‘Do and charge’ is an incredibly easy way to get paid. Start the clock, record your time, multiply by your rate and you’re done (more or less). With time being so easy to measure and ‘productivity’, ‘output’, ‘outcomes’, ‘value’ etc. being so hard to quantify, it’s no wonder the billable hour is the default option in most law and other professional services firms.
At ConMoto, we do use the billable hour, but we work hard to ensure it’s only ever one tool in the kit. We’ve developed two rules about the billable hour that we think form a really important part of our culture:
- for our clients, charging by the hour should not be the default option when pricing (but it should still be an option); and
- for our staff, the billable hour should never ever be allowed to become a measure of worth of any person (both amongst the lawyers and between lawyers and other staff members).
Rather than list all the ways we think this approach has resulted in a better working environment, we asked our staff about their experiences working at ConMoto Group compared with billing at traditional law firms:
As somebody who worked previously in big firms overseas and in Australia, it was liberating when I was finally able to ditch the billable hour as an internal performance metric. It enables me and our other lawyers to focus on the quality of the work we provide and incentivises other, more important behaviours, including efficiency and responsiveness to clients’ needs. It also means we can stop looking over our shoulders and wondering what other lawyers in the team might be billing and just concentrate on being the best at what we do, both individually and as a team.
After having only known the billable hour prior to joining ConMoto, I was skeptical to see how this model worked – both from a client and firm perspective. Having now experienced it first hand, I can see that ConMoto’s approach is far superior – it shifts the focus from merely racing to the finish line to doing the best job for clients.
Starting my career as a lawyer without the burden of billable hours has been instrumental to my growth and overall job satisfaction as I have the flexibility to focus on the quality of my work and understanding without the burden of unrealistic billable targets. I genuinely feel supported and welcome to ask for help from my colleagues.
The 6 minute unit (x hours in a day x days in a year) as the only KPI for lawyers is at the core of all things wrong with law firms. It drives poor behaviours like over charging and unhealthy internal competition and discourages teamwork, delegation, collaboration and efficiency. It’s a lazy metric and a short term only plan for motivating people. I often get asked how we make it work without this metric and the answer is we talk to each other. We focus on keeping people engaged and motivated and we hire great people that we trust to do a great job.
The main problem with the billable hour in law firms is that it puts too much focus on one metric (time) to measure and reward individuals. This creates the wrong incentives. Our priority is always team performance and focusing on getting the job done. By monitoring overall team performance you start to see better collaboration, productivity and a genuine team culture.
I miss the old days of lying awake at 3am, wondering how I’m going to hit my target and/or justify the two non-chargeable hours I spent helping a colleague navigate the photocopier the day before. Not.
Especially as a junior lawyer who is just starting out, not having to worry about billables and budgets means that I am able to focus on my learning and development as a lawyer. It gives me space to think about how to approach my work efficiently, and to develop good habits.
Ditching the billable hour means I can take the time to get to the bottom of an issue for a client; I have the capacity to consider an issue’s broader impacts on my client’s business, and its interaction with related matters. It also enables me to properly support the development of our newer lawyers; I can actually review their work, provide suggestions and give them the space to learn without the ever present clock over our shoulder.
If you’re reading this, you probably hate billable hours. No one likes to be the person wincing to pick up the phone thinking about being charged for every six minutes (yes I am genuinely interested in your weekend!), and no one likes to be the lawyer that is judged merely for the time they spent behind a computer or in a meeting. We like to explore other ways to price to ensure that we can deliver legal services that you’ll really value.
What you measure matters and I think “What are we optimising for?” is such an important question. I’m personally driven by trying to incrementally improve our processes over time and a model that rewards time spent is inconsistent with that. I’ve also experienced the traditional model in other firms and the flow-on consequences of it – a healthy work life just doesn’t seem able to flourish there. I get it, I understand why it exists. I just want us to do better.
