New Findings on Associate Hours Worked and Law Firm Leverage

NALP Bulletin, May 2014

Hours Worked

The most recent information available on hours worked and billed by associates suggests that, while hours worked have remained relatively steady for the two most recent years that have been reported (2011 and 2012), the picture for billable hours worked is more mixed. Overall, average hours worked were 2,076 per year in 2012, compared with 2,075 per year at these same offices in 2011. Overall averages for billable hours per year were 1,801 and 1,794, respectively. The largest firms saw average hours worked remain essentially flat at 2,213 to 2,215 per year; however billable hours worked increased from 1,836 hours to 1,864 hours per year.

Over a longer period of time encompassing the recessionary period, average hours worked and billed were lower in 2009 than in 2007 regardless of firm size, but recovery to pre-recession (2007) levels in terms of billables has been confined to the largest firms. (Note that, unlike the comparisons between 2011 and 2012, which reflect reporting by the same firms, figures for 2007 and 2009 were compiled independently from reports at that time, so the comparisons between those two years — and also between those two years and 2011 and 2012 — are between the groups as a whole, rather than between the same firms.)

Table 1 and Table 2 also show the distribution of figures reported for 2012 in addition to the average of all figures reported (which in turn are averages). As these tables make evident, these distributions vary considerably by firm size in a manner that would be expected. For example, half of offices in firms of 701+ lawyers reported that average hours worked in 2012 were 2,200 or more hours, compared with just 8% of offices in firms of 100 or fewer lawyers doing so.

Finally, the most recent reporting of billable hours requirements in the 2013-2014 Directory of Legal Employers reveals an average requirement of 1,884 hours per year overall, and an average requirement of 1,918 hours per year at firms of more than 700 attorneys (Table 3). These averages have not changed much since they were last compiled from the 2011 Directory. As has been the case since NALP began compiling these figures, a requirement of 2,000 hours per year is not typical. And although it is not possible to track changes at individual firms and offices, a requirement of 2,000 hours has accounted for just 9-12% of reported requirements since 2004. Among firms of more than 700 attorneys, almost 19% reported a 2,000 hour requirement, compared with about 16% in the prior year. The average requirement in this group of firms remains lower than the 1,938 hour average in 2008, when 35% of these offices required 2,000 billable hours per year. But, overall, the distribution has moved "to the right." For example, in 1998, the most commonly reported figure was 1,800 hours, reported by about 30% of offices. Today, only 19% of offices report an 1,800-hour requirement.

Law Firm Leverage in 2013

With recent reporting of counts of equity and non-equity partners in many of the firms with partnership tiers, it is possible to compare associate counts with both total partners and with equity partners in those firms. Table 4 shows that partners are most highly leveraged in large firms whether measured by total partners or equity partners.

Comparable figures for prior years are not available. However, a more general measure of leverage, the ratio of associates to partners based on all listings in the Directory (not just those with partnership tiers) has been compiled and reported, most recently in a 2007 press release. At that time, firms reported just about one associate for every partner; the figure was lower in smaller firms and considerably exceeded the one-to-one ratio in larger firms, at 1.26 in firms of 501-700 lawyers, and 1.39 in firms of 701+ lawyers. (That is, in firms of 501-700 lawyers there were 1.26 associates for every partner; in the largest firms there were 1.39 associates for every partner.) By 2013 the comparable overall figure had dropped to 0.92, as might have been expected because of the many associate layoffs that occurred as a result of the recession. However, the decrease was most pronounced in firms of 501-700 lawyers, down to 0.92 from 1.26, but relatively small in the largest firms, where the figure was down to 1.32 from 1.39.


