84.2 percent of attorneys that participated in an informal study conducted by the ABA Journal in November 2006 would be willing to earn less money in exchange for lower billable hour requirements. The findings were reported in a recent article in the ABA Journal e-Report (and also in the February edition of the ABA Journal).
According to the article, many law firm partners and outside consultants say that lowering billable hour requirements is a bad idea. The article cites one consultant who opines that although lawyers say they want to cut back on hours, the 'real trade-off' is being a 'kind of so-so lawyer.'
It's mind-boggling that so many lawyers, (and many of the consultants who advise them) still assume that in order to be an excellent lawyer, you have to work a ridiculous number of hours. The number of hours you bill doesn't determine how good a lawyer you are, and it certainly doesn't have any direct correlation to whether you provide your clients with excellent service or not.
Another consultant quoted in the article claims that law firms are 'struggling with the long-term effects of associates not wanting to work as hard.' He goes on to say that, 'incremental additional hours are where law firms make a profit, which is why billable hour requirements shouldn't be lowered.'
While it may be true that many firms' profits come from 'incremental additional hours,' it doesn't necessarily follow that billable hour requirements shouldn't be lowered. It also doesn't necessarily follow that associates don't want to work hard just because they want lower billable hour requirements.
Working 'hard' and high billable hours aren't necessarily synonymous. And billing lots of hours isn't always the best way to be profitable. Just because some firms can only see one way to increase their profits - by keeping billable hours high - doesn't mean that there aren't other and better ways to increase profits.
Are the profits from incremental hours really profits if the firm is losing qualified associates? Are the profits worth it if the clients aren't getting the best service, or are scrutinizing every bill because they fear bill padding? Are they worth it if the associates grinding out the work aren't taught how to build relationships with clients? Are they worth it if the firm ultimately folds because no new business is coming in? Are they worth it if many of those hours are ultimately cut, written down, written off or counterbalanced by the time, effort and expense of trying to collect on those hours?
One alleged 'concern' expressed in the article is that if a firm lowered its billable hour requirements, clients might perceive the firm as being less responsive to the client's needs. How many law firms tell their clients what their billable hour requirements are? How many clients care? Most likely, very few. Clients care about whether their needs are getting met. Just because a firm lowers its billable hour requirements doesn't mean the firm is automatically going to be less responsive, or that attorneys won't be available for clients when the clients need them.
The article itself quotes in-house counsel who confirmed that clients don't know or care about billable hour requirements as long as they're getting good service. These in-house lawyers also expressed concern about bill-padding to meet billable hour requirements, and getting billed for "stuff" that wouldn't otherwise be billed if the billable hour targets weren't so stringent.
One in-house lawyer noted that lowered billable hour requirements would only concern him if talented associates were leaving the firm in search of higher salaries. Firms should pay attention and should take care of talented associates because clients care about talented associates.
The climate among talented associates reveals that those associates are more likely to leave firms in search of lower billable hour requirements and lower salaries than they are to leave firms in search of higher salaries. Firms need to compensate their highly qualified attorneys that do excellent work and serve their clients well. The number of hours they bill isn't necessarily a good indicator of either.
Unfortunately, many firms don't seem to know who their talented associates are, apart from their billable hours. This is even more mind-boggling. One of the lawyers quoted in the article opined that, "It is hard for firms to gauge who is really good and who is committed without measuring it." The same lawyer goes on to say that the lawyers that bill more than 2000 hours a year will always be considered to be more worthy of partnership, even if billable hour requirements are lowered overall.
If the only way firms are determining which associates are talented, committed or worthy of being considered for partnership is by counting up their billable hours, these firms are woefully uninformed about what's really going on within their firms. And they may very well be headed for trouble. The best billers don't automatically make the best partners. Associates with 'lower' billable hours are sometimes the most valuable additions to the firm because of their integrity, innovation, creativity, skills and relationships with clients and potential clients.
The number of hours billed, or the number of hours spent on a particular task is not an accurate gauge of a lawyer's competence, skill or talent. And billable hours themselves have no bearing whatsoever on whether the lawyer is meeting or exceeding the needs of the client. Not to mention that the number of hours billed bears no relationship to the value of the service provided to the client.
Why do these lawyers and consultants assume that lowering the billable hour requirement necessarily means associates won't work 'as hard?' Do hard work and the number of hours billed always reflect one another? Is it ‘harder’ to complete the task efficiently and effectively, to innovate and come up with creative solutions to clients’ problems, or is it harder to procrastinate, waste time, perform unnecessary work, and use the same tired, outdated methods? Is it harder to get to know the individual client well to provide for their specific needs, or is it harder to apply the same solution to every client?
Some of the hardest working associates and most valuable associates I’ve encountered aren't the highest billers in their firms. And many of the biggest 'rainmakers,' who build, cultivate, and cement relationships with clients do so at the 'expense' of billable hours. But without those client relationships, the firm could make no profit at all.
Misconceptions and misguided notions of what is valuable to a client, what really creates profits and what motivates lawyers to work hard and strive for partnership within a firm prevent many lawyers and law firms from reaching their potential. And the 'almighty billable hour' is one of the problems.
Young lawyers are the future of the profession. Firms that want to continue to thrive into the future should listen to what associates are saying about their law firm experience, instead of continuing to throw money at the problem by increasing associate salaries and enforcing impossible billable hour standards.