Asked and Answered

By John W. Olmstead, MBA, Ph.D, CMC

Q. Our firm is a six-attorney estate planning/probate firm in Mesa, Arizona. There are three partners and three associates in the firm. We have had associates for the last eight years and have never made money from them. Last year we decided to implement a billable hour expectation of 1,800 hours for the associates. A year later, no one is even close. Only one associate has reached 1,500 hours. Is our expectation reasonable? Your insight is appreciated.

A. The national norms for all practices is in the 1,700 range for associates. Litigation firms range from 1,800-2,000 hours and up, with most firms having a 1,800 or 2,000 minimum billable hour requirement.

I believe that 1,800 billable hours is high for a small estate planning/probate firm if the attorneys are only expected to work forty hours a week and the firm does not charge for initial consultations or intake interviews. Many of the estate planning/probate law firms that I am working with are struggling to get to 1,500 billable hours — many associates and partners alike are under 1,400 hours. I believe that an estate planning/probate practice should be able to expect 1,600 billable hours.

I think that a 40-hour work week expectation for attorneys is part of the problem. Most professionals service providers (attorneys, CPAs, management consultants, etc.) work more like 50 hours. It is hard to be a successful professional with a 40-hour a week attitude. In addition to billable hours non-billable time has to be spent on client development, continuing professional education (CLE for attorneys), and firm administration.

Click here for our financial management topic blog

Click here for our law firm profit improvement blog

Click here for articles on other topics

John W. Olmstead, MBA, Ph.D, CMC, (www.olmsteadassoc.com) is a past chair and member of the ISBA Standing Committee on Law Office Management and Economics and author of The Lawyers Guide to Succession Planning published by the ABA. For more information on law office management please direct questions to the ISBA listserver, which John and other committee members review, or view archived copies of The Bottom Line Newsletters. Contact John at jolmstead@olmsteadassoc.com.