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The selling point for tech is often that it makes you more efficient. But law firms don't want to be more efficient because their income is tied to the billable

The selling point for tech is often that it makes you more efficient. But law firms don't want to be more efficient because their income is tied to the billable hour. Partners, who run the firm, know that if you make their associates more efficient, they will literally make less money doing the same amount of work. There are some firms that understand the value of efficiency (especially those that do fixed-fee or value-based billing), but most of the largest firms aren't especially interested in increasing efficiency.

Alupis 3y ago
> they will literally make less money doing the same amount of work I call BS on this. Doing more in less time means you can do even more than before and kill your competition. There is nothing but upside in advancing technologically for pretty much every industry.
- sidewndr46 3y ago
  From what I understand a lawyer can't advertise his or her services as better or worse than anyone other lawyers. It's part of the deal of having your law license. You agree that everyone else is up to the same standard, or you bring up a complaint and suggest their license be revoked / suspended / etc.
  - tenebrisalietum 3y ago
    But you could take on more clients per day and make more money?
    - brewdad 3y ago
      The partners will make more money. The lawyers doing the work will make the same amount of money while dealing with twice as many clients.
      - gnicholas 3y ago
        The partners won't make more money because their associates will be billing the same number of hours. They'll just be doing so for more clients, which doesn't really do the partners any good (aside from making them feel more powerful because they have lots of clients).
    - SteveGerencser 3y ago
      But you are still billing by the hour. 8 hours in a day. Do work for 4 clients or work for 8 clients and get the same amount of money? There are a few law firms that are heavily automated. But they are mostly larger, class action, pay per result, type law firms vs your standard law firm.
      - sidewndr46 3y ago
        Yeah, I worked with one of those "we get paid if you get paid" firms. Professional, courteous, & every conversation we had was completely to the point. First call was with a receptionist. Spent maybe ~30 minutes talking to the lawyer total. They already optimize not to waste time.
    - tech_ken 3y ago
      If I charge a fixed rate per hour then the number of clients is irrelevant no? 8 hours of work a day pays the same amount, regardless of how many people it serves.
  - Alupis 3y ago
    I'm not sure what you're driving at? If the firm can handle clients in 1/2 the time, they can take on more clients. They don't have to advertise themselves as being "better" or something. Payroll, for all businesses, is a huge limiting factor on abilities. Which means, you can't just "staff up" and become larger overnight.
    - sidewndr46 3y ago
      Why would I want to do twice the work in the same amount of time if I am paid by the hour?
      - Alupis 3y ago
        Not all work is equal. Some will require partner time - others lead to longer more lucrative relationships. Being capable of handling more load means you will earn more money in the long run - usually a goal for most business owners. Not to mention, you might not require a small army of paralegals and secretaries anymore... fewer staff can get the same load accomplished. It even opens the door to charging flat-rates for certain services, instead of by the 1/10th hour or whatever. The point is, doing more in less time is always better... even if you decide to kick back and relax with your newfound time.
- gipp 3y ago
  That's only true in the world where clients are infinite and the cost of acquiring them is zero.
- z3c0 3y ago
  As someone who works closely with legal billing, I'm also calling BS. I can attest firsthand that lawyers regularly get deducted on bills for spending too much time on their tasks. There's an entire market (well over 50 companies) for reading legal bills and sending them back with reasons they won't be paid. Spending too much time on a task means it will take longer to get paid for it.
- gnicholas 3y ago
