Tag: billable hour

Twittering the Billable Hour

Why am I on Twitter? The family have stopped asking, and just accept that although I long ago got rid of my BlackBerry and obsession with emails, this has been replaced by an equally worrying (to them) interest in Web 2.0: Twitter, FourSquare, Spotify, Feedly ~ to say nothing of FB and LinkedIn.

It is always easy to justify one’s peculiarities (not least as to you they are not peculiar at all) but lately I have been giving some thought as to whether Twitter is really of any value, other than to boast about my homegrown asparagus. I am quite sure that it is. For me its value lies in the links I find. These may be to legal or management articles or blog posts, be about current affairs, or, very close to my heart, bird sightings. And all delivered (usually with a little help from bit.ly) in 140 characters.

The result is that I have access to an enormous range of thought.

A very good example was a tweet by Patrick Lamb (@ValoremLamb) yesterday, which took me to the Law Society of Western Australia’s website – and ultimately allowed me to download The Chief Justice of Western Australia’s address to the Perth Press Club, “Billable Hours – past their use by date”, given on 17 May to launch Law Week 2010. It is an excellent analysis, given, as the Chief Justice admits, “with a view to stimulating interest and debate, which may in turn accelerate changes which are already evident in some parts of the profession”.

You need to read the speech for yourselves (it’s a pdf on the website). It is pretty even-handed (what would you expect from a lawyer?) and he sets out both the advantages and the disadvantages, which will be familiar to most lawyers here and there. But one particular paragraph caught my eye:

Focuses on hours, not value

Time costing focuses the efforts of the legal practitioner upon the production of billable hours, rather than the production of value for the client. It rewards efforts and not results, promotes quantity over quality, repetition over creativity.

There is quite a lot more like that, but even though the Chief Justice accepts that “time billing has a place in legal service charging” he is quite clear that there are other methods “which encourage efficiency and better allocate risk”.

Not waving but drowning

Train journeys offer an excellent opportunity to catch up on reading, both professional and management. Travelling to London recently, I re-read Rob Millard’s The Strategy Executioner (you will find it in Edge International September 2008 Law Firm Strategy Newsletter).

Millard sets out ten easy steps to ensure your firm’s strategy never sees the light of day; number seven particularly caught my eye,

7.  REWARD PEOPLE ONLY FOR PRODUCTION

The successful strategy executioner pays no heed to ridiculous ‘balanced scorecard’ approaches to performance measurement and reward. They keep the focus squarely on production and only production. Measure and reward billable hours only! That way, people are discouraged from poking their noses into areas where they don’t belong. If anybody asks about strategy, smile and wave and tell them that their own interests would be better served by simply working harder. An added bonus is that this approach tends to maximize short-term profit, which your partners will appreciate when they make their drawings. As to the long term: leave that up to the poor idiot who comes after you!

So now you know.

Yet more on the billable hour

More posts in the world of blawgs, particularly Never mind the billables by  Jordan Furlong in Law 21, following the article Killable hour in the latest Economist. Regular readers of this blog will know that selling time is one of my pet hates.

Furlong puts it very well in his post,

Your client doesn’t care how much profit you make for yourself; the client only cares that you delivered excellent value in a cost-effective (to the client) manner. How you bill your services is between you and your client; how much it costs you to deliver those services has to be your number-one business priority.

Selling time is the antithesis of selling value. Read Stefan Stern’s article Focus on value or pay the price in the FT (now some three months old). I liked his closing paragraph,

But for most businesses protecting margins in the next few months is going to prove extremely difficult. Cynics, Oscar Wilde once said, know “the price of everything but the value of nothing”. You know things are tough when the cynics don’t know the price either.

Delivering value

If Nick Jarrett-Kerr is right that the current downturn in work has removed the last excuse for partners avoiding to engage in valuable non-chargeable work (see his article in Kerma Partners Quarterly 2/08 and my earlier post Spending time wisely), then high on our list of things to look at is how to resolve the problem of a business model based primarily on selling time.

Although his post The new brand landscape for law firms in Law 21 is primarily aimed at law firm rebranding rights and wrongs, and is very well worth reading for that, Jordan Furlong also touches on billing and branding,

Today, brand opportunities are opening up everywhere — not primarily in new industries or practice areas, although there are a few of those, but in how a firm delivers value to its clients. Service delivery, billing parameters, value definition, client communications, risk sharing — these and many other key elements of customer relationships, which have lain dormant and ignored for years, are coming to sudden life.

Take the oldest complaint in the book — the billable hour system — as an example. Clients have moaned for decades about how the billable hour removes the burdens of accountability and risk from the lawyer (though clients share some of the blame for not pushing harder), and conventional wisdom called the billable hour unkillable.

But now there are firms that have successfully staked out this ground and branded themselves as having abandoned the billable hour altogether.