What Law Firms Don’t Measure: The “Other Ledger” Behind the Billable Hour

0:00 Introduction: What Law Firms Don’t Measure

1:17 Welcoming Jeff Cox to the Show

3:45 What Law Firms Really Teach Lawyers to Value

7:28 The Billable Hour as a Moral System

9:16 Does the Billable Hour Reward Time Over Judgment

11:21 What Happens to Unbillable Work Like Mentoring

12:51 How the Partnership Model Shapes Long-Term Incentives

14:28 The Other Ledger: The Hidden Personal Cost of Billing

18:38 Keeping a Second Ledger and What Leaders Can Change

21:40 Origination Credit and Who Gets the Credit

22:41 What Origination Credit Teaches Lawyers to Value

25:45 Private Equity, Origination, and Who Firms Protect in a Sale

30:21 The Physical and Psychological Cost of Legal Work

35:17 The Partnership Track and the Myth of Autonomy

41:29 Are You Building the Career You Actually Want

43:30 Jeff’s Own Path Away From Traditional Practice

46:34 How to Start Making a Change Without Blowing Up Your Career

48:49 Closing Thoughts and Where to Find Jeff Cox

Jason Marsh (00:00)
On today's show, Jeff Cox, attorney and author of The Emersonian Lawyer, a Substack series and forthcoming book applying Emerson's philosophy to the pressures and possibilities of legal careers. We'll be talking about how the billable hour and origination credit shape what law firms measure and reward, what lawyers learn to prioritize, and what gets left out of the accounting, from mentoring and good judgment to the personal costs lawyers pay along the way.

Jeff Cox (00:28)
no measurement system stays neutral.

you run one like the billable hour for 70 plus years and it stops describing the work and it starts to define it. And that time spent becomes a unit of worth rather than the value that's behind it. And so whatever can't be charged the hour, mentoring thinking about something on a walk, the judgment that shows up too fast that you can't meter it or bill for it, it stops to count.

Jason Marsh (00:50)
Welcome to the Alpha Lawyer podcast, a show dedicated to exploring what makes law firms thrive. I'm your host, Jason Marsh. Join me as I interview some of the smartest thought leaders and accomplished law firm owners in our space. Together, we'll dive deep into law firm operations, marketing, technology, finance, and everything else you need to build an incredible firm that allows you to live your best life.

Jason Marsh (01:17)
Hello, welcome back to the Alpha Lawyer Podcast. I'm your host, Jason Marsh, and joining me today on the show is Jeff Cox. What's up, Jeff? Great to have you.

Jeff Cox (01:27)
Hey Jason, great to be here.

Jason Marsh (01:28)
So today we're going be talking about the incentive structure that exists within the legal profession and how the ways that law firms measure and reward lawyers end up shaping a lot more than just their compensation. Because what firms measure, what they reward, what they promote sends a clear message about what's important to them and then what lawyers throughout their career should be optimizing for. Over time, those incentives shape how lawyers work, what they sacrifice.

what kind careers they build and even what kind of lives they end up creating around the profession itself. and Jeff, you've been exploring these ideas through your essay series, The Emerson Lawyer on Substack, where you look at the billable hour, how origination credit works, partnerships, professional identity, and I think importantly the hidden personal cost around those things and how they don't show

Jeff Cox (02:18)
Mm-hmm.

Jason Marsh (02:18)
up on a form on a firm's invoice or formal accounting.

So today I want to talk to you about what law firms reward, how that shapes their behavior and career choices, what gets sacrificed along the way, and whether the version of success they're actually chasing is actually the one they want. But before we get too deep into all that, let me introduce you, Jeff, to the audience. Again, I'm here with Jeff Cox. Jeff is a lawyer, he's the director of brand at Steno.

And he's the author of the Emerson Lawyer, a weekly essay series on substack looking at the pressures, incentives, and trade-offs that shape legal careers. his career has taken him across in-house legal, big law, legal operations, legal tech, including roles at Citigroup and Oric. So he's had a pretty front row view into how different parts of the legal profession operate and what they tend to reward.

so Jeff has seen the profession from a lot of different angles, and what I like is that he's willing to question some of the assumptions lawyers tend to simply ex accept as that's just the way things are. So, Jeff, one of the ideas running through your essays is that law firms are constantly teaching lawyers what matters, whether they realize it or not. So it's the things that get measured, rewarded, compensated, promoted. All of this is data and it's telling attorneys pretty clearly what the firm actually values.

So what do you think law firms are really teaching lawyers to value through those things that they choose to measure and reward?

Jeff Cox (03:45)
Yeah, and thanks through the intro. I I think one of the key things to think about as a law firm is that your compensation structure is really your most important strategy document. How you choose to reward people in terms of paying them, that's the thing that matters most. When you think about if a junior lawyer, joined your firm, they'd pretty quickly see, the behavior that matters most is how do you pay someone at the end of the day? And

That's what they're looking for. and I think the smartest lawyers, especially if you're inside of a firm, you want to maximize your ability to earn. You've gone through law school, you've taken the bar, you found your way to a firm and you're trying to maximize what you can at that firm. And I think that's typically what you look for.

Jason Marsh (04:26)
And so when the biggest rewards are tied to those billable hours, and origination, which we'll talk about a bit later, what kind of behavior does that naturally create?

Jeff Cox (04:35)
Yeah, I I think

The billable hour itself, like I I call it a moral system. it's really not it's a way to measure what matters. I think more than anything the the billable hour is used to tell you what actually matters at a law firm in terms of your time. And it's about billing to a client. And what happens though, some of the behaviors that are lost along the way are things that aren't counted. I think like, the Emerson lawyer series that we're talking about today is

Focused on the account. What's actually considered on the invoice and what's not. Whenever you choose not to allow people to bill towards or put something towards the billable hours for something like mentorship, creativity, taking time to be proactive with clients, then it typically gets left by the wayside. I think the thing that hits most for me, especially as someone midway through their career, is that probably one of the most valuable

hours that a senior attorney can commit at a firm is teaching a junior lawyer side by side how to do something. But it's also likely the least billable hour that they're gonna have. it's the most important thing to think about for succession, for teaching your talent, for keeping people at the firm, but you're not gonna let someone bill for it. You can't bill a client typically for your mentorship time. And so it teaches you the behaviors of like you're just not gonna do it or it's gonna be done on the sides. And the it's

It's an unfortunate

Jason Marsh (05:55)
Yeah, so

Jeff Cox (05:56)
reality.

