Billing…the sword of Damocles

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One lawyer noted that billing is an obvious ethical flag, with another lawyer having heard stories of lawyers who adjust their billing clock because a fellow lawyer is doing better reaching their targets. 

One key theme arising from my commercial research was the pressure and struggle that lawyers in private practice face to reach their billable targets.  All of them billed in six minute units, providing an insight into the demands placed on them in an incredibly competitive environment to meet the firm’s profit line.  One lawyer admitted that the six minute unit concept can consume you to a certain extent, and you have to be organised.  Another lawyer indicated that you have to manage the ebbs and flows, where you have some days where you work 15 hours in a day and have an abundance of billables, but some days you scrape the barrel to get only a minimum of billables. 

One lawyer in a large firm found it quite stressful because of the lack of available billable work, the distribution of which was controlled by the supervising partner.  The thought of this lawyer being directed to achieve seven billable hours a day (which in itself is very demanding under the best of circumstances) was near impossible given one or two hours billable hours per day was the best that could be achieved.  The distress was further compounded by the dreaded “performance review” by which lawyers live or die by to determine whether they’ve reached their billable targets.  Another lawyer saw graduate colleagues have their “food line cut off” if the supervising partner for whatever reason did not like them, and the embattled lawyers become “performance managed” – basically encouraged to leave.

What also came out in the research was the potential ethical lapses arising from the sheer competitiveness to bill.  One lawyer noted that billing is an obvious ethical flag, with another lawyer having heard stories of lawyers who adjust their billing clock because a fellow lawyer is doing better reaching their targets.  A junior lawyer reflected on the firm’s culture where the competition to secure a lucrative billable file unfortunately impacts on the firm’s culture and their ability to do community engagement on behalf of the firm.

My experience with billing in six minute units made me recognise the adverse impact it has on clients and their ability to make full disclosure of the facts.  I’ll never forget a client who came in to have a will drafted, and during our meeting she hesitated to pop out of the office for a minute to obtain an important document in her car.  I’m no psychologist but immediately I recognised from her anguished and distressed look that she thought I would bill her for the time spent simply walking to the car park to retrieve the document.  I reassured her I wouldn’t bill her for the time she took to obtain the document from her car, and it’s not surprising she felt that way given there have been a tradition of well-publicised cases (thankfully isolated) of lawyers billing their client for reading a thank you e-card for instance.  In some ways I think the six minute role raises greater risks for a lawyer’s ability to fulfil their duty of care to the client.

I also have experience working in a firm where billing was mostly done on a fixed amount basis.  I found this encouraged fuller disclosure by clients and ensured they weren’t always checking their watch if they were on the phone to me or writing a long email.  Each method of billing has its pros and cons and really depends upon the clientele.  My humble opinion is that the six minute unit billing is more suited to corporate clients (although I’m sure their bean counters understandably want to ensure they get value for money for legal services) and the fixed amount basis is more embraced by the general public for whom seeing a lawyer is the exception rather than the rule and on par with visiting the dentist.

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Updated:  10 August 2015/Responsible Officer:  Director, GDLP/Page Contact:  Program Coordinator, GDLP