In a world where time equates to billable hours, law firms are taking stringent action to ensure prompt and regular time entry submissions by their associates. Hinging their revenue on the daily timesheets, any delinquency adversely affects the collection of fees from clients. Firms have been combating such procrastination by introducing policies that potentially decrease end-of-the-year bonuses.
The trend, which was first observed among Biglaw firms in 2008, was soon adopted by others. Overdue time entries started impacting not only bonuses but also employee salaries. One such case pertains to Sidley Austin, the sixth largest revenue earner among the Am Law 100 firms in 2022.
Recognized for its strict daily time entry policy, Sidley Austin recently circulated a memo intimating their staff about further tightening of controls, wherein, bonus payment would be contingent upon time entry. In the extreme scenario of non-compliance, attorneys at the firm could witness a drastic 50% cut in their bonuses.
Though the move might seem strict, especially towards overworked associates who often lag behind submitting timesheets, slicing bonuses is deemed to be an effective way to capture their attention and ensure diligent time entries. Notably, with Sidley Austin’s 2022 total revenue clocking in at $2,922,634,000, it is crucial for the firm to maintain robust internal control systems, particularly concerning billable hours.
More information about this new policy can be found in the memo, available here.