Table 1. Average Total Hours Worked in 2011 and 2012 With Comparisons to 2007 and 2009

   Percent of Offices Reporting in This Range for 2012 # of Offices Reporting Average in 2012 Average in 2011 Average in 2009 Average in 2007
1,000-1,999 Hours 2,000-2,099 Hours 2,100-2,199 Hours 2,200 or More Hours
Overall 29.1% 16.8% 24.1% 30.1% 399 2,076 2,075 2,025 2,068
By Size of Firm (# of lawyers):
    100 or fewer 58.3 20.2 13.1 8.3 84 1,948 1,962 NC NC
    101-250 28.9 25.6 25.6 20.0 90 2,032 2,011 1,971 2,023
    251-500 34.4 17.7 9.4 38.5 96 2,079 2,096 2,094 2,112
    501-700 14.0 18.6 32.6 34.9 43 2,139 2,101 2,033 2,119
    701+ 2.3 2.3 45.3 50.0 86 2,213 2,215 2,134 2,172

The figure shown for number of offices reporting is the number reporting a figure for 2012. The number that also reported a figure for 2011 differs slightly. The source for the 2011 and 2012 figures is the 2013-2014 NALP Directory of Legal Employers. Comparison figures for 2007 and 2009 were compiled from the 2008-2009 and 2010-2011 Directories, respectively, and were originally reported in the April 2009 and February 2012 NALP Bulletins.


Table 2. Average Billable Hours Worked in 2011 and 2012 With Comparisons to 2007 and 2009

   Percent of Offices Reporting in This Range for 2012 # of Offices Reporting Average in 2012 Average in 2011 Average in 2009 Average in 2007
1,750 or Fewer Hours 1,751-1,800 Hours 1,801-1,900 Hours More than 1,900 Hours
Overall 32.0% 16.3% 30.1% 21.6% 435 1,801 1,794 1,772 1,838
By Size of Firm (# of lawyers):
    100 or fewer 42.4 13.0 25.0 19.6 92 1,791 1,798 NC NC
    101-250 36.6 17.2 30.1 16.1 93 1,767 1,746 1,766 1,831
    251-500 36.7 7.5 35.8 20.0 120 1,788 1,810 1,804 1,858
    501-700 23.9 28.3 37.0 10.9 46 1,803 1,782 1,783 1,826
    701+ 13.1 25.0 23.8 38.1 84 1,864 1,836 1,753 1,847

The figure shown for number of offices reporting is the number reporting a figure for 2012. The number that also reported a figure for 2011 differs slightly. The source for the 2011 and 2012 figures is the 2013-2014 NALP Directory of Legal Employers.


Table 3. Billable Hours Requirements per Year by Firm Size

   Percent of Offices Reporting in This Range Average Required # of Offices Reporting
1,800 Hours 1,850 Hours 1,900 Hours 1,950 Hours 2,000 Hours
Overall 18.8% 16.8% 27.8% 17.3% 11.8% 1,884 816
By Size of Firm (# of lawyers):
    100 or fewer 35.1 20.7 10.8 4.5 4.5 1,809 111
    101-250 27.2 18.4 24.7 8.2 7.0 1,861 158
    251-500 27.1 6.4 29.8 19.1 12.8 1,891 188
    501-700 5.1 23.9 36.4 20.5 12.5 1,906 176
    701+ 6.0 16.9 30.6 27.9 18.6 1,918 183

Note: Percentages do not add to 100 because not all billable requirement figures reported are shown. Those shown are the five most commonly reported and account for 93% of all figures reported.
Source: 2013-2014 NALP Directory of Legal Employers.


Table 4. Law Firm Leverage in 2013

   Ratio of Associates to Partners Ratio of Associates to Equity Partners
Overall 0.66% 1.10%
By firm size (# of lawyers):
    100 or fewer 0.55 0.81
    101-250 0.49 0.74
    251-500 0.65 1.12
    501-700 0.71 1.22
    701+ 0.92 1.73

Note: Figures are based on firms that reported having two (or more) partnership levels and that also reported on the number of equity and non-equity partners. These firms collectively reported 22,855 partners of whom 13,760 — or about 60% — were reported as equity partners. See “The Representation of Women and Minorities Among Equity Partners Sees Slow Growth, Broad Disparities Remain” from the April 2014 NALP Bulletin for more details on the demographics of equity and non-equity partners in these firms.
Source: 2013-2014 NALP Directory of Legal Employers.

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