The billable hour trap

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Published on 5/19/08

In a recent column, Jeff Bleich, president of the State Bar of California, raised the specter of the "billable hour trap." He maintains that the profession must change its fee structure and move away from the current policy of billing by time. In so doing, he reflects the thinking of many lawyers who are feeling the pressure of working long hours.

But is the billable hour truly a trap? Or is the desire for economic rewards in a society whose cost of living continues to increase the real trap?

Lawyers, like all other participants in the economy, want to earn a "reasonable" living. In fact, if asked, most lawyers would admit they would like to earn as much as possible. And as I've written in this column before, there is no ethical requirement that client problems must be resolved as cheaply as possible.

A lawyer's fee, whether expressed in billable hours or some other measure, must only be "reasonable" for the value provided. And that is a matter of agreement between lawyer and client. Otherwise, there is no requirement that legal work be outsourced, either to India or to another law firm down the street with less overhead and a lower fee structure.

Lawyers work hard, though not necessarily harder than other people. The thought of 2,000 or 2,500 or more billable hours is one indication of workload. But in this instance, the billable hour is only a method of accounting; it is not the reason we work long hours.

We work long hours because we love what we do; we love helping people; we tend to be "perfectionists"; and we want to earn more money to better take care of our loved ones.

Billable hours merely provide a method of accountability for those clients who may not see the value of what we do. If clients, in fact, do not understand our value, then we have failed to properly communicate with them, and we have failed to understand our client.

If we use a different method of accounting, such as value billing or fixed fees, and do not help the client understand why, they will still not understand what we do, why we do it and how we helped them. The consequences oftentimes will be that they will procrastinate or refuse altogether to pay our bills. We still will continue to work long hours because we want to do more and earn more, unrelated to the method of billing our services.

Lawyers wanting to do better for themselves drive much of what lawyers do, even as they strive to do the best that they can for their clients. So it is likely that attorneys will change their billing approach only when they understand how it will benefit them.

Escaping the billable hour trap will not be the motivator, although it may be the sales pitch used to attract more lawyers to a different method of billing.

Remember the airline mantra: Put your oxygen mask on first and then attend to your children. What's in it for you, not what's in it for the client, will drive this machine.

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