Law Firm Billable Hours in an Insurance Defense Firm

Question:

I am the managing partner of a 12 lawyer insurance defense firm in Oklahoma City. We have 4 partners and eight associates. While we have grown over the last five or six years by adding associates our profitability has remained flat. We feel that we are not getting the billable hours that we should out of our associates. What are other firms like ours getting out of their associates in terms of billable hours?

Response:

Most of my insurance defense firm clients expect a minimum of 1800+ annual billable hours from associates and partners. Often 1800 is a requirement to remain employed and the minimum threshold to be eligible for a performance bonus. Often I see billable hours at 2000 to 2200 in insurance defense firms.

This goal is getting harder to achieve. Insurance companies are now managing hours as well as rates and outlining their expectations in their billing requirements and guidelines. Law firms can no longer "lean on the pencil" like they used to do in the old days. In addition, if business and file assignments are down you can't expect associates to work on work that isn't there.

If you are not getting 1800 hours – the problem may not be associate work ethic – it may be that more time needs to be invested by the partners in focused business developed and bringing in more work.

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

Posted at 07:17 PM in Financial Management
Tags: an, Billable, Defense, Firm, Hours, in, Insurance, Law

Apr 26, 2016

Law Firm Billable Hours in an Insurance Defense Firm

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