We’ve become Zombies to the Billable Hour.

by Tony Wilson

I’m tired of trying to figure out if a telephone call was a “point 1” or a “point 2,” and whether confirming an appointment, or advice given over lunch is recordable. I’m tired of trying to figure out how to bill the $8,000 my competitors are charging for an agreement that, due to my own efficiencies and experience, might only take $2,000 in time to produce. And I’m fed up with having to deal with $13,000 worth of Work-In-Progress that the client is only prepared to pay $6,000 for. I. Hate. Billable. Hours.

I asked someone at my old exploded firm 24 years ago “Is thinking about a file during the shower recordable?” “Yes,” I was told. “Write it down, when you’re dry.” “What about during sex?” I asked, quite sarcastically. “Write it down when you’re dry.” A Seattle lawyer told me 20 years ago that all lawyers at his firm were instructed to record their time in the bathroom as “Boeing Time;” Boeing being the firm’s biggest client. The quest for billable hours is so endemic in practice, it leads us to docket all sorts of things we’d never expect to pay for if we were paying the legal bills ourselves.

When I speak to young lawyers at other firms about the practice of law, they always speak dazzlingly about the number of hours they have to put in, as opposed to the dollars that those hours represent, as if the hours were an end unto themselves. They aren’t dollars, as many defunct U.S. law firms discovered over the past year. They’re something else, like derivatives, credit swaps, hedge funds and other forms of securitization that might turn into dollars or might not. Billable hours are like smoke, wafting in the air. Whether the quota is 1600 hours or 2000 hours, using billable hours as a measure of performance is like the kid being more interested in the box than the Christmas gift.

Face it, we’re addicted to billable hours the same way junkies are addicted to drugs, or the western world is addicted to oil. Sometimes, I wonder if we’re all Zombies and the quest for the billable hours has created this Billable Hour Zombieland we all work in.

I say we dispense with the billable hour altogether and start basing our billing practices on the billable word. It’s not tied to time, so, we might be more efficient. It’s tied to something of value that actually relates to the work that’s produced.

Perhaps solicitors will finally have a leg up on their litigation brethren because the litigators, despite working weekends and evenings, can be chastised at partner’s meetings for not being up to their “billable word quota.”

Value billing is hard enough to justify to clients in the current billable hour regime, (especially after the Inmet Mining case), but it would be quite straightforward in a billable word model; simply value the nouns, verbs and adjectives differently. In fact, differential rates might become the standard, so that nouns, verbs, adverbs and adjectives have a higher value than mere prepositions.

There would never be a discussion with a client accusing the lawyer of “padding time” or taking too long on a project because time will be up to the lawyer. The only billing issue the client could conceivably complain about would be whether the job took too many words. “Well, what words would you have omitted?” strikes me as an easier sell. And in any billing dispute with a client, you can always agree to not charge for certain words to reduce the account and make the client happy. “OK… we’ll deduct all the prepositions; and the four uses of the word “narly!”

Mind you, it won’t take the London, New York and Toronto firms very long to see the real value of the billable word model: the billable syllable! The billable letter! The billable punctuation mark! And my favourite; the billable space!

Wacky, yes. But is it any wackier than the billing model we currently use?

Vancouver Franchise Lawyer Tony Wilson practices at Boughton Law Corporation in Vancouver, and has written for the Globe and Mail, Macleans Magazine and Canadian Lawyer. twilson@boughton.ca | www.boughton.ca/people/lawyers/tony_wilson

This article was published in the December 2009 issue of BarTalk. © 2009 The Canadian Bar Association. All rights reserved.