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A timely debate
The billable hour attracted both praise and criticism in a year punctuated by moves to either eradicate or entrench time billing practices.One of the biggest hitting stories of the year was the…
The billable hour attracted both praise and criticism in a year punctuated by moves to either eradicate or entrench time billing practices.
One of the biggest hitting stories of the year was the news that Corrs Chambers Westgarth would be adopting automated time billing software. Published on 1 November, Corrs adopts automated time billing generated much conversation about the intent behind it.
“It will really help to jog [a lawyer’s] memory, rather than them sitting there going, ‘Now, what did I do this morning?’” said Jon Kenton, Corrs’ chief information officer. “The further you go in time from the day of filling a timesheet out, the harder it gets to be accurate, and it’s really important that [timesheets] are as accurate as they can be.” However, the voices against the software soon started to emerge, with Marque Lawyers managing partner Michael Bradley expressing disgust at what he said was a new low for law firms.
“Who on earth could be delighted to learn that they’re going to be subjected to this?” he asked. “Especially anyone who calls themselves a ‘professional’. Of all the steps our profession has been taking, by progressive inches, to dehumanise lawyers over the years, this just screams out for someone to say ‘enough!’”
This was followed soon after by the news that Melbourne firm Russell Kennedy was also considering implementing the software.
| “If you do it super efficiently, the client has lost the gamble. If you do it really inefficiently, the lawyer’s lost the gamble” Stuart Westgarth, president, Law Society of NSW
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These events were simply a continuation of what has been an ongoing debate within the profession in 2011.
In January, the president of the Law Society of New South Wales, Stuart Westgarth, said the billable hour was on his 2011 hit list of hot issues – though added that it is one which sometimes gets overly criticised.
“If done properly, [time billing] is a true reflection of the work undertaken, whereas fixed-fee billing involves a gamble that the work undertaken will equate with the fee previously agreed to,” he told Lawyers Weekly. “If you do it super efficiently, the client has lost the gamble. If you do it really inefficiently, the lawyer’s lost the gamble.”
The interest in this issue was acutely obvious in February when we ran the story, Sydney firm scraps billable hours. We reported that workplace law firm People and Culture Strategies (PCS) had decided to move away from billable hours and instead offer tailored packages that would allow clients to use their services without worrying about the clock ticking.
“In-house legal counsel and HR directors now have an uncomplicated way of complementing their skill set with ours,” said managing director Joydeep Hor. “It’s what I call affordable quality and I believe clients in the workplace space have been crying out for this for years.”
In May, we reported on a story which went so far as to link the billable hour with bullying. We revealed that a key submission in The Report on Psychological Distress and Depression in the Legal Profession was that the focus on billable hour targets can amount to bullying and lead to depression. The Report was commissioned by the Law Society of Western Australia following an increase in the number of legal practitioners suffering from anxiety, stress and depression.
“The emphasis upon the production of billable hours creates a working environment which ... discourages professionalism and reduces work satisfaction to unacceptable levels,” said the Report.
Despite all the criticism, in August we reported on a survey conducted by Mallesons Stephen Jaques which revealed that the billable hour was still the preferred costing method of in-house counsel. According to the survey, which included 374 respondents (of which 44 per cent were general counsel), 50 per cent of respondents said fees billed at an hourly rate make up over 90 per cent of their total legal spend. “It is a little surprising to see such strong support for hourly billing, given our own experience of the number of clients who are interested in exploring alternative arrangements,” said Mallesons managing partner Tony O’Malley.