Jason Marsh (05:57)
yeah, that I mean I was it's funny because I think several of the last couple of podcasts I have done have been around

young attorney mentoring and communication and to just teaching them essentially, how to become the lawyers that that they want. And obviously it's the young lawyer's responsibility to do some of that work, but certainly the more senior attorneys need to spend the time making it clear about those things. But in terms of what you're talking about, in those things, can firms end up pushing good lawyers to start optimizing for things that actually make them worse at work?

Jeff Cox (06:28)
It feels like a loaded question, but the answer is probably yes. I think at the end of the day, you think about, what a firms typically reward. We're gonna get into origination credit later on, but it's probably really important to talk about now on some level. the sure.

Jason Marsh (06:43)
well the first the next thing I want to go deep on, and by the way, it's

it's all loaded questions from here on out. All right, Jeff. So

Jeff Cox (06:48)
Ha ha.

Jason Marsh (06:49)
but but we're gonna get I wanna talk more about the billable hour. So

let's just jump into that, right? Because in your in your essays you talk about how the billable hour was created to solve a real problem, right? It gave firms a way to measure production, it gave clients a more rational way to understand what they were paying for.

But your argument is that once an entire profession organizes itself around one metric for long enough, that metric isn't just measuring the work, it's actually shaping the work and then eventually the people doing it. So you've called the billable hour a moral system. What do you mean and how has measuring legal work by the hour changed what lawyers and firms come to value?

Jeff Cox (07:28)
Yeah, I want to start by defending it.

I think the billable hour was not invented to make lawyers miserable, so I'm not someone here to say I'm looking forward to the death of billable hour. this is not that kind of a conversation. And before the billable hour existed, legal fees were pretty close to arbitrary and impossible to audit. And I think the billable hour itself made law firm economics legible. it gave clients something they could check, and it's still doing that today. But I think the core argument that I'm trying to make is that no measurement system stays neutral.

you run one like the billable hour for 70 plus years and it stops describing the work and it starts to define it. And that time spent becomes a unit of worth rather than the value that's behind it. And so whatever can't be charged the hour, mentoring thinking about something on a walk, the judgment that shows up too fast that you can't meter it or bill for it, it stops to count.

and that's what I mean by a moral system. it's it kinda answers the question of what matters before anyone thinks to ask. and like the cleanest version of it I would say is like take a a really hard legal question. A lawyer with some great expertise, answers it in fifteen minutes because ten years of their experience sends them straight to the answer. But in maybe they bill a quarter of an hour.

a less experienced lawyer, maybe it takes them three uncertain hours. They're thinking about it for a long time, but they get to the same place and they bill three hours. So same conclusion, but twelve times the fee. And so if you follow that to the end, by the meter zone accounting for the billable hour, the fastest mine in the in the building is the least valuable producer. And so I think a lot of times people don't say that out loud.

Jason Marsh (09:04)
that's a great point that leads into my next question, which is does the bill of blow hour sometimes reward time spent over judgment or efficiency as you mentioned, or just even better outcomes?

Jeff Cox (09:16)
The answer is yes. I think like that's the the easy answer to this is it does reward certain behaviors. it also I think it changes the way you think about the time that you spend on things. if you're constantly just thinking in, six minute increments, and point one life kind of a life cycle of what you're doing, you forget that sometimes the ability to ponder and think about an issue, maybe for twenty minutes to really like deeply question your own judgment.

is actually incredibly valuable for the client. It might be tougher for you to bill, but at the end of the day, it could be a better outcome for your client. And so I think that's that's part of it.

Jason Marsh (09:49)
and so can you not bill for

that to say, hey, I'm gonna, pen is not gonna be attached to paper or fingers on the keyboard. I'm going to sit back and I'm gonna really think about this to try to come up with the best path forward. So are you saying that oftentimes lawyers maybe will not bill for that and then as a result, it discourages that actual behavior? So you just need to just keep hammering away at a document or some other thing that seems more material?

Jeff Cox (10:14)
it's a good question. I would think back to my time at Citigroup. is that some kind of a billable item that your client would recognize? free time to think about something. I think it should be. but the reality is, will in-house sequel departments accept that as something from a timekeeper? fun story. I used to sit next to an invoice auditor.

at whenever I was working at a study group in a cubicle. And all day long he would go through invoices and look, nonbillable, nonbillable, nonbillable. and I think unfortunately we don't allow for that unstructured time. It's hard to quantify it. What were you really thinking about during that time? Were you thinking about quantum mechanics or how to actually solve my legal problem.

Jason Marsh (10:48)
Yeah, and s were they actually saying that? Like out loud where you could hear them? Like unbillable, unbillable,

Jeff Cox (10:54)
Sometimes. I think he was happy to find the the non billable items in an invoice. So yeah.

Jason Marsh (10:57)
Yeah, I mean that that's interesting.

that's interesting to me that even though you're spending time and that thought is important work, that just becomes a non billable hour. And so what about other things that is also important, as you already mentioned, that is harder to bill, like mentoring, being creative, or as we're talking about, just really having the time to think through a problem. What happens? You're saying that it just ceases to happen in most cases?

Jeff Cox (11:21)
I don't know if ceases to happen is the right way to think about it. On on some level it's just if it's not incentivized, it's not done proactively.

a good example might be there's some of the bigger law firms will allow for innovation credits towards your billable hour requirements. And so if you spend time learning a new AI tool, can actually bill that against your time. but are you allowed to do the same thing for mentorship? If you take some time to really teach a junior lawyer, someone, fresh out of law school, how to deeply think about a problem, maybe explaining something to them on like this is actually the best way to

to to frame this argument to like accept this questionable position but make it a strength it's not something typically that you can put against your own targets and so especially if you're at the more senior end of the firm you have high targets you need to go after them and so on some level it actually penalizes that kind of activity by quietly saying we're not gonna pay you for it

Jason Marsh (12:15)
Yeah, I mean yeah that's so interesting because, it makes me wonder, is the problem, really the billable hour itself and the targets that you mention?

