Let’s talk about the billable hour webinar- LawCare

By Oluwaseun Fatudimu.

Reading time: three minutes

To raise awareness of mental health in the legal profession, LawCare, a mental health charity for the legal sector, organised a webinar called ‘Let’s talk about the billable hour’ on Thursday 16 May 2024. The virtual session, co-hosted by Lloyd Rees-chair and moderated by Niamh Warnock, demystified the merits and demerits of the billable hour in the legal sector by examining its impact on clientele, relationships, and legal employers.

The panel featured distinguished professionals including:

• Mark Blois, a Partner at Browne Jacobson;  
• Libby Clark, the COO at Bonacio and the former chairman of attorney wellbeing and;
• Polly Sweeney, a Partner at Rook Irwin Sweeney.

Understanding Billable Hours

Billable hours are the number of hours a lawyer spends working on projects for their clients. Clients pay for these hours; thus, it serves as a key metric for legal services. Law firms try to maximise the billable hour to enhance their profits. In other words, there is a direct correlation between the numbers of hours a firm bills and its profit.

The average billable hours for lawyers are influenced by the firm’s size, the lawyer’s level of experience and area of specialisation. However, generally, the average billable hour for a novice associate is between 1900-2,200 hours annually, as reported by CaretLegal. This translates to an average of 158 hours a month.

This means if an attorney works 40 hours a week for 52 weeks of the year—without any week off—they would work for 2,080 hours a year. Notwithstanding how hectic it sounds, it does not meet the average billable hours of some large firms. Consequently, it is one of the major factors affecting lawyers’ work/life balance and mental health.

Pros and Cons of Billable Hours

The panellists illuminated both the advantages and disadvantages of the billable hour model in the legal industry.

Pros

Firstly, tracking the time spent on projects helps lawyers figure how much to charge clients, thereby monitoring their profitability; this is called time recording. This is crucial because it ensures that firms remain vigilant, knowing when they need to increase their efforts and which tasks require more attention, among other factors. It also helps firms to track employees’ performance, understandeach team’s capacity and forecast annual revenue. With this, the firm can effectively track its finances. This undeniable significance is supported by AffinityLive’s report, which revealed that companies that don’t track billable hours usually lose up to $50,000 revenue annually.

Additionally, it is an effective way of increasing productivity. It encourages lawyers to manage their time effectively, prioritise tasks and deliver tangible results within a given timeframe. Thus, by motivating lawyers to work effectively and efficiently, billable hours can impact lawyers’ productivity.

Cons

The billable hour can result in incomplete or inaccurate task as lawyers tend to focus on time spent on work instead of quality of the work. Time recording encourages a focus on hour rather than value, rewards effort rather than results, and promotes quantity over quality.

The billable hour model also creates pressure to bill for more hours since more hours means increased profitability for firms. Firms set minimum targets for associates to meet, and lawyers whose billable hours don’t meet a threshold may be laid off in the long run.

This can significantly impact mental health in various ways, including:

1. Chronic overwork and pressure to meet billable hour targets can result in burnout, depression and anxiety.
2. The constant pressure to bill hours and meet conflicting deadlines can create chronic stress.
3. Working for long hours to meet targets can lead to decreased job satisfaction and a sense of purposelessness.
4. Billable hours can blur the line between work and personal life, exacerbating stress and burnout.

Will Billable Hours Exist in the Future?

Despite the prevalence of billable hours, alternative billing models like fixed fees or retainer services are gaining traction. As noted by The Lawyer, these models offer predictability and potentially less pressure for lawyers, which can contribute to better mental health and job satisfaction.

During the webinar, the panelists emphasised that the future of billing in the legal sector might lean towards value-based models. These models prioritise value delivered to clients over the hours logged, potentially fostering a healthier work environment and improving client relationships.

Overall

The webinar comprehensively examined the practice of the billable hour in the legal industry and its impact on lawyers’ well-being, offering a platform for discussions about the future of the legal profession in relation to billing practices. As the industry continues to evolve, shifting from the traditional billable hour practice and prioritising mental health could lead to a more sustainable, fulfilling and satisfying career for the next generation of lawyers.