  This isn't how law firms see things. Can they do more in less time? Yes. But can they double their rates so that they're making more money? No. And while they could hypothetically get more clients, this aspect of the business is based on relationships (and is a burden for senior partners). Partners know that if associates are more efficient, there's a chance they would lose money, and a chance they could win more new clients and add those in too. But at the end of the day, that just puts them roughly where they were before — with fully-occupied associates, and a book of business that is the same size. For partners, it's all risk and no reward.
  - Alupis 3y ago
    Fire half of your staff and get the same amount of work done as before. I repeat - there is zero downside to modernizing and using tech for any business. You have to adapt and figure it out... before your competition does. Perhaps that means changing your billing model or something - whatever, figure it out. All of this "no automation - no technology" chanting is wild to see. Majority of what a law firm does is low skill or no skill. Copying documents, looking up case law and citations, filling in documents from templates, etc. None of this requires highly skilled labor, and a lot of it can be automated or made easier for fewer people to accomplish the same output.
    - gnicholas 3y ago
      When a law firm sends out a bill to a client, it lists the following info: • description of task • time spent on task (in 6 min increments) • name of person who did the task • billing rate of said person • total cost for the task Unless a firm that "fires half its staff" also doubles its billing rate, it will not make more money. And good luck to the firm that tries to double its billing rate. It is very difficult to convince clients that you're worth that much (or that you should be getting all the benefit from advances in technology). I'm not saying firms shouldn't make changes, I'm saying they really don't want to. Eventually they will, just like they eventually got rid of typing pools. But it took much longer than it would have if the incentive structure in firms were different. They are married to the billable hour.
TheJoeMan 3y ago
Car mechanics figured this out years ago with standard “book rates” for hours. Swap the starter in 1 instead of 2 hours? Pocket the diff. This even covers things like “already had the engine pulled out but still billed 2hrs for starter”.
- User23 3y ago
  At that point they are effectively pricing based on the work accomplished rather than the time taken to accomplish it. That sounds justified so long as it's transparent. Certainly as a customer if my car is in the shop for a week I don't really care how long any individual step actually took, I just care how long it takes to get my car back.
- gnicholas 3y ago
  Law firms call this value billing, but it's still pretty rare. The equivalent would be "write memo on topic X, which is mostly copied from a memo we already wrote for a similar client."
dragonwriter 3y ago
> But law firms don't want to be more efficient because their income is tied to the billable hour. Law firms with better reputation can and do charge more per billable hour. Presumably, results factor in to that, so anything that produces better results for the same effort should, over time, increase the $/hour rate. (Or, if only relative and not absolute performance matters, missing out on an improvement adopted by other firms will drop the sustainable $/hr rate.) Also, not all lawyers are employed in law firms, and many are employed in places where their time is cost not revenue.
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cbfrench 3y ago
IANAL, but I’m married to a partner in biglaw. Clients routinely refuse to pay for work they perceive (rightly or wrongly) to have been done inefficiently or unnecessarily. For instance, this past week, my wife had an associate who took an absurdly long time to research and write a draft of a brief, and almost all that time will be getting written off by the firm because the client won’t pay for it. Every large client is sifting those bills with a fine-tooth comb to determine what they won’t pay, and the firm isn’t going to risk future business for the sake of dickering over an associate’s hours. So even if it was true in the past that the billable hour incentivized inefficient work, it seems that clients have figured out how to even up the scales for the most part.