Or is it all the things that the profession has now built around it? Because when you look outside

Jeff Cox (12:26)
Mm.

Jason Marsh (12:27)
of the legal profession, all these things that we're talking about, mentoring and professional development, all a lot of these things I think at good businesses are built in, right? Because that billable hour isn't always the

Jeff Cox (12:37)
Right.

Jason Marsh (12:39)
pressure that exists. so what is that in terms of like how the profession has built.

everything based on the foundation of the billable hours and then of course the targets that exist within them.

Jeff Cox (12:51)
Hm. Yeah, I mean I think they're actually this is not connected to my writing about the Emersonian lawyer, but I think there might be a a deeper, challenge that the legal profession faces is that it's typically built on a partnership model.

there's not a lot of long-term thinking about a business structure as an organization. Every year profits go in and they come out. and so there's not a lot of long-term thinking, a lot of deep level succession planning. in bigger businesses, larger corporations, even in legal technology companies, you're really deeply thinking about long-term, like what's gonna happen to this as a business versus how do I get as much profit as possible out of it? If you're thinking more long term, you're really worried about.

having junior talent that's good. You need to worry about who's gonna be the next partner versus how do I make as much money as possible. And I don't want to be too generalized, I think there's some firms that do a great job with this. And a lot of times it's the smaller firms themselves that have a little bit more flexibility. But I think when you're in a much larger setting it's difficult. It can be more difficult.

Jason Marsh (13:51)
So you take this idea a little bit further and you actually make it personal, which is what I think is interesting. And so in one case, in one of your essays, you describe an associate at her desk, it's almost midnight. she's telling herself, this stretch is temporary. meanwhile, she's slowly normalizing a version of work that is costing her more than the hours can actually see. And your point is that every hour build

has another side to the ledger and that's the personal cost to the human being doing this stuff. And so in your view, what are lawyers actually paying for in terms of that personal cost when they keep saying yes to one more hour, one more matter, another

Jeff Cox (14:26)
Hmm.

Jason Marsh (14:27)
year, I'm just gonna push through this?

Jeff Cox (14:28)
Yeah, I mean it it gets back to maybe to take it back a little bit. for each of the essays are connected to a movement within what I'm writing for the Emersonian lawyer. And the main essay from Emerson that we're focusing on here for this one about the account, about the billable hour, about what it costs, is Emerson's essay on compensation.

he has this concept that there's kind of like a every gain has a cost. there's no free lunch. even if it was free for you, someone took the time to grow the grain that created the bread, someone caught the tuna that's in your sandwich. There was a cost somewhere. and I think what Emerson gets at in this his essay on compensation is even if you don't see it now, there's a hidden cost to everything. And for lawyers, a lot of times you focus on what are you getting out of it.

I can see whenever I bill this hour, I make this much money. but what you don't see is the hidden side, the other what I call the other ledger. There's the one that's very clear, the number of hours that you bill, how much in money you make for them. But we don't typically think about the cost. the things that kind of you're missing. maybe skipping meals, something that probably a lot of lawyers are scarfing something down on their desk. missing time with your family. Maybe you didn't go to that soccer game.

Maybe you couldn't go to some function with your family. Maybe you missed out on going to a bar associate a bar association event, being a part of your community. there are these other types of costs that we don't really add up. And if we do, it's typically in retrospective. We think about it in in terms of past costs.

And so the the core argument from the essay you were talking about is really you need to be thinking about these in a forward-thinking manner. So whenever you're choosing, if you if you in and this is also not an indictment of someone that chooses to work at midnight. I think part of what I get as is as long as you're making the choice and not just falling into a default, that's that's okay. That's your choice to make. but you need to add up what you're actually paying for in the moment. Because if not

you're just deferring it to a later problem. it's something that you'll deal with, whether it's a health issue later on in life, a a lost friendship, not feeling a sense of belonging to your community until you realize you aren't. that's what it's really getting at.

Jason Marsh (16:32)
Yeah, listen, I get it, some people they love working and that's important to them and that is their choice. and I think we're more talking about the people that do maybe wanna have, if this is even a okay thing to say anymore, a work life balance, if that's what they're after. But in terms of these hidden costs, like why are they easy for people to miss while they're actually happening?

Jeff Cox (16:52)
I think it's 'cause it it's silent in the moment. And a lot of times there are deferred costs. it's hard to tell

why maybe a friendship has been suffering if you don't realize you're not spending the time to talk to somebody. but you're not talking to them because you're spending all these hours billing. it's hard to realize why you've lost a connection to a family member or maybe your kid because you're not showing up to these games. But eventually, it all comes kind of crashing at a certain point. the I don't want to say the easiest, but one of the more visible items is whenever it affects your health. if you decide

To work yourself to the bone for 20 plus years. whenever a health scare kind of comes out of nowhere, it didn't actually come out of nowhere. You've been paying for it for years. and I think that's why we don't think about it. It's one of the concepts that I get into is that the extraction, the cost, runs highest in your earlier years because you really can't feel it until later on. And that's

Especially for younger lawyers. you're eager to to do as much as you can to hit and get past those targets. But you might be forgetting what what you're leaving on the side. it's

It's not something that we track openly. And so it and it's also a a tough question to wrestle with. to do these things, it's not easy. I'm saying, just track another ledger. But that's a tough thing to acknowledge in the moment that you are choosing to let go of these other things, like family, friendships, community. It's not an easy it's not an easy choice and it's not yeah.

Jason Marsh (18:16)
and is this something you recommend is just actually keeping that second ledger, just so that you are aware to say, Hey, I'm working a lot of hours here, but I'm building towards something, but in this other column, here are the sacrifices I'm making, whether it's health or family, just so you have an actual accounting for it as you talk about, but just a general awareness, right? is that something you recommend doing?

Jeff Cox (18:38)
Yeah, I mean I I think that's the most important thing here is you need to honestly understand what what you're paying. But the secondary thing to say out loud and especially to the people that might be watching this in your audience is if you're at a firm and leadership, you should think about how you can change that maybe. What are the costs that people are paying? can you change the incentive structure?

what are the things that you should be doing to improve people's lives to make sure they do have time, to go to their kids' soccer game. that's the deeper level thing here is yes, you should be taking the account. but if you're in a smaller firm where you get to choose that you don't have to inherit this type of a billing system, what can you do to make it better? I think that's the secondary question. Yeah. You should track it in the moment 'cause you don't wanna be no one wants to be caught with a hidden bill, later on, some hidden fees.

but they're recruiting.

