Firm Pays Associates Less and Partners Equally, Requires Fewer Hours

Law Firms

Firm Pays Associates Less and Partners Equally, Requires Fewer Hours

Posted Jul 9, 2008, 06:52 am CDT
By Debra Cassens Weiss

California intellectual property firm Knobbe, Martens, Olson & Bear is looking to expand without changing its unusual business model.

All of the firm’s partners share equally in profits, the National Law Journal reports in an article reprinted in the New York Lawyer. Associates make below-market pay of $150,000, but the trade-off is better work-life balance. Lawyers at the firm are expected to bill only about 1,640 hours a year.

The 200-lawyer Knobbe Martens recently expanded beyond California with offices in Washington, D.C., and Seattle. Managing partner Steven Nataupsky told the National Law Journal that the firm may open future offices in Boston and Chicago, as well as in foreign locations. Rather than relying on lateral hires to staff new offices, the firm will transfer existing lawyers to the locations.

"Typically, partners who grow up in other firms have very different cultures than us. They don't tend to fit in well here," Nataupsky told the publication. "A lot of it has to do with compensation. They're used to a formula system where they eat what they kill, and we don't have that."

William Zimmerman, managing partner of the firm’s Washington office, says the compensation system results in work going to the lawyer best equipped to handle it, rather than to the lawyer who brings in a client.

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Posted by associate - 1 month, 4 weeks, 1 day, 5 hours, 34 minutes ago

1640???? I’m in.
Posted by associate - 1 month, 4 weeks, 1 day, 5 hours, 27 minutes ago

1640? wow. How awesome would that be?
Posted by associate - 1 month, 4 weeks, 23 hours, 50 minutes ago

I wish more firms thought about changing their business models to adjust with this economy and the growing burnout among associates. It needn’t be at such generous levels as this law firm obviously, but some cutting back would benefit parties sitting on both sides of the table.
Posted by Partner - 1 month, 3 weeks, 6 days, 7 hours, 47 minutes ago

I am a partner of 30 years, and have worked under both systems. This one is by far and away the best. In eat what you kill, attorneys take on work that they are not competent to handle. Some attorneys have too much work, and others have none, yet there is not incentive to balance the workload out.
Posted by Buffalo JDPhD - 1 month, 3 weeks, 6 days, 7 hours, 33 minutes ago

Buffalo law firms don’t have a billable requirement much higher than that.
Posted by IP Guy - 1 month, 3 weeks, 6 days, 7 hours, 25 minutes ago

1640 is not billable hours; it is billed hours. Nonetheless, Knobbe seems a great firm to work for.
Posted by ET Associate - 1 month, 3 weeks, 6 days, 7 hours, 24 minutes ago

I’m an associate at a small/mid-sized firm where the billing “target” is 1650 hours per year. As a first year associate I am paid less than if I was at a big law firm, but significantly more than if I was at a small firm.

Partners here “eat what they kill” and I think it makes perfect sense. If you’re a partner in a business and you don’t generate business you should not be compensated as highly as those partners who do generate the business for themselves and the associates. If you just want to handle the work that someone else places on your desk you have no business being a partner and you should remain an associate.
Posted by TP - 1 month, 3 weeks, 6 days, 6 hours, 49 minutes ago

There is a happy medium between “eat what you kill” and this pure socialism that undoubtedly discourages anyone from developing their own business. Hard to believe the model would work long term. That said, sitting in your office only 7 hours a day doing work that others brought in sounds like a pretty good gig.
Posted by pheebee - 1 month, 3 weeks, 6 days, 6 hours, 23 minutes ago

Where do I sign up?
Posted by KD - 1 month, 3 weeks, 6 days, 6 hours, 15 minutes ago

Developing business for the firm versus doing and managing the legal work that others brought into the firm are both forms of real work. Many who are excellent and driven at one of these are not so excellent or driven as to the other. Some dislike legal work, and prefer to develop business. Others prefer the legal work. Also, the notion that partners develop the business, and associates do the work, doesn’t fit well at all with today’s complex legal systems and the expertise in law required to correctly do today’s legal work which takes years and years to develop in any given niche.

