3 Aspects of Billable Hours that Associates Should Know

Summary: What is the most damaging aspect of law firm life for associates? The billable hour.
 

• The billable hour is used not just to track client charges for the legal services they’ve received, but to also track how much work an associate performs on that client’s behalf.
• But do your associates truly understand that and how billable hours can affect them in the long run?
• If not, keep reading to find out the 3 aspects every legal associate should know about billable hours.

 
Every job in every field has a way of keeping track of those who work in those fields.

Whether that tracking is done with a time clock, sales goals, distances driven, or deliveries made, the differences in how this tracking is done all come to the same conclusion of recording production.

In law firms, production is monitored with the billable hour. This is particularly true with associates.

Associates record billable hours to reflect the amount of work they’ve performed on a client’s legal case.
 
Needless to say, the billable hour is a commonly reviled measure. Clients hate billable hours because, of course, billable hours signify how much they owe the attorneys who have worked on their cases.

With that noted, many clients as well as lawyers have long since claimed the billable hour should go the way of the dinosaur and become extinct.

But the billable hour is going nowhere soon. To the contrary, the billable hour is expected to be with us for a very long time onward into the future.

In fact, according to an article that appears on The Young Lawyer Editorial Board, there’s no real reason for the billable hour to fade off into the sunset.

This is true because when used appropriately, the billable hour standards can set clear expectations for lawyers and supply a dose of objectivity to measuring their contributions, ensuring that comparable work receives comparable reward.

A lawyer, for example, who has had an extraordinarily busy period of firm or client work should be recognized and compensated accordingly among those who produce less work.

There are pitfalls, of course, and the 3 most prevalent pitfalls have been found to be rife throughout the legal profession, making them perfect examples of how billable hour requirements have gone bad, especially for associate lawyers.
 

1. A Lack of Communication as to What a Billable Hour Is

 
Some law firms actually publish their billable hours requirement, that then evolves to a de facto set of often much higher hourly expectations to advance or demonstrate commitment.

The problem with this is billable hours and their function are often not clearly communicated within many law firms, particularly to new associates. This can result in a firm teeming with discontented employees who feel bait-and-switched into striving to meet obligations exceeding what they were led to anticipate.

From that point forward, it does not take long for such a law firm to build a reputation as a sweatshop.

Furthermore, achieving high billable hours does not necessarily equate to efficiency or quality work or even acceptable realization rates especially among your associates.

Another negative is the billable hour framework often rewards attorneys who are inefficient at the expense of their more efficient counterparts. This result is bad for lawyers, law firms, the legal profession in general and its clients.
 

2. Billable Hours Can Lead to Imminent Stress

 
Measuring employee performance based on hours billed has a way of transmitting a great deal of stress to attorneys, which can contribute as a whole to a high-stress work environment.

The Young Lawyer Editorial Board compares this to Sisyphus endlessly pushing a rock up a hill in which the need to meet high hourly requirements manifest in an attorney’s reluctance to take vacations, to continuously feel an obligation to work nights, weekends and holidays, all of which can result in crucial mental health issues.

Of course, once hourly requirements are combined with a competitive environment in which employees try to outdo one another, the mixture can quickly become poisonous.

The old adage then returns in which law firm life is compared to a pie-eating contest where the winner gets more pie.

Further exacerbating the issue is that this is a profession where lawyers must often work until the project or particular job is done; as a result, many lawyers will often refuse to leave tasks unfinished, even for short periods of time. What occurs next is most likely attorney burnout.

At that point retention and work quality suffer, which ultimately lead to the pervasive mental health problems many lawyers struggle with.

The silver lining in this stems from the fact that these problems that can accompany billable hour requirements are tractable and avoidable through transparency.
 

3. Transparency Can Be the Knight in Shining Armor when it Comes to Billable Hours

 
Transparency is an indispensable baseline to making the billable hour work well. This means law firms must be clear about expectations—realistic expectations that is.

And, those expectations need to be stated up front. Better yet, they should be provided with current and historical statistics such as average hours worked per lawyer per week, month and year, by office location, department and seniority.

In the absence of firms standing by publicized expectations which may or may not be true or accurate, this data can provide a window into any divergence between stated requirements and billable hour reality.

Prospective hires have a role to play as well as they should be asking concrete questions about expected workload and hours, and with that, demanding concrete answers.

Law firm representatives who field these questions should answer them candidly. Only then can law firm partners and managers, as well as overworked associates enjoy the benefits of increased transparency—including happier lawyers, better law firm working environments and ultimately, more satisfied clients.
 
Conclusion

Transparency alone won’t solve the issue of attorney burnout or prevent the development of mental health ­impairments or substance abuse issues that derive from unsustainable hours within the legal profession.

Legal jobs, including those in Big Law firms, require a significant amount of time, energy and effort from lawyers.

However, the issues with overtaxed lawyers cannot begin to be solved if the profession as a whole is not willing to be honest and candid about the expectations and standards that lawyers are held to.

Simply put, it is not fair to lawyers or legal organizations to have a stated minimum billable requirement of 1,900 hours and communicate that minimum number as if it were the expectation, if, in reality, the functional expectation is much higher.

There are a number of other measures that can be undertaken to provide flexibility to attorneys. While legal organizations have moved to provide more flexible parental leave policies in recent years, more flexible schedules could be implemented on a broader basis for attorneys that are trying to achieve additional balance in their schedules for a variety of reasons.

After all, the legal profession is a service industry, which means that lawyers are often on call at all hours of the day and night. But even with that age-old reveal, there is no reason that the legal industry cannot adapt to part-time lawyer schedules in the same way that virtually every other industry has done.

To that end, legal organizations should implement better methods of valuing non-billable, firm citizenship time. Every legal organization requires a significant number of administrative tasks, including internal meetings, marketing meetings, recruiting meetings, client development, mentoring, etc.

While law firms often have some non-billable billing number that attorneys can “bill” this time to, this time does not usually count toward the minimum billable number, and attorneys are required to “make up” those hours on evenings, weekends or holidays.

In an industry where the most efficient attorneys bill only 75% or 80% of their time, this amounts to hundreds of extra hours per year. This discrepancy can particularly impact women and minority attorneys, who will often bear heavier burdens on administrative tasks.

In short, when it comes to billable hour requirements, law firms must increase their transparency, set realistic expectations, and apply fair standards to measure all hours worked.

In the end this will lead to happier lawyers, better retention rates, more satisfied clients and a better measure of the true contributions that employees make to their firms.