Jason Marsh (19:25)
Yeah, this is such a good point because I think more broadly, I think we were even talking just a few minutes before the show and I was just saying like I I don't like trading my piece for money. I don't do that anymore. But that also

something I'm able to do. I could not do that when I was,

Jeff Cox (19:39)
Sure.

Jason Marsh (19:40)
you know, 22 and just starting my career. So I've long felt like, listen, when you're young, you have a lot of time, you have a lot of energy, that's what you can leverage, right? And then as you get further along in your career, right, your time and energy is obviously less, but now you have experience and hopefully you've achieved, where you can start making choices. But for the younger people,

'cause this is an important thing, right? Like I believe of course you gotta work hard when you're young, but what like where's that line? Where's that balance? Because for me it seems like much of the problem is this belief that life can always just be deferred until later,

Jeff Cox (20:15)
Mm.

Jason Marsh (20:15)
right?

And people do this all the time. They'll work, I'm just doing this for retirement all the way up until, they're getting ready to retire and they drop dead and never get to experience that, later. And so, how much of that is related to that, deferring until later and that just that idea.

Jeff Cox (20:28)
Yeah, it's a

it's a good question and an important concept, One of the things that I talk about is that, you might be trying to def defer something until later, but you don't get your deferred self whenever you reach that point. You get the person that's been doing the thing for those many years. and that's the thing to think about. It's like, yeah.

You're a young person, like burning through the midnight aisle, like both ends of the candle kind of a thing. but you don't get your yourself from now twenty years ago. You get whoever comes out on the other end. And I think that was one of the things that got me in Emerson's essay on compensation is that, it's more than just, you know, this cosmic balancing of things at the end of the day. Y you're you're a person with a soul and a life.

And at the end of the day, whatever you choose to defer, you've kind of lost that. there is an accounting. We all have to pay it at some point. but you might be losing out on things that you might not have made that choice if you'd known it in the moment. I think that's the big piece about it. If you realized right now that maybe you'd lose important friendships, connections, ties to your family and your community, would would you make that choice?

I think a lot of people would probably wouldn't, especially if it was that stark.

Jason Marsh (21:40)
Yeah, and I think that's a good takeaway that, just the ideas, you should be just being aware of this and actually keeping track of it just very simply, let you know, you can't manage, what you don't measure. And so as long as you're keeping track of this, you have some measure of awareness there. But I want to get into origination and who gets the credit and then what compensation really rewards. And so, you you describe, I think, a pretty familiar law firm scenario, right? One partner

Brings in the client, another partner does all the work, builds the relationship, and becomes the person the client actually calls and trusts, but the originating partner still gets most of the credit for all that business. And so never nobody ever really thinks, that's necessarily even thinks that the system is necessarily unfair, but the outcome can still feel disconnected from where the value was actually created. So what

What in your view, what does origination credit versus doing the work, building the relationship, tell lawyers about what firms really value and ultimately reward?

Jeff Cox (22:41)
Yeah. I mean I think I would start off by saying that origination credit does make sense in many contexts. if there weren't for rainmakers or if there weren't for people bringing in clients into a firm, most firms would cease to exist. You can't just have people that are really good at doing legal work and and not have people that are good at bringing in clients. So there's a reason for it. but what it does reward is something that maybe creates different incentives.

And also forces people to think about the access of like getting clients versus the expertise. pretty soon on if you're a junior lawyer and you see or you're someone rising up as a junior partner and you see that the most important thing is getting clients versus improving your expertise and writing a brief, what are you probably gonna do with spending your time? You realize that what's really happening Yeah, I and

Jason Marsh (23:27)
That's that's what I would do. Sounds a lot easier. I'd rather go like mingle and hang out and bring in

business and assuming you can do it, right? It's obviously the big

Jeff Cox (23:34)
Right.

Jason Marsh (23:34)
difference between being in sales versus being in delivery. But I mean, you know, being in delivery to law firm is it's a grind. I mean, it's a lot of work. The stakes are high, the pressure's high. I'd much rather be hanging out, at the bar and go, schmoozing with people saying, bring your business over here. I g I got somebody that's gonna work a hundred hours a week on your matter.

Jeff Cox (23:52)
Yeah, and it's not to say that's the the easiest thing to do. Some people have a natural talent for it. it's a critical skill that you have to have to keep your firm alive. the question is just how much do you avoid that over the actual expertise?

Like the the kind of the scenario that I give and I think you kind of alluded to is that someone brings in the client, they say, I've got this person that's gonna work all these hours for you, but then they kinda hand it off and the person that is actually doing all the work, maybe another partner who's an expert, maybe some other associates underneath them, they're doing all the work. And then eventually that initial partner that brought them in, they're no longer the point of contact. They're not the person that the client wants to talk to. They're not the expert on the matters, they don't understand the business, but they are

still getting a lot a lot of the actual a lot of the

Jason Marsh (24:34)
so why is

that? Why does this system reward the person who opens the door, brings in the business way more than the person who's making the client actually wanna stay and continue working with the firm?

Jeff Cox (24:47)
It's a choice. it's a business choice. I'm not here to to justify it as a decision. but I understand the why. The why is that if it if it wasn't a thing, people probably wouldn't spend time on it.

we talk about this as a a question of like, compensation the account. if someone wasn't incentivized to bring in clients, then why would they spend the time on that? Why wouldn't you just become the best briefwriter possible? why be be the best at writing a contract? they need to have some incentive structure for someone to go get the client. so it makes sense. But the question for it is also, what does it teach? What are the hidden costs?

Whenever someone realizes that, I might be the best lawyer in this firm, but they're not gonna pay me for what I'm worth because I'm not good at bringing in clients, they might leave. So then you lose your best lawyers who are the smartest people in the room because they decide maybe I can go join another firm where they're gonna reward my expertise. And so those are some of the other hidden costs, disfa dissatisfaction.

