Hourly billing sucks. There’s no way around it. It’s a relic. It’s archaic. And yet it prevails.A typical day might be something like this:
June 19, 2009
- Eat breakfast .5 hrs
- Drink coffee .2 hrs
- Shower .2 hrs
- Scratch ass .1 hrs (there’s always a minimum of .1 hrs)
- Stare aimlessly .2 hrs
- Drive to work .5 hrs
- Sit at cubicle 1 hr
- Shuffle paper .2 hrs
- Answer email .2 hrs
- Answer email .2 hrs
- Send email .2 hrs
- Send email .2 hrs
- Review reports .5 hrs
- Answer email .2 hrs
- Phone call .3 hrs
- Rearrange paper clips .2 hrs
- Stare at boss’s toupee .3 hrs (it looks ridiculous, you can’t look away)
- Think about going to lunch .2 hrs
- Go to lunch 1 hr
- Impersonate Dilbert 3 hrs
- Stare at clock and daydream 1 hr….OK, you get the idea
Despite trends towards flat fees, many–nay, most–lawyers and firms cling to the tired old tired and true method of billing by the hour. The median hourly rate in Oregon is $230 per hour and the average attorney bills 123 hours per month, according to the Oregon State Bar and Portland Business Journal. That comes to 1,476 (even more at the big firms where associates are expected to bill upwards of 2,000 hours per year) billable hours per attorney per year, and a total of $339,480 of gross billable hour monetary goodness per attorney. Not a bad little number.
What I wonder, though, is how much more the average Oregon attorney could have made by not keeping track of 88,560 minutes. The labor and time involved in tracking such an ungodly figure probably took tens of thousands of minutes by itself. Why not ditch the timers and time sheets and just offer a flat fee? Besides, firms that have ditched the billable hour entirely report making more, not less, than what they generated with the billable hour. See the Shepherd Law Group, for example, that saw its revenue jump 2.5 times during the first year it ditched hourly billing. More money and less time tracking sounds like common sense to me.
Flat fee billing gives both the attorney and client a number up front. The client knows for certain how much a specific matter will cost, and the lawyer is free to work as efficiently as possible without tracking his day in 6 minute increments. Win/win. And besides, any lawyer who excitedly talks about how many hours he billed last month is quite possibly a masochist. Anyone who enjoys the excruciating practice of breaking his life into 6-minute blocks of time is clearly a glutton for punishment.
2 responses so far ↓
Katy // June 24, 2009 at 3:07 am |
Pretty good post. I just stumbled upon your site and wanted to say
that I’ve really liked browsing your posts. In any case
I’ll be subscribing to your blog and I hope you post again soon!
Should you consider pre-lawsuit mediation? « (Un)Common Sense Lawyer: Portland, Oregon Small Business Law Blog // January 15, 2010 at 9:44 pm |
[...] and add $50 for each motion; oh, and of course there are the usual attorney fees, which average $230 per hour in Oregon. 10 hours of legal fees at that rate would be $2,230. Do the [...]