The Myth of More Time for Billing

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As a lawyer, time is your most-valuable asset whether you spend it billing time or completing flat-fee tasks. So it makes sense to free up as much of your time for doing more billing, right?

Well, it depends.

Freeing Up Time

The usual way to “free up” time is to hire someone. At some point, every lawyer starts to feel swamped, which leads them to consider hiring someone to free up time for lawyering so they can bring in more money, which will more than cover the employee’s or independent contractor’s paycheck.

Except it does not usually work out that way. Hiring your first employee or independent contractor actually creates a third new position in your firm: manager. What really happens when you hire an assistant or junior associate is that you spend your freed-up on management, not billable lawyering. And since you now have an extra paycheck to write, you will also have to do more marketing to bring in more business that will increase your revenue so you can write those paychecks every month.

You may also free up some time for lawyering, but almost certainly not as much as you hoped. Especially if you are new at managing staff, it takes a while to get the hang of it. Expect your profits to drop until you figure out how to manage your staff effectively and efficiently (something many lawyers never do figure out), bring in more business, and do more billable lawyering.

Instead of hiring staff to free up time, most solos are better off staying solo, raising rates, and selecting better clients. Hire someone when you can afford it on your existing revenue, not when your calculations require you to free up time for billing.

Another common way to “free up” time is to adopt a particular technology. While going paperless or adopting practice management software can definitely free up some time, they generally don’t make a huge difference. You should absolutely go paperless and make sure you are on top of your clients and matters, but don’t expect to free up hours a day. An hour a week would be pretty amazing. You will probably realize more revenue from the money saved on office supplies and copying costs than on new billable time.

The Productivity Limit

Theoretically, let’s say you freed up all your time for lawyering. How much of that time could you realistically spend doing billable legal work, on average?

No matter how many hours are technically available for lawyering, few people could actually use all of them. NALP’s most-recent information on billable hours shows the average billable hours hovers around 1,800 per year, or about 7.2 hours per workday, if you work five days a week and take two weeks off. The total hours worked counting non-billable time is about 2,000, or as you might expect, about eight hours per day. So it seems reasonable to peg your theoretical maximum productivity at about seven or eight hours a day. Sure, you may hang around the office for longer, but you probably aren’t getting any actual work done in that time.

If you are already averaging seven hours of billable work in a day, you cannot realistically expect to gain much more time no matter what you do. Before you use more time for billing as an excuse to hire someone or buy something, consider whether you would actually be able to make good use of that time.

Instead, focus on eliminating waste in the practice you have, raise your rates if you can, and focus on your most-profitable clients.

Featured image: “close up of man hand holding hourglass” from Shutterstock.

Practice Management

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  • Jay Brinker

    I agree with you. I think. I view my staff (law students) as an expense and a necessary cost of doing business. They are not a profit center, but they do help my quality of life by handling some of my mundane tasks and rudimentary drafting. I figure if they can get a document/project 85% correct, I can take it the rest of the way while focusing on bringing in business or working on matters beyond their skill sets. I cut my staffing costs by $30k when I switched from an associate to a law clerk. With an associate, you pay a salary whether they are busy or not. With a clerk, I pay for their time in the office which I can schedule according to my needs.

  • Mark H.

    I appreciated this article, Sam. It’s an issue that has crossed my mind over the last several years as my practice has grown. As you stated, the reflexive response to a growing solo law practice is to hire employees. But often little thought is given to the hard numbers of taking on employees. As I’ve analyzed this issue, profitability is enhanced the most by first focusing on eliminating wasteful spending and focusing on the best (most lucrative) cases and clients. Employees are expensive and their turnover rate is high. It would take a substantial increase in revenue created by an additional employee to make up for the increased costs. And it isn’t realistic to believe the increased revenue is going to come from an attorney’s time being “freed up” now that they have an employee. Any free time will likely be spent training, managing and attempting to fill a position vacated by turnover.

  • Mike C.

    I’m curious about the NALP billable hours per day numbers as they apply to solos. I’m taking a practice management course given by a bar association geared towards opening a solo practice, which I hope to do, and the guidance I’m hearing (from a former solo litigatior) for fee-setting and financial planning is to estimate 3-4 productive/billable hours per day (and stay there). This is in part based on an ABA study. Necessarily, that means setting higher fees that meet expenses based on those hours, rather than pursuing more business/higher productivity and lower fees. I believe the theory is that managing the practice, marketing, and the ups and downs over time keep the average productive hours low. Do you think NALP’s figures reflect the middle ground between solo/small firms with lower billable hour averages for the reasons noted and the high billable hour large firms in which highly-paid associates are fed work to reach 2,000 plus billables? Does it depend on the practice area or the amount of time/success you have building your solo practice? It seems a bit unrealistic to bank on a full day of billable work every working day of the year — and to shortchange business development or management — but maybe some areas or successful practices lend themselves to it more than others? Thanks!

    • http://samglover.net/ Sam Glover

      I think you’d get better responses to this question in our forum, the Lab. If you want to hear from more lawyers than me, that’s the place to ask, since this post is no longer on the front page.

      My own experience says that 3–4 hours of billable work a day (whether or not you actually bill by the hour) sounds about right. I also know that it varies a lot from one practice to another.