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Measuring performance and setting priorities

March 03, 2016

There has been a great deal of discussion on how the billable hour system rewards inefficiency, and many (myself included) have talked about how the system of billable hours is one of the many reasons why there are so few women partners in city law firms.

This article goes a step further by saying that the current billing and time recording system works against proper client focus.  It goes on to say that the system may mean that firms and lawyers look for quantity rather than quality.

Although systems are changing, the reality is that the majority of the profession still bills on an hourly basis and most law firms’ internal remuneration and career progression is still largely based on the hours their lawyers bill.

This is an outdated system and needs to change.  GCs can ensure that the changes already taking place within the profession continue, but law firms need to change their internal models and stop putting so much weight on the “hours billed” and to start putting greater emphasis on “output” as well as on other skills such as team management.

The profession stopped charging on “words written” in the 19th century and now we need to stop charging on the “billable hour”.

Firms’ persistent emphasis on time recording may be the most significant factor working against proper client focus. In prioritising measurement of the time taken to perform tasks, rather than finding a way to assess their importance for clients, firms choose to elevate quantity over quality. Even when a firm has a good system for assessing client satisfaction, it is rare for that information to be integrated into decisions about individual lawyers’ progression or bonus. (And I suspect good systems for assessing client satisfaction are vanishingly rare in themselves.)

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