The Vanishing Billable Hour: Bane or Boon? Forum

[yossarian]

Many cite the shift from billables to flat fees as a source of the decline in overall revenue for law firms and the overworking of associates. This makes sense in the short run.

But, isn't the billable hour part what makes lawyers work so much in the first place--especially 10+ years into the career. In the long run, could a vanishing billable hour contribute to better work life balance?

Mods: I didn't know where to post this. General discussion about the future of the legal market, not really a specific question for law grads. Employment thread might be a little better suited? But, I'm a 0L. Didn't really seem to be an off-topic.

[englawyer]

i don't think a better work life balance is in the cards. in the end, profit = revenue - cost.

Associates are a fixed cost, so there is a strong incentive for the partners to work associates to the limit. Associates will take it because they either are trying to make partner themselves and/or fear getting replaced by the new crop of associates that join next year.

Partners will also still want to put in long hours. The more matters, the better. If they can plausibly take on work and the opportunity comes along, they will do so. Good partners have no shortage of work so it is unlikely that they will end up working less hours.

What will probably change is efficiency. There would be strong incentives for both partners and associates to be as efficient as possible, which is the opposite of the billable hour model. Attorneys will negotiate stuff like the scope of discovery (number of custodians, keywords, etc) much more vigorously as any higher costs will eat into the firm's profits rather than the client's pocketbook.

[Theopliske8711]

They will just hire fewer associates and have those do a lot more billing. Less work for the firm =/ less work for you.

[kalvano]

You still have to bill hours to the matter to be deducted from the flat fee. It's just easier to enter time.

[yossarian]

Other service sectors without the billable model have better W/L balance tho. Thinking marketing. Which I know is drastically different than law in execution and operation, but the firms could pressure salaried associated for more work but they don't (as much as law anyway). Is this because it is necessary to attract/retain great employees because talent matters more? That is law is too rote a task for a single employee's retention to matter more to the firm's profits than hours worked.

That line of reasoning makes sense in the higher levels of marketing. But grunt copywriters/graphic artists aren't near as overworked as lawyers but theoretically could be as they are replaceable.

Also my experience in marketing is limited and more firms may bill more work hourly than I realize.

Follow up. Why are lawyers more overworked than other service industries whether work is billed hourly or not? Thinking accounting which has 8 months of pretty stable 50 hour weeks.

[Power_of_Facing]

Other service sectors without the billable model have better W/L balance tho. Thinking marketing. Which I know is drastically different than law in execution and operation, but the firms could pressure salaried associated for more work but they don't (as much as law anyway). Is this because it is necessary to attract/retain great employees because talent matters more? That is law is too rote a task for a single employee's retention to matter more to the firm's profits than hours worked.

That line of reasoning makes sense in the higher levels of marketing. But grunt copywriters/graphic artists aren't near as overworked as lawyers but theoretically could be as they are replaceable.

Also my experience in marketing is limited and more firms may bill more work hourly than I realize.

Follow up. Why are lawyers more overworked than other service industries whether work is billed hourly or not? Thinking accounting which has 8 months of pretty stable 50 hour weeks.

"Like every other advertising agency, the New Albion was constantly in search of of copywriters with a touch of imagination. It is a curious fact, but it is much easier to find competent draughtsmen than to find people who can think of slogans like 'Q.T. Sauce Keeps Hubby Smiling' and 'Kiddies clamour for their Breakfast Crisps.'" - George Orwell, Keep the Aspidistra Flying

[dabigchina]

Accounting firms have been at a fixed fee model forever. What winds up happening is you work just as many hours as before, but you bill for less that what you actually worked. We call this eating time and it makes making your chargable goals extremely difficult. If you choose not to eat your time like a good little associate the partner looks unprofitable. If this happens you can bet you will never be workin with that partner again.

[Princetonlaw68]

I asked this in another thread, but no one seems to be responding. For anyone who works in big law, how many hours a week do you tend to work? I've seen people in big law say as little as 60 and as much as 100. That seems like an overly wide disparity. How many hours should I expect to work per wk if I am able to work in big law?

[NYSprague]

I asked this in another thread but no one seems to be responding. For anyone who works in big law, how many hours a week do you tend to work? I've seen people in big law say as little as 60 and as much as 100. That seems like an overly wide disparity. How many hours should I expect to work per wk if I am able to work in big law?

I think that is a fair range. When it is busy, you have to work.

[AllTheLawz]

Other service sectors without the billable model have better W/L balance tho. Thinking marketing. Which I know is drastically different than law in execution and operation, but the firms could pressure salaried associated for more work but they don't (as much as law anyway). Is this because it is necessary to attract/retain great employees because talent matters more? That is law is too rote a task for a single employee's retention to matter more to the firm's profits than hours worked.

That line of reasoning makes sense in the higher levels of marketing. But grunt copywriters/graphic artists aren't near as overworked as lawyers but theoretically could be as they are replaceable.

Also my experience in marketing is limited and more firms may bill more work hourly than I realize.

Follow up. Why are lawyers more overworked than other service industries whether work is billed hourly or not? Thinking accounting which has 8 months of pretty stable 50 hour weeks.

Ehh most service sector jobs have terrible work-life balance, at least at the higher-end firms. If firms get rid of the billable hour it will just be replaced with some form of utilization rate (a common metric in consulting and other service industries). At the end of the day firms have revenue and cost targets. Whether you get there by billing by the hour or billing by the project is irrelevant for work-life balance determinations.

The given rationale for the billable hour is that much of legal work is unpredictable and therefore hard to package on a project basis. For a long time firms did little in the way of collecting data that could be used to sell legal services as a packaged product in a way that ensured a good price for both sides. This is changing, firms are utilizing billing data much better these days.

Unpredictability also plays into why firms keep lawyer headcount as law as they possibly can relative to the work they have (ensuring long hours and high utilization). Even most big law firms are relatively small businesses (less than $1B revenue) and their only assets are people and leases. In addition, they depend heavily on lines of credit and constant revenue streams. This means that the firm literally can't afford to take a loss in any given year. Higher lawyer count relative to work (without huge salary cuts) would ease work-life issues but would absolutely destroy utilization rates to the point of putting the firm at risk.

[kalvano]

I asked this in another thread, but no one seems to be responding. For anyone who works in big law, how many hours a week do you tend to work? I've seen people in big law say as little as 60 and as much as 100. That seems like an overly wide disparity. How many hours should I expect to work per wk if I am able to work in big law?

There is no set formula. Some weeks you'll work like 45-50 hours (rare) and others you may work 100. It varies by firm, practice group, and partner. There is no way to give an exact number.