Will inflation blow-up the #billablehour?

I doubt it.

But, multiple news outlets are reporting that the effect – perceived or real – of inflation is screwing with realised billable hour rates (see ‘Inflation Is Messing With Biglaw Billing‘ on Above The Law – as well as several others quoting from the six-month report recently published by Wells Fargo Private Bank Legal Specialty Group).

And all I have to say is this: There is an alternative – if you want to inflation proof your pricing, don’t bill by the hour (especially when you are getting paid for that hour, on average, 100+ days after you put it on your timesheet!)…

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The £600 an hour baby gorilla

According to a post in the Law Society Gazette, which in turn quotes from Jim Diamond’s new book ‘The Legal Extortion Racket‘, partners at Magic Circle firms in 2007 charged clients, on average, between £625-£700 an hour.

If that’s not scary, then it is impressive.

An hour of that partner’s time today would set you back somewhere between  £1,000 and £1,500.

We could probably call it and say that’s law’s version of ‘Moore’s Law‘.

But while we all might agree that’s an impressive, if not scary, number – if that’s your want or need you are, after all, getting an hour of a partner’s time. You’d have to imagine said partner would know a thing or two (otherwise how did they get to be a partner in a Magic Circle firm?) and get you the result you want. You may, at a stretch, even be able to argue that said partner works more efficiently than partners in other [non-Magic Circle] firms because they have done the rounds on big ticket matters and know a little about what they are talking about.

All of which could be perfectly true and fair.

So you let it go and turn your attention to another stat in the article quoting Diamond’s book:

Newly qualified lawyers at magic circle firms and US firms in London charge up to £600 an hour

To be clear, what we are talking about here is a ‘newly qualified lawyer‘ who most likely has a rudimentary understanding of the law at best, no idea what ‘utilisation‘ and ‘realisation‘ are, but by now will certainly know very well what a time-sheet is and how important that is to getting his/her/their bonus, charging clients £600 an hour!

That gives me a nose-bled just thinking about it.

For those who follow the hourly rate discussion, Diamond’s table makes for fascinating reading…

Photo credit  Dixon Newman on Unsplash

One employee retention strategy for law firms to consider: Kill the billable hour!

Any law firm looking for innovative, ‘out-of-the-box’ ways to retain their lawyers during this period now known as The Great Resignation could do a lot worse than take onboard a Faegre Drinker Biddle & Reath midlevel associate’s comments on the billable hour in the recently published American Lawyer’s 2022 Midlevel Associate Survey:

The billable hour is a cancer that will slowly eat away at you if you don’t get away from it quickly enough.

abovethelaw.com

Just a thought…

Napping Can Make Lawyers More Productive…

Loved, loved, loved the article on abovethelaw.com today that ‘Napping Can Make Lawyers More Productive‘.

Read the article, it’s a gem and Jordan Rothman is my new bestie. I particularly liked:

Management might consider being more open to napping in an office. So long as attorneys meet their billable hour requirements, why should management care what attorneys do while they are in an office? 

I’m sure many of us would agree!

Photo credit to  Michelle Middleton  on Unsplash