As Biglaw continues to drop buckets of cash on associates with holiday bonuses (i.e., sharing record revenue), one firm wants its associates to pay them!
North Dakota law firm Larson Latham Hettl has sued two of its former associates, alleging they were overpaid because they didn’t bill enough.
You read that right.
Back in March of 2020 (pandemic anyone?), the firm had its associates sign an employment agreement with the following language:
“𝘏𝘰𝘶𝘳𝘴 𝘉𝘪𝘭𝘭𝘦𝘥 𝘋𝘪𝘴𝘤𝘳𝘦𝘱𝘢𝘯𝘤𝘺. 𝘐𝘯 𝘵𝘩𝘦 𝘦𝘷𝘦𝘯𝘵 𝘵𝘩𝘢𝘵 𝘈𝘴𝘴𝘰𝘤𝘪𝘢𝘵𝘦 𝘣𝘪𝘭𝘭𝘴 𝘰𝘶𝘵 𝘭𝘦𝘴𝘴 𝘵𝘩𝘢𝘯 𝘵𝘩𝘦 𝘣𝘢𝘴𝘦 𝘲𝘶𝘰𝘵𝘢 𝘧𝘰𝘳 𝘢 𝘵𝘩𝘳𝘦𝘦 𝘮𝘰𝘯𝘵𝘩 [𝘴𝘪𝘤] 𝘱𝘦𝘳𝘪𝘰𝘥, 𝘵𝘩𝘦 𝘈𝘴𝘴𝘰𝘤𝘪𝘢𝘵𝘦’𝘴 𝘴𝘢𝘭𝘢𝘳𝘺 𝘸𝘪𝘭𝘭 𝘣𝘦 𝘳𝘦𝘥𝘶𝘤𝘦𝘥 𝘢𝘱𝘱𝘳𝘰𝘱𝘳𝘪𝘢𝘵𝘦𝘭𝘺 𝘢𝘵 𝘵𝘩𝘦 𝘥𝘪𝘴𝘤𝘳𝘦𝘵𝘪𝘰𝘯 𝘰𝘧 𝘓𝘓𝘏 𝘪𝘯 𝘰𝘳𝘥𝘦𝘳 𝘵𝘰 𝘮𝘢𝘬𝘦 𝘶𝘱 𝘧𝘰𝘳 𝘢𝘯𝘺 𝘥𝘪𝘴𝘤𝘳𝘦𝘱𝘢𝘯𝘤𝘺. 𝘈𝘯𝘺 𝘥𝘪𝘴𝘤𝘳𝘦𝘱𝘢𝘯𝘤𝘺 𝘸𝘩𝘦𝘳𝘦 𝘵𝘩𝘦 𝘢𝘤𝘵𝘶𝘢𝘭 𝘩𝘰𝘶𝘳𝘴 𝘣𝘪𝘭𝘭𝘦𝘥 𝘪𝘴 𝘭𝘦𝘴𝘴 𝘵𝘩𝘢𝘯 𝘵𝘩𝘦 𝘣𝘢𝘴𝘦 𝘩𝘰𝘶𝘳𝘴 𝘳𝘦𝘲𝘶𝘪𝘳𝘦𝘥 𝘸𝘪𝘭𝘭 𝘣𝘦 𝘤𝘰𝘯𝘴𝘪𝘥𝘦𝘳𝘦𝘥 𝘵𝘰 𝘣𝘦 𝘢 𝘥𝘦𝘣𝘵 𝘰𝘸𝘦𝘥 𝘣𝘺 𝘈𝘴𝘴𝘰𝘤𝘪𝘢𝘵𝘦 𝘵𝘰 𝘓𝘓𝘏 𝘢𝘵 𝘵𝘩𝘦 𝘦𝘯𝘥 𝘰𝘧 𝘵𝘩𝘦 𝘤𝘢𝘭𝘦𝘯𝘥𝘢𝘳 𝘺𝘦𝘢𝘳 𝘰𝘳 𝘢𝘵 𝘵𝘩𝘦 𝘵𝘦𝘳𝘮𝘪𝘯𝘢𝘵𝘪𝘰𝘯 𝘰𝘧 𝘦𝘮𝘱𝘭𝘰𝘺𝘮𝘦𝘯𝘵.”
When two former associates didn’t bill enough, the firm sent them bills for overpayment of salary. And when the attorneys didn’t pay, the firm sued them…and won! (both cases are on appeal, but that’s another story).
This is a “heads I win, tails you” lose business model for the law firm.
If the attorneys meet their billable quota, their salaries are covered, and the partners’ profit.
If the attorneys do not meet their quota, the associates must pay back a portion of their salary, and the firm is made whole.
When I say 𝗕𝗲 𝗨𝗻𝗰𝗼𝗺𝗺𝗼𝗻, this is 𝘯𝘰𝘵 what I’m referring to.