Partners who slack off can be terminated. But if one partner is doing and managing the legal work, while another is bringing in business, and they are both working equally hard, they should be paid roughly the same. Today’s imbalance among partner pay on the notion that business development is more worthy than doing and managing the incoming legal work, and thus keeping the clients the firm has brought in paying you lots of money, is exactly what has led to so many retention issues among partner, and ultimately associate, ranks. The hidden cost of retention issues is very high to both the firm and the client.
Posted by FormerKMOB'er - 1 month, 3 weeks, 6 days, 6 hours, 15 minutes ago

Don’t kid yourselves. I was part of this firm and I worked every bit as many hours there as I do now at my new firm (with an 1800 hour billable requirement) - I was just paid less. You see, Knobbe has a “billed” system. Because the partners don’t eat what they kill, many partners don’t feel the pressure to bill as much associate time as they should. This is a bad combination for associates and turn-over at Knobbe has been high in recent years.
Posted by associate - 1 month, 3 weeks, 6 days, 5 hours, 19 minutes ago

All of you guys talking “billed” v. “billable” need a refresher course on what the big firms require.

My choices right now are 1800 BILLED and with another firm, 2000 BILLED. 1640 BILLED is a 4 day week year round for me (I say that but I usually work Sundays too anyway and don’t count those in my 5 day week.)
Posted by J edwards - 1 month, 3 weeks, 6 days, 5 hours, 5 minutes ago

let’s see, if I billed 1640, I’d make $205,000. I can’t see working myself to death, though, so I intend to take a vacation if I approach 900. (self-employed)
Posted by Kahuna - 1 month, 3 weeks, 6 days, 4 hours, 53 minutes ago

In most firms, there are rainmakers who have a great talent for salesmanship but cannot actually do the work they reel in. These salesmen need partners who can generate excellent and timely work product, which is what keeps the client happy and develops the client relationship after the initial “reeling in.” Both types are required in any firm. A firm of all rainmaker partners is unsustainable, as is a firm of all working attorneys who are not skilled in showmanship. Yet, most people tend to place all of the value on the salesman type and very little on the attorneys who actually keep the clients happy and coming back for more work. This is a symbiotic relationship and both types of partner should be treated equally.
Posted by justanotherone - 1 month, 3 weeks, 6 days, 4 hours, 27 minutes ago

For other professions, e.g. 40 hr wk, there are 2080 hours of total work in a year. TOTAL work. To get 1640 Billed as a 1st year associate, most work around 3200 hours. However, after 32 hours worked in a week, total work time, the efficiency of an individual statistically decreases by 80%. Seems to me that under ANY system requiring more than 2080 Total hours, effiency would be a huge problem, let alone burnout and health problems associated with that amount of stress. I think firms should really rethink this.
Posted by il - 1 month, 3 weeks, 6 days, 4 hours ago

To #15: The 2080 hrs of total work annually include at least 2 wks of paid vacation, 10 days of holidays, 1 wk of sick leave/personal time. So people with a 40-hr work week are actually expected to work no more than 1880 hrs annualy, while being paid for 2080.
Posted by SistahInLaw - 1 month, 3 weeks, 6 days, 2 hours, 53 minutes ago

Sending my resume TODAY! I’m working the same number of hours for 1/3 of the pay.
Posted by Pete Wanger - 1 month, 3 weeks, 6 days, 2 hours, 5 minutes ago

Firms like this know that the associates who want to succeed will use the extra time they have for rainmaking and continuing education in their fields. More time to write and more time to develop. This is very good. The ones who use the extra time not working to play will not succeed. Or at least we hope things work out that way.
Posted by low expectations - 1 month, 3 weeks, 5 days, 5 hours, 36 minutes ago

To #5: ouch, only 50% efficiency from the 1st years? For IP, this seems pretty low. As a first year, I hit 80%.

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