Alternative Billing Practices Beyond the Billable Hour
When I speak to individuals or members of organizations who utilize legal services, the two biggest concerns I hear are “Our legal counsel charges us every time we talk to them on the phone,” and “We can’t believe how much they charge for Xerox copies or mailing services.” This refrain reflects an existing and potentially damaging perception about how lawyers choose to bill their work.
Few services outside of law or accounting charge for time when the professional is not actively engaged in the actual work necessary to complete the job. Most routine activities that are part of doing business are not part of fees. Over the years businesses and individuals have both become more sensitive to attorney billing. Legal audit firms have sprung up as a result of these concerns, and almost all lawyers in private practice have become increasingly sensitized to providing clients with detailed billing.
When associate salaries spiked a few years ago in response to the dotcom boom, billable hour expectations increased commensurately. At the same time, graduating law students were lured to law firms under the public relations umbrella of ‘quality of life.’ Rising salaries, increased billable hour requirements, and quality of life was a formula that simply didn’t add up. The result—both sides failed to meet expectations and everyone paid the price.
A practice based upon billable hours is one that insures an income cap. No one can bill twenty-four hours a day. Few clients want to be the last two hours billed on a fourteen- hour day. In spite of how some people behave, human capacity for work is, in fact, limited.
It is time for lawyers to think of new approaches to billing for services that will benefit both themselves and their clients.