Jason Marsh (25:37)
Right.

Jeff Cox (25:39)
people that decide to leave. it doesn't happen immediately, but eventually there is some cost to that kind of a structure.

Jason Marsh (25:45)
Yeah, because when good people leave, right, that's gonna affect the stuff happening further upstream. Now that same lawyer that's saying, I've got these great attorneys, they're gonna work, relentlessly on your matter, now maybe he's able to say that with a lot less confidence because you're losing people. it's interesting because I wanna ask you about this in in the term in the context of, private equities now

investing, are able to invest in some cases, you directly, other cases through MSOs. But basically there's this whole new asset class for just private

Jeff Cox (26:14)
Mm.

Jason Marsh (26:14)
investors to get involved in in the legal sector and have ownership in law firms that wasn't previously allowed. But one of, as I've been reading about this, one of the things that I've noted is that, in terms of valuation and and the things that are prioritized, particularly in the definitive agreements, there are literally lists of people

people that are tied to origination that need to be retained after the transaction because without them the belief is that the company they bought has less value and I wouldn't say it's and I think this is common in MA because it's just the way things are viewed, but and it's not to say that

the people that are at the operational level doing the work have no value. They certainly do, but there are not often lists of people like, hey, we need to keep these,

maybe if you're a practice group leader or something like that, but there's, like deeper in, the any firm, there's the real human beings doing the bulk of the work. and those people don't get treated the same way.

Jeff Cox (27:10)
Yeah,

I mean you think about it with any company that's getting acquired, if you probably don't wanna lose the head of your engineering if you're, a tech company that's getting acquired, you're probably gonna put in some provision to make sure that head of engineering is sticking around for whatever time. And you're probably tying their compensation to their, decision to stay. And you're gonna make it worthwhile for them. it's not surprising. you look at the Rainmakers. I think in any in any firm, especially the larger firms,

The rainmakers can make a considerable amount of the money for the firm. and so it's not surprising. That's what I would say.

Jason Marsh (27:39)
Now, i i do you think there's a better way

for firms to reward both the rain making and the the people doing the work, without undervaluing one or the other, but trying to find a balance there?

Jeff Cox (27:50)
I mean I think the answer is obviously yes. Is but it's it's an open question. I think the the problem is that we don't really talk about it. and and I'd even say, one of the things that I've seen over the years for different types of firms is how they split up origination credit. Can you hunt in a pack? or is it just the one person? do you sh do you split that among different partners?

Different practice groups, or is it just the one person who brings it in? And that causes some weird political infighting. I think some firms do get it right. I'm not gonna name names, but one of the this is more pulling back from my experience in legal tech, I did a an interesting survey on, data maturity in business development in different firms, and one of the most fascinating things that we looked at was how they split up origination credit. How do they decide what

what best ways to split up the profits. some firms let you hunt in packs and some it's a all kind of a lone wolf mentality of just this one person gets all of it. Regardless of whatever

Jason Marsh (28:49)
Yeah.

Jeff Cox (28:49)
work comes in from the client, they're the original person who brought in the client, so they get everything. And I think that might

Jason Marsh (28:54)
Yeah and it

Jeff Cox (28:55)
be something that's like I guess just to extend the analogy of someone brings in the client, right? and the other person works for eighteen months and they're not getting as much money.

What if that person that's been working for eighteen months brings on new types of matters? What if they're doing such a good job that like, we should invest in other practice areas of the firm? Does the original person that brought in the client into door, do they get all of that? Does that

Jason Marsh (29:18)
Yeah, it wouldn't make sense for that, right?

When you look at just other service based businesses, they have account management, right? And or customer success managers. And those people actually have metrics to say, hey, obviously the sales team or whoever's responsible for bringing in the account, they're now done. They're not really handling the account on the day to day, but it's that customer success manager, not just to retain, but to grow the account. and and so

Jeff Cox (29:41)
To land and expand. Yeah.

Jason Marsh (29:42)
Yeah. So it seems like the friction is in the law firms is they just have never done it this way. And so th you're just living with this is the way it's always been done and that then creates the political, challenges that some firms maybe just can't seem to get past.

Jeff Cox (29:57)
Yeah, I think that mentality of this is the way that we've done it is probably one of the most dangerous ones in a law firm context. especially now. Especially when AI is kind of challenging the underpinnings. Whenever outside money is trying to come into law firms, that how we've done it always kind of mentality is being questioned directly. And for some people it's scary. I think it's a good opportunity to to look at things. It's not a bad thing to ask questions. One of my mottos.

Jason Marsh (30:21)
Yeah. So all right, well, so earlier we were talking about sort of the idea around, the impact, on, the human costs. So because you make the point that eventually some of these costs, right, they stop being abstract because the body is keeping its own count, right? The sleep you lose, the stress that you normalize, meals that you've skipped, lunches, etcetera, the exercise that stops happening, relationships that suffer. A and in my mind, even simply like just

Your brain doesn't even shut off at the end of the day. You're constantly like ruminating on this stuff. And so it goes back to like you just can't find any peace outside of work. And the firm's not recording any of that, but your body is. And so what do you think the legal profession still fails to understand about both the physical and psychological cost of the way lawyers are are expected to work?

Jeff Cox (31:10)
It's a great question. I mean I think the more subtle answer that I'd say is it's not that the profession doesn't understand it, we just choose not to count it or stalk about it as out loud. I think a lot of people in the profession know someone who's struggling. know someone that might be dealing or I kind of

Have issues with substance abuse, have depression, anxiety, like you're saying not being able to sleep. Maybe they literally drink to go to sleep. and after years and years of doing that for quite some time, it impacts your health. I think the biggest thing is we just don't openly count it.

we don't put it down in writing. That's why I part of this kind of movement within this series, I really wanted people to think about the silent costs. The stuff that's there that we we don't really record.

Jason Marsh (31:52)
So I appreciate that you're highlighting the difference there because I think there is a ton of information and help out there around attorney wellness and different things attorneys are struggling with by the nature of the work. But the point you're making is yeah, it is people are aware of this, but all of that stuff is not recognized. It's not being counted as part of the cost that,

people are putting into the work. And so but why are these costs so easy for the the higher performing lawyers to just normalize or completely dismiss in the course, they just expect it to be this way.

