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The emperor’s new clothes

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Remember analogy questions? The kind that were dropped from college entrance tests years ago, because the questions required incisive reasoning. Clever analysis must have been getting harder to find—let alone test—in American teenagers. So, to save embarrassment, they just disappeared one year. The analogy questions, I mean.

The test problems are gone, but nostalgia pokes my synapses to offer one final analogy question worth puzzling over:

Living the high life as the emperor <is to> donning the invisible new pantaloons and silk blouse
<as>
Laboring in the big shot law firm <is to> ___________?”

You got it: “Billing hours.”

Billed hours, like analogy questions and the emperor’s new clothes, have a storied history.

If memory serves, it was during the Middle Ages when lawyers got the idea to charge by the hour. Or was it the Mycenaean era? I can’t recall for sure. Let’s just say it was long ago. You can probably find the answer in volume two of the six-volume set, Tedious Anecdotes in the pre-Renaissance History of Law. Let me know if you need to borrow mine.

Never mind. I admit it. The notion of charging someone for the length of time spent is not that ancient.

Really, billing hours for law work only got popular after Dan Bricklin and Bob Frankston invented the spreadsheet. (Not too many people remember Dan and Bob, but it’s useful to have their names at hand. Every new idea needs to be fronted by the name of the person who invented it. The light bulb—Edison. The radio vacuum tube—deForest. Spread spectrum communication—Hedy Lamarr. Banner ads on search engines—Give me the name; I’d love to get my hands on that guy.)

Anyway, the brilliant scheme that Bricklin and Frankston invented promised to reinvigorate the practice of law. Sure, their spreadsheet contraption was complicated and mathematical. But you had to have it if you entertained any hope of tracking important financial stuff. Like whether the 9.2 hours of time that you spent at $25 an hour doing a lot of not-too-useful work on a brief had actually been cut in half when the bill went out. Or had instead been mistakenly billed and paid in full by an unknowing client.

Before spreadsheets, these law fee calculations were done on the backs of beer glass coasters using half-eaten pencils. The coasters often would get lost or tattered. So refunding the $115 overcharge wasn’t all that likely. Which may have seemed just as well to the eyeshade guys in the back room at Brent’s Brewhouse.

Getting back to billed hours, that invention predated the spreadsheet by a few years. Billed hours were the brainchild of a young office boy named Clipston Hunter, back in the 30s. Clip had been laboring at the high art of sorting paperclips on his desk in the back hall of Lake & Lake, a big white-shoe law firm in Chicago. Under his meticulous touch, the clips fell correctly into four bins: big, medium sized, small, and the new-fangled ones with the evenly spaced tiny notches that grab into the paper to hold it tight.

When the war broke out, extra money for paper clip experts grew scarce at Lake & Lake. Poor Clip would have been out pan handling on Rush Street, if he hadn’t convinced Darby Waterstone, the senior partner, to start charging Clip’s sorting work to clients at 50 cents an hour.

This foray into billed hours territory was a grand success. So, one day, Waterstone announced “From here on, we’ll be charging every lawyer’s time by the hour. Your hourly rate will be based on your shoe size.” Then, he ceremoniously unloaded a wad of chewing tobacco into the brass spittoon under his desk to punctuate his pronouncement and emphasize the importance of this moment in the history of the law.
After that, billed hours spread across the profession faster than hot cream cheese on a whole-wheat bagel. The formula did get more sophisticated. Height was added to shoe size as a factor. Then age. Then the number of letters in the name of your law school. In the face of all the added complexity, the spreadsheet fully proved its mettle.

It wasn’t all smooth sailing, though.

For one thing, you had to deliver the same amount of value for every hour that you wrote down. An hour cost the client $32.50, and it was supposed to buy $32.50 worth of legal service. So the hour from 8 to 9 on Monday June 10 would be charged at $32.50, same as the hour from 4 to 5 on Thursday October 3. And the values delivered for the two hours had to be the same. Or so it seemed.

This presented a challenge.

Suppose you were thinking hard and making fast progress on a knotty case law analysis starting at 8:00 AM one morning. You had to pay close attention when the work was going that well, to be sure to slow down and do some daydreaming starting around 8:23. Otherwise you’d be in trouble versus the next hour from 9 to 10 AM when nothing much was going on productivity-wise, because your kid sister called to chat, and you ducked down to the lunchroom for a corn meal muffin. Keeping the values delivered in all of the different hours of a day or a week equal took some tricky brain gymnastics.

