Bloomberg Law recently reported that the venerable firm Steptoe would allow associates to choose their own billable hour targets. The program will start next year. An associate can choose to bill 2200 hours and receive top pay, or they can opt for 2000 hours and make less, or 1800 hours and make even less. Associates reportedly elect to move to a different tier. Associates are allowed to bill fewer than 1800 hours and have their pay pro-rated accordingly.

The move is designed to offer associates more lifestyle choices, which seems to be desired.

Kate Cappaert, chair of Steptoe’s professional development committee, has been quoted as saying, “We heard a lot of different things from associates about what they’re looking for at different points in their careers. We are recognizing that each associate’s experience is different and providing each associate flexibility in a structured format to allow them to take more control of their career path.”

The approach has been called very progressive by one consultant.

The Law of Unintended Consequences

The idea to provide associates with what would appear to be firm sanctioned lifestyle options is laudatory on its face.

I wonder how well this will work in practice and whether it will exacerbate other problems stemming from the billable hour system

But I wonder how well this will work in practice and whether it will exacerbate other problems stemming from the billable hour system. One issue is the expectations and demands of partners and the work. Partners will worry that a lower tier associate will just say, “Oops, I’m on a lower billable hour track and get to go home” when a case blows up (which they always do). Partners will naturally flock to those associates willing to meet the higher thresholds. 

The sad truth is that in the partners’ eyes, these associates will be more reliable and motivated. Partners will naturally assume being motivated equates to better work. Partners will inevitably hold associates opting for the higher tiers in greater esteem. Clients may also demand that associates willing to put in the time be the ones staffing their teams.

If partners funnel more work to associates in the higher tiers, it will further reduce the profitability of lower tier associates who may find themselves with less and less work and make less and less money.

What will this approach do to the firm collegiality? I fear associates in higher tiers will, like partners, look down on those in the lower tiers, creating an us versus them mentality.

A Better Approach

Perhaps a better approach is not to create class distinctions but to set a reasonable billable hour goal for all associates. Let’s face it: even 1800 billable hours a year isn’t easy. 2000 is harder. 2200 is really a stretch. That is over 6 hours every single day of the year, including weekends and holidays. It’s hard to see how demanding that many hours can be reasonable to associates and fair to clients. Yes, there are times that many hours in a year need to be extended. But really, how often and for how many years? Demanding that kind of performance opens the door to padding. It opens the door to spending more time than necessary to complete tasks, especially today with GenAI tools.

The Steptoe approach is just another disguised way to put lipstick on a pig

And there’s a whole other issue when it comes to AI. Associates should be rewarded for figuring out how to do more in less time using today’s (and tomorrow’s) tools. Yet under the Steptoe approach, the most innovative associates would be penalized. That’s already true in most firms, but recognizing a caste system would provide even fewer incentives than there already are.A better—and hopefully more forward looking–approach would be to encourage innovation and efficiency. The approach does little more than exacerbate the problems with the billable hour model when firms need to be looking at ways to move away

The Steptoe approach is just another disguised way to put lipstick on a pig. Law firms need to take a hard look at their demands and expectations of associates. Instead of demanding and then rewarding unrealistic billable hours, firms should set reasonable expectations and encourage innovation. But as long as the billable hour forms the basis of your business model, that’s not likely to happen.