Jeff Cox (32:24)
I mean I I think we've kinda gotten to it a little bit. It's that these costs are typically deferred. it's like you've got something that's on a delayed payment schedule. you're not paying for it right now a lot of times. Yeah, I mean if if you're a high performer, maybe you don't feel like you need as much sleep. You can work on two to three hours for, months on end, eventually you crash. we're human beings. I think one of the things that I also get on in like in a perfect system, someone could just

keep working forever. but we're human beings. We have bodies. They they break down. They fail. It's the one thing that the compensation system can't fix is that you're a human being at the end of the day. You can't work 24 hours in a day. I'm sure some people have tried. I don't know how they're building their clients for all those hours. but I think

Jason Marsh (33:06)
Right.

Jeff Cox (33:06)
that's why is that it's easy to defer this stuff. Especially if you're a high performer who thinks, I can just push through it. I can push through the pain. that I think what

I'm

trying to get at the end of the day is some of these costs do show up. it's gonna be there. You can't, push your way through this. Is it's not a it's not a growth opportunity to force yourself to not sleep. it's a problem for your health at the end of the day.

Jason Marsh (33:28)
and so then how should lawyers think about health and way well being when they're weighing the hours, the money, career advancement, against, what all of this work is costing them personally?

Jeff Cox (33:39)
Yeah, I I think the first part comes with actually being honest with yourself about it the it's the choice, right? Is it worth it? maybe in the moment it might be. But it that moment can't be the moment for twenty years. And so I think that that's really the the biggest thing that I'm challenging people with. I'm not trying to judge someone for making that choice. if you look at the account and it's a decision you're willing to make, maybe you do need to

To work on a weekend once because you decide that it's worth it. You want to help out this client, you want to get a better outcome for them. I'm not the person that's here to judge you. I'm saying that you should make sure that you're actually making a choice. it shouldn't just be a default. And because that's really the danger here. Is if you just go into the default, continually go into the default, that's where it's more damaging and that's where it's more dangerous because it's going to come out of nowhere. That hell scare that comes out of nowhere, like we were talking about earlier.

Actually didn't come out of nowhere. It was a series of decisions made over years. And so I think

Jason Marsh (34:36)
Yeah.

Jeff Cox (34:37)
that and at the end of the day the question is, what is your goal? What do you want? is earning that money, like I think what you said, not trading your peace for prosperity. you have to make a decision on what really matters to you.

Jason Marsh (34:47)
and it does seem like, given the the billing structure that firms use, it actually ends up rewarding, these very traits that make lawyers just really good at overriding their limits or just ignoring all those other costs.

Jeff Cox (35:00)
Yeah. I'm not here to say no. I think that is something that's rewarded, obviously. when you have billable hour targets that are like, I don't know, eighteen hundred or twenty two hundred hours, it's gonna reward someone who pushes through. especially when there are plenty hours that you're not gonna bill for, right?

Jason Marsh (35:17)
Yeah, of course. All right. So let's talk more about, what are lawyers actually working toward, right? and so you talk about the the partnership track, and it's still one of the clearest answers the profession has for lawyers about what success is supposed to look like. And you make an interesting distinction between the two things it promises, right? The money, which is very real, of course, but then the autonomy lawyers often assume will come with finally reaching the top.

so what happens when lawyers spend years working toward partnership with the expectation they're gonna have more freedom, only to find that autonomy that they were chasing comes within like an even heavier set of obligations in many cases.

Jeff Cox (35:57)
Yeah, the concept that kind of use is the autonomy is actually mortgaged. whenever you get to that point of being the partner, you actually are even more kind of like pulled down to some of your obligations. So the client base that is now yours that you're making money off that you're an equity partner of, well that's actually your income stream. so you can't risk that. It it's something that you've worked towards. And so you're more tied to continuing

Down the path that you've gotten. It's similar to an associate track, but in reality you're more tied down to the risk connected to losing clients. you don't have the same level of freedom. you've reached a different part of the mountain. maybe the mountaintop that you might see in the moment, but in reality, you're still constrained in the same way.

Jason Marsh (36:36)
Yeah, I do like that mortgage concept a lot. Reminds me of some degenerate gamblers I know that, when they're losing a bunch of money, they say, don't worry, those losses are just the down payment on my future winnings. why do you think autonomy is such a powerful part of the carrot of that partnership promise?

Jeff Cox (36:53)
That's a really good question. I mean I think at the end of the day, there's this question that lawyers are kind of given. It's Did I make it? did I make it to the mountaintop? And they forget to ask the question of what did I make? Like did I actually create a system where I'd be more free, would have the opportunity to do the matters that I really wanted to whenever I was an associate, but I was just stuck on doing this type of work.

And whenever you get to that, the mountaintop, whenever you get to the point of asking, did I make it? you might find that you've pushed yourself down into a hole that's harder to get out of. the next like movement in my series is about circles. We're kinda like jumping a little bit, but it's the concept of like are you calcifying or crystallizing kind of the circle that you've built around yourself? Are you able

to use it as a platform to do something else or have you kind of built yourself into a world that you aren't able to escape or that you don't want to? I think a lot of times it's that question. It's the did I make it versus what did I make?

Jason Marsh (37:50)
Yeah, what I understand is it's what you're saying is these clients, the books of business, your reputation, the relationships that you create in the practice that ultimately make you more successful also make it way harder to change direction later because you you're just so entrenched in it.

Jeff Cox (38:05)
Yeah, no, that's exactly it. you've essentially you've built yourself into a lovely fortress, but you're stuck in the fortress, essentially, and I think that people think about it as more of like the analogy I'm thinking is like it's not a stairway to heaven, but you are going up in a vertical and you can really only keep climbing upwards, in that same vertical. it's really hard to do something outside of your area of expertise. It's hard to pull in new types of work.

you're probably not gonna be as good at. You might not be able to find clients in it. So you're even more siloed into that practice group for that niche of niche areas that you've built into. And

yeah.

Jason Marsh (38:40)
yeah, so I was gonna say, so what do you think lawyers should be asking themselves earlier in the partnership track? So they don't they're not waiting until they finally get there to figure out what they actually wanted and then this isn't it.

