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.