The billable hour is a term and concept cemented in the practice of law. In recent years, some lawyers have argued that it may be time to rethink the billable hour. While this seems unlikely, Minnesota Lawyer reached out to two individuals—one in the legal industry and another in creative services—to talk about whether this is advisable or possible.
Law has been practiced without the billable hour. In 1958, the ABA published a pamphlet called “The 1958 Lawyer and His 1938 Dollar” in which it explained how lawyers earned less than dentists. It encouraged lawyers to keep more accurate time records and become more business-like. Enter the billable hour. By the 1970s, the billable hour became standard practice.
Of course, in 1958, the ABA recommended lawyers bill 1,300 hours yearly. That number is now dwarfed by many firms, especially large ones. Nationally, lawyers bill about 1,800 hours per year. Many lawyers bill well over 2,200 hours. Not surprisingly to anyone who practices law, lawyers spend much more time working than they actually bill.
Being stressed, overworked, burned out—those terms have also become synonymous with the legal profession. Law students in their excruciatingly difficult first year have this message reinforced. And the consequences are serious.
Sara Gross Methner, who is chief attorney talent officer and senior counsel at Nilan Johnson Lewis, states, “Suicidal thoughts, sleep problems, workaholism, and social alienation and isolation also are experienced by lawyers at higher rates.” Gross Methner cites a 2020 study on lawyer suicide risk where levels of suicidal ideation among lawyers were double the rate of the general population.
Still, Gross Methner cautions that the billable hour is not the only source of the mental health crisis in law.
“It’s true that billable hours can contribute to professional burnout, but the issue is complicated,” Gross Methner states.
“What drains one employee may motivate another, so law firm leadership can’t look at the issue as one size fits all,” says Nilan Johnson Lewis CEO Kim Ess.
Gross Methner also points to the stress level of those in finance and insurance, where the billable hour is not a staple.
“Billable hours are easy to initially point to because they are inanimate, but the data suggest that stress is not limited to legal professionals in private practice,” Ess says. “Stress and burnout can certainly be fueled by billable hour expectations, but these issues will not be eradicated simply by eliminating the billable hour.”
Gross Methner suggests finding the true culprits and addressing them. “Lack of control over workload, workflow and work timing are known to contribute significantly to stress levels, and those factors are present in many service professions,” Gross Methner states. “In the legal profession, there can be stress associated with being in the middle of adversarial situations where clients’ interests are in tension with other parties’ interests. They can also arise from a sense of isolation or lack of community, misalignment of personal and employer values, and other issues.”
Chris Denny is founder and lead strategist at The Engine is Red, a creative services firm. The business has offices in Minneapolis, as well as Northern California and Austin. The firm has ditched the billable hour and detailed time-tracking.
“Client was three days late sending you the redlined document? Now you have to rush to hit your target for the week. Partner vendor moved a deadline? Now it wrecks your whole day,” Denny remarks. “Forcing our teams to hit billable targets, while simultaneously making them be ultimately reactive to every variable of a task creates an insane amount of pressure and stress. In many ways, being available is the deepest value.”
Instead of the billable hour, The Engine is Red made two changes. It made the smallest unit of measurement one billable day, or 20% of an individual’s week. The organization also now charges for availability. Clients reserve an individual’s time, talent, and attention.
“Forcing team members to track which minute is valuable enough to be billable is futile and false,” Denny asserts. “It actually incentivizes poorer work and linear thinking, rather than comprehensive investment of mind and thought.”
Denny also does not think that the concept of the billable hour is genuine. “Even the most seasoned professional can’t forecast a task weeks in advance to the rounded 15 minute interval. If they can, they’re lying,” Denny maintains. “In order to get good at it, one must waste time in minuscule planning and forecasting. And when reality sets in, all these tiny deltas cause minor tension points for the project managers, or worse the client.”
Gross Methner agrees that the billable hour is not perfect. “Sometimes your brain produces the most value while you are lying in bed at night, or while you are in the shower or walking your dog—that’s when you think of a great piece of advice or legal strategy or paragraph for your brief,” Gross Methner says. “You worry about whether you should bill for that great idea in the shower, because you weren’t otherwise on the clock when you thought of it. It can also instill fears that you must maintain an aggressive work pace to advance in the profession, even when you have exhausted your energy. Though not always the case, these dynamics can compound over time and spiral into lingering, unhealthy emotions about hours and compensation.”
Denny lauds the decision to ditch the billable hour. “It instantly calmed the chaos, allowed people to clock out at normal hours and skip weekend work,” Denny stated. “The simplicity and planning also afforded us clarity in planning and forecasting resources, as well as ensuring profitability across departments. And above all the work improved, our time and attention was now focused on the task at hand, not the clock.”
Ess notes that well-being runs deeper than just billable hours and posits other suggestions.
“Law firms and in-house legal departments can work to ensure they have paid-time-off programs and practice continuity plans that ensure every legal professional can take time away from work without feeling obligated to constantly check their phones,” Ess says. “Balance and boundaries are important, and there are opportunities to work with legal professionals and clients to make sure everyone is mindful of one another’s schedules, situations, and time.”
“We all need to continue to work to erase the perceived stigma around asking for help, both with mental health issues and generally, and encourage and support all legal professionals to seek assistance for mental health issues when needed.” Gross Methner says.
Correction: This article has been revised to correct some quotation attributions.