Business Development Skills and the Billable Hour

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By David Cruickshank | Oct 27, 2016

3-cruickshankI recently reviewed a small firm’s Associate Guidebook. In describing the firm’s expectations of associates, two-thirds of the text was taken up with how to attain annual billable hours (2000). The remaining one-third addressed billing and timekeeping. Not a word was said about business development or career.

This got me pondering this question: What if small firms paid as much attention to business-development skills as they do to billable hours?

I speak of small firms because many of them have leverage of less than 1:1; indeed one partner to .5 of an associate is not unusual. If they continue to make partners at the historical pace, those partners (whether non-equity or equity) will all have to contribute to revenue. This message is, regrettably, delivered too late to most associates. “Late,” in my mind, would be any later than three years of practice. Just as we have seen in BigLaw, there will not be much room for “service partners,” or long learning curves.

Applying the techniques and effort of managing billable hours of associates to the management of their business-development skills would lead to some of these practices:

  • In first-year orientation sessions, associates learn about how the firm makes profits and how every lawyer contributes to those profits.
  • Concrete stories and examples are given in first year about how young lawyers brought in business.
  • There is a monthly report to management on business-development training time and hours.
  • As associates make more business-development efforts (e.g., by speaking and publishing), the firm sponsors discussions of what is a “productive” hour vs. one that might be written off.
  • Annual evaluations have a business-development category that receives as much attention as the annual billable target.
  • A bonus (perhaps a trip to a significant trade conference) is awarded to associates with strong contributions over the year.
  • By fourth year, each practice group leader sits down with those associates to discuss their path to partnership and the business-development plan to get there. This plan is reviewed twice a year. Hours are reviewed monthly.
  • Associates who demonstrate few skills or productive hours are given a warning about their future at the firm by the end of fifth year.
  • Partnership entry criteria include both originations by the associate and the potential of that associate (via scrutiny of their measurable efforts).
  • Associates who are struggling get mentoring or external coaching (or both) on business-development skills.
  • Just as the firm raises the associate’s billing rate, it moderates their billing targets but increases the business-development target.
  • Stern memos go out from the managing partner when business-development hours are low.
  • And perhaps this is fantasyland, but firm management and partner meetings spend as much agenda time on business development as they do to the monthly billed hours report.

For law firm leaders, this application of old tools to new skills can easily be imagined. If your partner-heavy firm is to thrive, leaders may have to make these a reality.