firms—assuming they set billable targets—will require 2,000–2,100 billable hours as the minimum to stay in good standing, i.e., to receive a full year-end bonus and remain on track for partnership.

First Determine A Base Salary

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Calculating The Bonus Formula

Have Some Objections Or Concerns?

One Final Tip: Bonusing Support Staff