Jeff Cox (38:52)
Yeah, I mean I think it again, it goes back to the goals of like, what do you want at the end of the day? What are the things that you truly want? If you wanted autonomy, are you sure that you should be on the partnership track at a very large law firm should you create your own practice? you don't have to necessarily leave the law, but are you in the right setting? are you in the right environment that's gonna actually help you reach your goals? At the end of the day, I think that's the most important question that people can ask.

And it's not me saying, you shouldn't become a partner. what if that's actually what you truly want? If you find a way to do it but retain, your sense of self, who you are, you keep that account throughout the years, you choose to make certain payments up up front instead of, waiting for them to come later on. I think that's it. You need to figure out what your goals are. If you wanna still have, the work life balance. I heard someone say work life integration previously and that's

feel like for someone on that track that that's probably closer. you choose to say no to some engagements. You make strategic decisions to say no. and it's those are probably the hardest things to choose. you don't work on the weekends. You actually hang out with your family. You decide to go to the soccer games. maybe you're losing the potential to be at the top tier in your firm. and that's okay. That's a decision. But you have to make it and you have to make it early on.

Jason Marsh (40:03)
Yeah, it's because it does seem like a big part of this is being able to say no to things, right? Because I would imagine you're an associate, you're trying to work towards being partner. You're there's a lot being asked of you and probably the inclination

Jeff Cox (40:14)
Yeah.

Jason Marsh (40:16)
if you want to advance is just keep saying yes, yes, yes. And of course, we hear all the

time that,

We all in our lives need to create boundaries and be able to say no to things and be comfortable with that. But I think it all just goes

back to where you're trying to go and kinda what leverage

Jeff Cox (40:29)
Yeah.

Jason Marsh (40:29)
you feel like you have to actually say it.

Jeff Cox (40:32)
it makes me think about, one of the real reasons that I started this essay series was to help people find themselves. I've found Emerson to be super helpful throughout my career. And what really drives me as a person is helping others and sharing knowledge. And the core question that I wanted people to wrestle with throughout the entire series was: are you following your compass or your resume? If you're just following your resume, the next step, after you go to law school, you get your clerkship.

Become an associate, become a junior associate, you become a senior associate, you become a junior partner. Obviously you want to be a senior partner, maybe you want to be in firm leadership. that's following your resume, going literally from one logical step to the next. It's a syllogism, right? Like we're taught to build in law school. But the problem is, is that what do you actually wanted? Are you just following this path because it's something that other people have done, or because it's the thing that you're actually trying to build?

I think that's the question that a lot of people fail to ask early on. It's not an easy one though. It's hard to get off that track, especially if you spend a lot of time and effort trying to get there.

Jason Marsh (41:29)
Yeah, and we're all on some track in life, right? I mean, it's like, you go to school, you go to college, you get married, you have kids, you work hard, you buy the house, you buy the car, send your kids to college and then you retire. Like it's just everything's

Jeff Cox (41:40)
Ha ha.

Jason Marsh (41:40)
a track. And it I think it's hard to get off of it. Again, if you're not being aware of what's going on and I think that's a lot

of what I like that you're talking about here is just having the awareness to recognize what's going on and then you can make your own choices within there. I wanna get into the what we're a little deeper in what we're talking about. The idea of, if you're building the career you actually intended, right? Because part of this is, when you take a step back from all of it, the bigger question seems to be for a lot of lawyers that are

Consciously building the career that they want, or are they just getting really good at aligning, as you say, towards the incentives that are just right in front of them? Because if you optimize for the billable hours or origination, which is what I would do, compensation, partnership long and all these things, you may eventually become exactly that, exactly what this system rewards, without ever stopping to ask whether that was really what you wanted in the first place. So how do you think lawyers?

can evaluate whether the the career they're building is actually the one that they wanna build.

Jeff Cox (42:40)
That's a really big question, Jason. And it and it's you know, it's it's the million dollar question for everyone. I think it

Jason Marsh (42:47)
is something I

think the Emerson lawyer is equipped to answer.

Jeff Cox (42:49)
Yeah, yeah. It's

I would say at the end of the day it requires answering probably the most important question of what do you want at the end of the day? what are you trying to achieve? what is your own goal? Doing some deep level self-reflection, some introspection. So I think at the end of the day it comes down to finding yourself. Like who are you as a person?

I'm a lawyer. I personally have not practiced in the sense of I have not needed to bill an hour. I haven't had to, work for a client and put in all the hours to try to get to the partnership track. Because I chose a different path. because I wanted to work in in house. I wanted to work in legal tech. I dabbled at Orac 'cause I was curious about working in a law firm. but I think for a lot of pe

Jason Marsh (43:30)
And how did you come

to that? Did you ever practice law at any point and decide this isn't what I want? Or did you really think about this more deeply before you ever even made that step?

Jeff Cox (43:41)
Yeah, it I personally, it was more of like the TMI. I always wanted to be an in-house counsel. That was kind of my thing that I was interested in. And so right out of law school, my first real job, I worked in legal operations at Citigroup. I actually taught myself how to negotiate specific agreements using the e-learning platform at City. I technically was an in-house counsel for about a month and a half until I moved into a legal tech role. So

I did I did do it for a hot second. but in reality for me the thing that I figured out that I wanted to do more than anything was to write. I might be a lawyer, but I'm a writer at at my core.

And what I get to do in my day job, both Steno now and in other roles at Unicor, at VLEX, and Oric, was to create thought leadership, to write, to help other lawyers understand how to use data technology AI. And that to me is more valuable and more rewarding than actually doing the work. But it took me a while to figure that out. It wasn't until I actually wrote an article about AI and the law almost a decade ago that I realized I enjoy doing this.

but how did I get to that point? I decided to do something that was outside of my wheelhouse. I decided to interview some legal tech CEOs about AI, before it was a real thing. I enjoyed it so much that I I took a leap. But it's not an easy thing to do. And I don't want it to make it seem like this is some easy choice. it takes a little bit of risk.

Jason Marsh (45:01)
and so for lawyers that are listening, what else should they be looking at besides, compensation, title and and the status, when they take stock of their career and where they really want to go.

