Originally published on November 16, 2009 in our free BigLaw newsletter.
"Make the client happy" has long been a law firm battle cry. Traditionally, that meant 24/7 availability, lavish steak dinners, and box seats at sports games. Grueling hours and expense accounts remain part of the happiness recipe, but today reduced legal bills are the surest route to a client's heart. However, we live in a zero sum world. Some associates learn that so-called cost-cutting initiatives come at their own expense — literally.
Going Somewhere? Didn't Think So.
In January 2009, Christine, a third year private equity associate at a large firm, booked a two week vacation for August with her husband. When a partner in her practice group staffed her on a fast-track deal in August, she sent an email reminding him of her upcoming absence. The partner advised against going.
"The official reason, stated in the email, was that this was an important client and it was an all-hands-on-deck situation," says Christine. "The undertone was that I should be grateful to have my job at all in light of the layoffs everywhere."
Up to this point, Christine's story sounds fairly typical — associate cancels trip because of work. But when Christine submitted her credit card statement for the cancelled hotel and flight for client reimbursement, the partner refused to sign it.
"He said that he never officially okayed the trip in the first place, which meant that the client did not have to reimburse me under firm policy. But it was just an excuse to get me to eat $6,700 and spare the client. This partner never okays trips because he never wants the client to be on the hook for cancellations," she laments.
You Are What You Eat
Keith, a first year litigation associate at another large firm, shares a less dramatic but no less troubling example of a refusal to reimburse.
Keith ordered a small lunch spread for a client getting deposed at noon. The deposition got cancelled through no fault of the client's, and, as usual, Keith charged the food to the client. When Keith submitted the bill for approval, the supervising partner circled the charge and wrote "personal." The firm's billing system prohibits associates from charging food services to the general office account, so Keith had two choices: ask the partner to fork over his personal charge number or pay out of pocket. We know how this story ends.
Robbing Peter to Pay Paul
Large firm associates already "pay" for their jobs in so many ways — slavish hours, an unpredictable schedule, and a constant fear of unemployment. But as Christine and Keith can attest, when associates incur legitimate work-related expenses, they rightfully expect the client or the firm to make them whole. They do not expect to pay out of pocket.
Saving the client money is a worthy goal, but shifting the burden of reimbursement to associates creates illusory savings. Firms that require associates to pay out of pocket for work-related late night cabs, food spreads, and cancelled vacations save face with clients but abuse their bargaining power with associates and destroy firm morale.
Firms that do not seek expense reimbursement from clients should allow associates to charge appropriate expenses from the general office account or clearly communicate to associates the firm's reimbursement policy in advance. Cutting client costs by shunting them to associates is not a fair solution.
How to Receive BigLaw
Many large firms have good reputations for their work and bad reputations as places to work. Why? Published first via email newsletter and later here on our blog, BigLaw goes deep undercover inside some of the country's biggest law firms. But we don't just dish up the dirt. We also mine it for best and worst practices and other nuggets of knowledge. The BigLaw newsletter is free so don't miss the next issue. Please subscribe now.