Once you had that mastered, you had to figure out how to make your $32.50 hour worth exactly 0.789 as much as the $41.25 per hour charged by Bill in the office next door. That was an even bigger brainteaser.
I’m not saying Bill wasn’t a terrific lawyer. But he was slow. Real slow. And he was charging more per hour than you. So you had to be careful—on two scores—not to get ahead of him. There were always ways, of course. You could work the New York Times crossword. Or take a leisurely hike to Harry’s Hash House for fish and chips.

It wasn’t easy. But spreadsheet marketers, lawyers, and the emperor with his new duds got to feeling pretty content once the kinks got worked out of the system. And the money rolled in.

It was just about then that clients turned persnickety. Who could blame them? The bills looked too high. The protests grew. What did the different rates mean? Carol does better work than Joe; why is her hourly rate lower? Why did George’s rate go up when the quality of his work didn’t? Could the rates be blended? Like a marshmallow-lime frappe? Could you discount Jane’s rate by 8.46% and throw away her hours over 42 per week—for the first three months of the year; then switch to a contingent fee arrangement for the following fiscal quarter. Would a fixed fee deal be possible? Could you defer the fees? Send the bill electronically?

And hold the fries?

I doubt it

Written by thinker

July 23rd, 2014 at 7:26 pm

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Lawfirm hospitality gone awry

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IMG_5061It’s getting harder and harder to tell law firms from gourmet restaurants and upscale function halls.

But it wasn’t always that way.

Back in the day, you were lucky to find a pitcher of stale tap water (no ice) on the conference room table and a couple of semi-clean drinking glasses (the ones with the flutes on the side) to hand to the chief engineer of RCA or the factory foreman of United Shoe Machinery. If the meeting was important, you had the lunch counter at the Woolworth 5 and 10-cent store across the street send over some coffee and hot water for tea. Eight hours in a stuffy conference room, the senior partner smoking a cigar, and a lot of progress on that summary judgment brief. Lunch? Two hours at the city club, two Martinis, and back to work. That was the high life.

Times have changed. For the better.

Somewhere between 1980 and 1990, firm cultures took a turn to the genteel side. Face it. When it came to good taste and the warm-fuzzy, the old-time machismo had gotten in the way for decades. It was time for a revolution. So the passive aggressive approach to entertaining outsiders and insiders was dumped.

The shift came on subtly. It had to. Even small changes meant upheaval. The traditionalists were shocked when canned drinks, napkins, plates, and a tasteful small plate of cookies appeared quietly on the credenza (ginger snaps). Soon the old guard Woolworth lunch counter lost out to the upstart Au Bon Pain.

Funny, the old goats stopped grumbling and started eating. With a vengeance. Gluttony ruled.

Muffins appeared, then bigger cookies. Humongous cookies the size of a plate. Soon the fare included small lunches to lay on over the mid-morning snacks. Croissants filled with chicken salad glop (curried). Pita pockets with humus. Focaccia. Pizza. Then serious entrées. Desserts. Hor d’oevres. Feasts fit for kings.

Heavy, calorie-laden, fatty, high-energy food was everywhere. There was so much energy ingested that phlegmatic folks were bouncing down the halls and off the walls. Every so often a salad or piece of fruit would turn up somewhere. By mistake. “Please, let’s not let that happen again.”

The food spilled out of the conference rooms into the lunch rooms, the reception areas, the hallways, the individual offices. Every space, every occasion, every person was caught in the frenzy.

Space planners were called in. No self-respecting law firm could occupy an overpriced space that didn’t have a kitchen, a dining room, serving accoutrements in the conference rooms, discrete places to dump your trash that looked a lot like file drawers. Hospitality staff was hired. The big puzzle about a meeting was not who would be there or the topic at hand. No, it was: “What’s on the menu? And which hash house is catering?” Internal rump sessions and meetings with clients all were scheduled around the food service. The fare was chosen meticulously. Grazing was the sport of the day.

Excess food was given away. Thrown away. Spirited back to one’s office or carrel. Sneaked into the fridge as if it were your own. Left there to go stale. And smell.

Not content with the public offerings, people brought their own food to the office. Lunch rooms were fitted out with refrigerators, microwave ovens, toasters.

Zagat squeezed a new section into their restaurant listings: Great American Law Firms. And the American Lawyer pushed the 50 highest profit firms to the back page in favor of glamorous snapshots of the best food served in a law firm, properly primped by the best food makeup artists on Madison Avenue.

But I knew for sure that the focus on culinary delights had gone haywire when firms changed their marketing styles to suit:

“Meathead, Carrotfinger, and Lard. Corporate Law. And the Best Pulled Pork East of Beaumont.”

What’s next? Hot cloths at the reception desk? Turkish towels in the hot tub room? And Tai Chi lessons at 9 AM in the solarium?

Just my two cents.

Written by thinker

May 16th, 2014 at 8:54 am

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