Hi there,
Does the billable hour need killing?
It’s not a rhetorical question.
On the heels of launching The PERSUIT 50, I’m reminded that questioning “what is” or “what has been” (like traditional law firm rankings) often leads to better outcomes.
Questioning the status quo is a core value here at PERSUIT.
For example, we talk a lot about “killing the billable hour.”
But even on that issue, I know we have blind spots. So I question myself often — and I ask others to, as well.
(For the record, not everyone at PERSUIT thinks we should kill the billable hour — at least not entirely.)
When I ask myself if the billable hour needs killing, here’s where I land 🤔:
No one wants half a house.
For the last 40 years, legal has incentivized effort, not outcomes.
The only way you can measure effort is the time spent. The billable hour. ⏱️
When I think about other industries that involve professional services — architects, accountants, financial advisors — their remuneration is usually tied to a very specific objective or outcome.
At the very least, other industries are much better at aligning price with outcomes (the billable hour is still alive and well beyond legal).
Build your house 🏠, reduce your tax liabilities 💰, improve your returns 📈.
Legal is one of the few professional services where value is measured almost solely by effort, or time spent.
Imagine if you hired an architect to design a house, but the firm sent their invoice before finishing the work.
For a half designed house…
Sounds bizarre.
Yet this is what happens every day in legal — because in legal we pay firms by the hour — because they put in a lot of effort — not because they delivered an outcome or even finished a project on your behalf.
Billable hours is not the way it’s always been done.
The billable hour as an industry standard didn’t take off until the 80s — as the industry started looking for a way to increase profitability.
We can keep the billable hour.
We can keep doing “what’s always been done.”
Things won’t fall apart. For now.
But to assume that the status quo will remain the status quo, or even was the status quo but for a brief period in time, is a mistake.
Sorry, but we lawyers aren’t as special as we’d like to think.
I’ll be frank here in saying that we lawyers fancy ourselves as special flowers 🌺.
I’m no exception. 😉
We like to think that our value is based on trust and relationships, and that our work can’t be scoped or commoditized.
When I narrow down what lawyers actually do — what I used to do when I was running my practice — there are only so many types of work. Each of which we’d do over and over again.
I was never forced to scope my work — with clear specificity around what needed to be done, the goals my clients wanted to achieve, and the price it would take to get there.
If we’re not special flowers 🌺, does that mean relationships won’t matter? That lawyers will become commodities 🛢️?
Does it have to be an “either/or” proposition?
I don’t think it does.
Architects, accountants, and financial advisors all have relationships based on trust — even while using fixed fees.
We can kill the billable hour and still have a client/counsel relationship based on trust and outcomes.
I know this because the 60+ enterprise clients that have sourced over $1 Billion in matters on the PERSUIT platform — mostly using alternative fee arrangements — are proving it to be true.
Do we need to kill the billable hour?
Do we need to incentivize value — instead of effort?
Yes, I think we do. 🤺