Jeff Cox (45:12)
Can say that one more time? Sorry, on the

Jason Marsh (45:14)
No, I'm just saying in terms of like you've made this leap, and not to say everyone else should be, but like what are some of the things besides like the normal things, compensation, title, the status of being a lawyer? that lawyers should be looking at when they're trying to take stock of their career and determine is

Jeff Cox (45:29)
Mm.

Jason Marsh (45:30)
this really where they want to go?

Jeff Cox (45:31)
Yeah, it great question. I think a lot of times it's about like what do you actually enjoy spending your time on and what are your what are your skills, what are your talents?

Really great at playing around with the law. I I love a good legal problem, but I also love writing. I love creative writing and using it as an outlet. I enjoy writing in my free time whenever I get the opportunity to. But it takes it took a while for me to figure out that that's what I actually enjoy spending my time doing. Like the the question that, it's kind of the cliche, what would you do for a job that you wouldn't even get paid for? what are the skills that you have?

as a lawyer, we're we're taught to do so many different things in law school. We're some of the deepest critical thinkers. We're great problem solvers. We're political animals at our best. and I think the question for us is where could those talents lead you? There's so many alternative paths, especially now. Like I'm well a decade outside of being in law school and the number of jobs that are available now for lawyers where you don't actually have to practice, it's fun. I think it's an exciting time.

But to go take one of those jobs means thinking about, well, what are the skills that I have? What could I translate?

Jason Marsh (46:34)
So this actually that's a perfect setup for my next question, which is if a lawyer's thinking about what we're talking about here and they realize that maybe the system is pushing them toward a version of success that isn't actually what they want, what can they realistically change or start working on in the near term without just blowing

Jeff Cox (46:52)
Hmm.

Jason Marsh (46:52)
up their career and going off and doing something entirely different?

Jeff Cox (46:56)
Yeah, it good solid question. I think

The thing that I get on in the next series about circles is question of, essentially you build these like circles in your career. whenever you're in law school as a law student, that's one of the circles. You become a lawyer, that's another one that you've reached. Go become associate, that's another one. but what's on the edge of that? if you're an associate, maybe instead of just doing transactional work all the time, you do a pro bono matter that's litigation related. finding ways to kind of broaden that circle that you have to find the next one.

What's something adjacent to what you're doing that you enjoy? What's something that you can do? It's not, quit your day job and just go write poems all day long. Probably not going to be a good thing for people that need to pay their rent. But what are the things that you could do that you actually enjoy in the side? What are the skills that you can build? Are there certifications you can get? It's not something you have to dive all in at once. but what are the things that you could build slowly over time?

What are the associations you can get involved in? when I was early in my career, one of the most important things was also getting involved in pro bono. I think for someone that's looking for a change in their career, one of the best ways is to test out new practice areas. There are plenty of people who need help that can't afford legal services. You want to talk about something to find maybe your purpose, go help someone out in a practice area that you know nothing about. Teach yourself something new.

I think there's there's something to be said for forcing yourself to learn something that's not in your current practice area that you're doing. that's a muscle that you have to build. And if you want to jump into a different career path, you need to first kind of b build the twitch muscles to start jumping. you need to kind of do some bunny hops before you're trying to dunk. and I think pro bono is a great way to do it.

Writing, I would say, is a great way to do it. Write about topics that are important to the legal industry. Yeah, it's it's doing the small things. You don't need to leave the law, you don't need to leave your day job. But what are the things you can build over time?

Jason Marsh (48:49)
Yeah, I think that's an outstanding set of s suggestions and ideas and honestly I think it's the perfect ways to stop because my very last question, which you just answered really well,

Jeff Cox (48:57)
Sure.

Jason Marsh (48:58)
was going to be what are the questions that lawyers should be asking themselves, so that they don't, wait until they're

doing, a partner that they don't want to be or they're burnt out. so yeah, this is this has been great, Jeff. Thank you so much. I'm here with Jeff Cox and we've been talking about how the systems law firms use the measure and reward lawyers can shape what they value for better or worse.

what they sacrifice importantly and ultimately the kind of careers and lives that they build. So you can find Jeff first off at the Emerson Lawyer, I think

Everybody needs to check this out because Jeff does really bring a unique and you've heard him talking that, but the way he writes, the point of view that he has, is really interesting and different, certainly than anything else I've seen out there. And I read a lot of practice mismanagement related stuff. So you can find that at Emerson Lawyer.substack.com. I'm gonna have links to all of this stuff in the show notes. So don't worry, you can also find him on LinkedIn. I'll include a a link to that as well.

Yeah, go ahead and subscribe if you can to the Emerson lawyer on Stubstack for Jeff's weekly essays on the pressures, incentives, and trade-offs shaping legal careers. Jeff, anything more you wanna add?

Jeff Cox (50:03)
No, I really appreciate the opportunity to share here, Jason. I think the biggest question for people, especially connect to this topic, is are you are you taking account into the the hidden costs throughout your career? You know, and figuring out what do you want? Are you following your compass, are you following your resume? And at the end of the day, like do some introspection. Yeah, when we have so much time here on this planet, you should figure out what you want. especially if you're a lawyer. Right.

Jason Marsh (50:26)
Yeah, and just and be mindful, right? I mean, is that what we're talking?

Just being mindful about what you're doing and where you wanna go and not just being on that, resume track as you put it, right? and just think about it. And then if that's being on the track is what you want, then just keep track of what you might be sacrificing again, just so you're aware, you're mindful of it.

Jeff Cox (50:44)
Yep, that's it.

Jason Marsh (50:46)
Yeah, good stuff, man. Well, Jeff, thank you so much for your time today. man, I really appreciate you joining me. This has been a really an interesting conversation. So Jeff Cox, everybody, and that's gonna be it for today. Got lots of new shows coming up, so please stay tuned and check them out. But until then, we'll see you next time.

Jason Marsh (51:04)
Thanks for listening to the Alpha Lawyer podcast. I'm your host, Jason Marsh, and I appreciate you joining us today. If you enjoyed this episode, please subscribe, leave a review, and share it with other lawyers who might benefit. You can find more resources and insights on building a thriving law firm at alphalawyer.io or the Alpha Lawyer YouTube channel. Until next time, keep building the firm of your dreams so you can live your best life.