No Time To Churn

As civil lawyers continue to argue over the death of the “billable hour” and the merit of alternative fee agreements, criminal defense lawyers chuckle. The prophets think they’ve invented something new, except that criminal defense lawyers have been using flat fees forever of necessity.  But then, it’s not like civil lawyers pay attention to us.

Yet one shocking thing that criminal defense lawyers come to realize as we have occasion to stick our nose into the occasional civil case is that our practice eliminates the temptation to cheat our clients for profit.  Hard to imagine, I realize, but true. 

By charging a flat fee for services, there is no reason in the world to churn time. We don’t make an extra dime for wasting time, inflating hours, doing pointless research or writing memorandum no one will read.  If we choose to do so, it’s on our own dime, so who cares? 

I like to research, and often find myself going down unexpected paths for hours, reading interesting or peculiar decisions that ultimately lead to a dead end. While there’s an argument to be made that it inures to a client’s benefit, I never have to make that argument because no bill is generated. It’s all on my dime. Clients love when you do a ton of work for them that they don’t have to pay extra for. Who can blame them?

At the same time, the most common refrain I hear from targets of federal investigations or white collar prosecution is that they need a lawyer with “resources,” which is code for Biglaw with lots of lawyers who have lots of connections and lots of clout.  The belief is something of a delusion, where the client thinks that a big firm will have 50 lawyers working round the clock on their case doing very important work on their behalf. 

But then, the  New York Times reports that this may be somewhat accurate, though not likely in the way they want.

They were lawyers at the world’s largest law firm, trading casual e-mails about a client’s case. One made a sarcastic joke about how the bill was running way over budget. Another described a colleague’s approach to the assignment as “churn that bill, baby!”
This email comes from DLA Piper. Biglaw central, working for an energy industry executive, Adam Victor on a bankruptcy. 

“I hear we are already 200k over our estimate — that’s Team DLA Piper!” wrote Erich P. Eisenegger, a lawyer at the firm.

Another DLA Piper lawyer, Christopher Thomson, replied, noting that a third colleague, Vincent J. Roldan, had been enlisted to work on the matter.

“Now Vince has random people working full time on random research projects in standard ‘churn that bill, baby!’ mode,” Mr. Thomson wrote. “That bill shall know no limits.”

See what they’ve done here?  So you want resources? They’ve got resources up the ying-yang, baby. Very well paid resources. And all those resources need to bill to survive. Put a kid into a clean shirt with French cuffs and a monogram and, bam, you’ve got a high-priced lawyer.  And you’ll pay extra for the comfort this brings you:

Internal DLA Piper e-mails from the Project Orange bankruptcy appear to corroborate that criticism. Lawyers on the case openly discussed the inefficient use of junior lawyers, who are known as associates. Mr. Thomson, a DLA Piper lawyer, wrote that although the firm had reduced the amount of a bill for Mr. Victor, he expected his fees to escalate.

“DLA seems to love to lowball the bills and with the number of bodies being thrown at this thing it’s going to stay stupidly high and with the absurd litigation P.O.A. has been in for years it does have lots of wrinkles,” Mr. Thomson wrote.

Later, Mr. Thomson complained that DLA Piper associates were taking too long to complete assignments. “It took all of them four days to write those motions while I did cash collateral and talked to the client and learned the facts,” Mr. Thomson wrote. “Perhaps if we paid more money we’d have skilled associates.”

Being a solo or small firm practicing criminal defense, there is no reason for this to ever happen. First, because we don’t bill hourly, and therefore can’t churn. Second, because no one can afford the inefficient use of lawyers and maintain a viable practice.

It’s not that being a solo inherently makes a lawyer skilled. Then again, it’s not like being in a Biglaw firm makes a lawyer skilled either. But then, retaining a solo or small firm lawyer because of his skills and reputation means you get the guy you hired. Retaining a Biglaw firm means you have no clue who will be doing your work. You shake hands on the deal with a partner your respect, only to learn that the first million in billings are at the hands of associates you’ve never heard of, who take days to produce a piece of paper that an experienced lawyer could craft in a few hours.  And craft better than that kid will be able to do for the next ten years.

One of the jokes I regularly make in learning of a case that came out of a well-regarded, big name megafirm is that I could have lost that case for half the cost.  It’s not really a funny joke, but meant to make an ironic point.  Sure, they have all the resources” any client could want.  Do they really want that when the bill comes in and they finally figure out that they could have had better representation for a fraction of the cost? 

Hey, it’s Biglaw. How could you possibly go wrong?

2 comments on “No Time To Churn

  1. Erika

    Apparently they didn’t bother to teach their associates the important rule that you only bill for the jokes you tell each other about overbilling their clients in person and not put them in writing. i also like the fact that the one attorney claims that if they only paid their junior associates more they would get better lawyers who would be able to do the work faster

    never mind that if you paid more to get better attorneys who work faster they would have to find someway to meet the firm’s no doubt increased billing requirements which means that the junior associates would have to resort to padding their bill by billing for stuff like meeting in person to tell jokes about how they are over billing the client.

    To be perfectly honet, i’m surprised that the Biglaw system hsa lasted this long before major cracks appeared – especially after reading the book Shark Tank about Biglaw pioneers (in many ways including their bankruptcy and collaspe) Finley Kummel. Fortunately, i had a senior associate at the firm i worked at who liked me enough to tell me the truth about how Biglaw really operates so i could save myself before it was too late.

    And it looks like thse poor associates have learned one of the fundamental rules of Biglaw survival the hard way – never trust the firm about anything because if something goes wrong with a case they will throw you under the bus in a second. Those junior associates are no doubt going to wind up out in the streets being essentially unemployable due to this. The partners meanwhile are going to tell the next potential sucker (oopsie, i mean client) that “yes there was overbilling here in the past but it was a few bad associates who are gone now so everything will be all right. Trust us ;)”

  2. SHG

    It demonstrates the need for the same advice every rookie criminal is taught: never put it in writing. 

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