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.