Billable hours pressure on employed lawyers

Hardly a day goes by that we don't read something on the alleged pressure of their billable hours targets on employed lawyers.

Isn't it ironic that in fact survey statistics consistently demonstrate the billable targets in the vast majority of firms in Australasia aren't all that high on average, and yet are seldom met!

On 25 June 2013 I posted Retaining Good Legal Professional Staff Explained...

I made clear in that post that an important element of having the financial resources to consistently pay really attractive remuneration is to get your employees producing the necessary funds themselves from proper use of their average working day.

In many cases law firm owners and managers are to blame for the stress some employed lawyers suffer from, but it's not normally from demanding too many billable hours per se.

Where they are to blame is for not organising the proper marketing of their firm to match fully with the structure of the firm from time to time...for not managing well enough, in concert with their employees, for each of them to have a healthy backlog of client work.

In most cases the stress for employed lawyers comes from not having enough legal work to do to meet even otherwise perfectly reasonable targets.

One regular consequence is that some employees spend far too long on client files where it is not justified. Hopefully the firm will in due course realise this, and not try to charge the client an unreasonable amount as a result.

Alternatively, the client had been quoted a fixed or capped fee, and the firm will need to accept that the time spent cannot be fully recouped anyway.

The outcome for the firm is that yet again investment in running the firm does not find its way into the proper volume of revenues, and profit is again deeply cut into.

Knowing what your employees are doing with all the labour you have purchased from them in any given period is vital to understanding if you have significant hidden capacity that is being wasted.

My informed guess is that there are fewer than 5% of all firms that are not wasting enough potential profit to bother worrying about getting serious about sorting it out.

As margins in most firms have been hit by both the GFC and changes in clients attitudes to legal fees there will be a lot more than 95% of firms needing to learn how to run a much tighter ship without introducing (or making worse) a culture that is undesirable.

More Billable hours/Working Hours Myths

With continuing pressure on law firm profitability, exacerbated by the GFC, there’s plenty of discussion of lawyer productivity.

Despite the volume of talk, productivity in this context is by no means a simple concept, and perhaps this is behind the tendency for the discussion in law firms to far too often reduce itself to a discussion about billing levels and very little more.

I started a discussion on my LinkedIn discussion group last week about perceived stress in employed lawyers. Excellent Management

During the week I had cause to again read a publication available from NSW Young Lawyers, “How To Survive and Thrive in Your First Year of Law”, and while there is plenty of good material in it, I noted a couple of points that seemed unreasonably out of touch in 2013, and perhaps adding to the stress of some!

The authors opined that, “You should be prepared to work up to 60 hours a week as a lawyer in private practice”, and, “To achieve a billable target of seven hours it is likely that you will be in the office for about nine or ten hours a day”.

By comparison, in fact in the current environment the vast majority of WorkPlans I prepare for young employed lawyers involve weekly work hours of less than 40. Today I attached a draft WorkPlan to a Contract of Employment for a Senior Associate in a small firm with minimum hours of 37.5/week.

Individual expectations by me of their investment in FirmTime vary enormously.

However if an individual lawyer with an 8-hour a day requirement, net of all breaks, had a WorkPlan FirmTime allocation of 1 hour a day, and consequently a ClientTime allocation of 7 hours a day, I would expect that work on client files to be done for 7 hours a day on average.

The total amount of time worked for the firm, whether in the office, in Court, at clients’ premises, working from home or elsewhere, would be 8 hours, and not some exorbitant higher number like the, “9 or 10”, in the Young Lawyers’ publication.

It seems to me that if we are serious about ensuring unreasonable stress does not run riot in our employed lawyers we need to do a lot more than trot out time-worn myths.

We need to be clear about our expectations, provide enough work, and provide good training in improving their efficiency and “productivity”. We also need to give regular quality feedback.

In my experience employed lawyers benefiting from this approach tend to be light years ahead of their less fortunate peers in real productivity, and as a result tend to progress more quickly in their careers and in remuneration growth.