Nowhere is reliance on the billable hour more evident than in the legal profession, where national averages place requirements for many attorneys at approximately 1,800 hours per year. According to a Yale Law School study, attorneys can reach that milestone by following fairly simple formulas that fail, however, to address the demanding nature of the profession. Rationale behind current law firm thinking on billable hours: The more of them you bill, the more money comes in the door.
A recent Pittsburgh Post-Gazette article points out “when billable time became the standard in the 1950s, the American Bar Association suggested 1,300 yearly billable hours – six per weekday, plus a half day Saturdays – was a reasonable goal for full-time employees.” If we are to believe the most recent data, that number jumped to nearly eight hours per day in 2012.
I would argue that such a strict adherence to a defined number of billable hours is unhealthy both for the organization and the attorneys themselves. More hours spent billing doesn’t always equal better results.
The best example I’ve found to support this assertion comes from a recent piece written for the American Bar Association by Michael Roster, who is former managing partner of Morrison & Foerster’s Los Angeles office and former general counsel of Stanford University, among other previous roles. Roster argues that law firms should be selling expertise and skill, not hours.
“Hours are a unit of production, and as with manufacturing, it should be everyone’s goal to reduce that cost of production while improving quality, outcomes and yes, profitability,” Roster writes. “By irrevocably linking a law firm’s profitability to increasing the cost of production, the formula has turned everyone in the wrong direction. Under the formula, profitability is enhanced with inefficiency and reduced if there is a focused use of expertise.”
Roster believes profitability could stem from factors such as moving work to appropriate firm experts, which can shift the focus away from hours billed as a cost of production and instead to how firms can better maximize what can be billed. Attorneys are then rewarded for delivering better outcomes.
At WordWrite Communications, we mirror many law, accounting and other professional services organizations in the way we track our time. PR agencies are tied to the billable hour. At the end of each day (ideally), we document the activity we did for our clients. 
While we see billable hour activity per month as one measure of our work for clients, it is not the measure. Almost all our clients are on retainers. We guarantee them a certain number of hours of work per month or per project, but they are not charged extra if we spend more hours than mandated. In our experience, additional activity for the sake of additional activity doesn’t necessarily equal more achievement or better outcomes.
At law firms, the increasing demand for profits has certainly elevated the amount of time attorneys spend billing their clients. Make no mistake: Law firms and their professional service peers are for-profit and making money is essential. However, it’s possible that the emphasis on billable time is undermining a law firm’s ability to improve its thought leadership and distinguish itself from the competition. It might be just as important to attract and maintain top lawyers in a work environment that’s different from the firm around the block. It’s also better for the clients, as Roster argues, if their matters are more efficiently and effectively processed by the right expert at the firm, instead of whoever is simply next in line within the most appropriate practice group.
Certainly, these are difficult issues with no easy answers. But they are also the types of discussions we are comfortable having as a trusted advisor when we seek to determine an organization’s true business purpose and help it define its place in the market.
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Jeremy Church is an account supervisor for WordWrite Communications. He can be reached at jeremy.church@wordwritepr.com and on Twitter @churchjeremy.