Alupis 3y ago

> they will literally make less money doing the same amount of work I call BS on this. Doing more in less time means you can do even more than before and kill your competition. There is nothing but upside in advancing technologically for pretty much every industry.

sidewndr46 3y ago
From what I understand a lawyer can't advertise his or her services as better or worse than anyone other lawyers. It's part of the deal of having your law license. You agree that everyone else is up to the same standard, or you bring up a complaint and suggest their license be revoked / suspended / etc.
- tenebrisalietum 3y ago
  But you could take on more clients per day and make more money?
  - brewdad 3y ago
    The partners will make more money. The lawyers doing the work will make the same amount of money while dealing with twice as many clients.
    - gnicholas 3y ago
      The partners won't make more money because their associates will be billing the same number of hours. They'll just be doing so for more clients, which doesn't really do the partners any good (aside from making them feel more powerful because they have lots of clients).
  - SteveGerencser 3y ago
    But you are still billing by the hour. 8 hours in a day. Do work for 4 clients or work for 8 clients and get the same amount of money? There are a few law firms that are heavily automated. But they are mostly larger, class action, pay per result, type law firms vs your standard law firm.
    - sidewndr46 3y ago
      Yeah, I worked with one of those "we get paid if you get paid" firms. Professional, courteous, & every conversation we had was completely to the point. First call was with a receptionist. Spent maybe ~30 minutes talking to the lawyer total. They already optimize not to waste time.
  - tech_ken 3y ago
    If I charge a fixed rate per hour then the number of clients is irrelevant no? 8 hours of work a day pays the same amount, regardless of how many people it serves.
- Alupis 3y ago
  I'm not sure what you're driving at? If the firm can handle clients in 1/2 the time, they can take on more clients. They don't have to advertise themselves as being "better" or something. Payroll, for all businesses, is a huge limiting factor on abilities. Which means, you can't just "staff up" and become larger overnight.
  - sidewndr46 3y ago
    Why would I want to do twice the work in the same amount of time if I am paid by the hour?
    - Alupis 3y ago
      Not all work is equal. Some will require partner time - others lead to longer more lucrative relationships. Being capable of handling more load means you will earn more money in the long run - usually a goal for most business owners. Not to mention, you might not require a small army of paralegals and secretaries anymore... fewer staff can get the same load accomplished. It even opens the door to charging flat-rates for certain services, instead of by the 1/10th hour or whatever. The point is, doing more in less time is always better... even if you decide to kick back and relax with your newfound time.
gipp 3y ago
That's only true in the world where clients are infinite and the cost of acquiring them is zero.
z3c0 3y ago
As someone who works closely with legal billing, I'm also calling BS. I can attest firsthand that lawyers regularly get deducted on bills for spending too much time on their tasks. There's an entire market (well over 50 companies) for reading legal bills and sending them back with reasons they won't be paid. Spending too much time on a task means it will take longer to get paid for it.
gnicholas 3y ago
This isn't how law firms see things. Can they do more in less time? Yes. But can they double their rates so that they're making more money? No. And while they could hypothetically get more clients, this aspect of the business is based on relationships (and is a burden for senior partners). Partners know that if associates are more efficient, there's a chance they would lose money, and a chance they could win more new clients and add those in too. But at the end of the day, that just puts them roughly where they were before — with fully-occupied associates, and a book of business that is the same size. For partners, it's all risk and no reward.
- Alupis 3y ago
  Fire half of your staff and get the same amount of work done as before. I repeat - there is zero downside to modernizing and using tech for any business. You have to adapt and figure it out... before your competition does. Perhaps that means changing your billing model or something - whatever, figure it out. All of this "no automation - no technology" chanting is wild to see. Majority of what a law firm does is low skill or no skill. Copying documents, looking up case law and citations, filling in documents from templates, etc. None of this requires highly skilled labor, and a lot of it can be automated or made easier for fewer people to accomplish the same output.
  - gnicholas 3y ago
    When a law firm sends out a bill to a client, it lists the following info: • description of task • time spent on task (in 6 min increments) • name of person who did the task • billing rate of said person • total cost for the task Unless a firm that "fires half its staff" also doubles its billing rate, it will not make more money. And good luck to the firm that tries to double its billing rate. It is very difficult to convince clients that you're worth that much (or that you should be getting all the benefit from advances in technology). I'm not saying firms shouldn't make changes, I'm saying they really don't want to. Eventually they will, just like they eventually got rid of typing pools. But it took much longer than it would have if the incentive structure in firms were different. They are married to the billable hour.

TheJoeMan 3y ago

Car mechanics figured this out years ago with standard “book rates” for hours. Swap the starter in 1 instead of 2 hours? Pocket the diff. This even covers things like “already had the engine pulled out but still billed 2hrs for starter”.

User23 3y ago
At that point they are effectively pricing based on the work accomplished rather than the time taken to accomplish it. That sounds justified so long as it's transparent. Certainly as a customer if my car is in the shop for a week I don't really care how long any individual step actually took, I just care how long it takes to get my car back.
gnicholas 3y ago
Law firms call this value billing, but it's still pretty rare. The equivalent would be "write memo on topic X, which is mostly copied from a memo we already wrote for a similar client."

dragonwriter 3y ago

> But law firms don't want to be more efficient because their income is tied to the billable hour. Law firms with better reputation can and do charge more per billable hour. Presumably, results factor in to that, so anything that produces better results for the same effort should, over time, increase the $/hour rate. (Or, if only relative and not absolute performance matters, missing out on an improvement adopted by other firms will drop the sustainable $/hr rate.) Also, not all lawyers are employed in law firms, and many are employed in places where their time is cost not revenue.

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cbfrench 3y ago

IANAL, but I’m married to a partner in biglaw. Clients routinely refuse to pay for work they perceive (rightly or wrongly) to have been done inefficiently or unnecessarily. For instance, this past week, my wife had an associate who took an absurdly long time to research and write a draft of a brief, and almost all that time will be getting written off by the firm because the client won’t pay for it. Every large client is sifting those bills with a fine-tooth comb to determine what they won’t pay, and the firm isn’t going to risk future business for the sake of dickering over an associate’s hours. So even if it was true in the past that the billable hour incentivized inefficient work, it seems that clients have figured out how to even up the scales for the most part.