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Hourly Billings Are Making You Anxious and Depressed

Vivia Chen

July 17, 2012

TheBigClockThe billable hour has been pilloried as inefficient and antiquated. But is it also just plain evil? And could it be a major cause of anxiety and depression among lawyers?

I'm beginning to think so, after reading Frank Partnoy's article in The Wall Street Journal recently. Based on an excerpt from his book Wait: The Art and Science of Delay, Partnoy makes a pretty compelling case about how the billable hour system turns lawyers into basket cases.

First, Partnoy gives us a historical perspective of hourly wages in the WSJ:

The importance of clock time in the modern workplace can be traced back to Frederick Winslow Taylor. In 1909, Mr. Taylor, a former lathe operator, engineer and management consultant, published "The Principles of Scientific Management," in which he argued that companies should replace rules of thumb for accomplishing tasks with precise instructions based on scientific analysis of the timing of tasks. He told factory managers to time their workers on the various parts of their jobs and to determine how long each part should take. Once managers found the "one best way," Mr. Taylor said, they should require everyone to follow that exact approach, all the time.

This approach to managing factory workers eventually spread to white collar workers:

Today more than 58% of all wage and salary workers in the U.S. are paid at hourly rates. Hourly wages are increasingly common among the middle class and in upwardly mobile professions, including law, accounting, consulting and medicine. One-fifth of hourly workers are under age 25, but fewer than 5% of hourly jobs are at or below the minimum wage.

So if you've ever felt like a cog in the widget factory, you now know there's historical basis for it.

But even when lawyers get time away from the law firm factory, they are unable to relax. Under constant pressure to bill more and work faster on impossibly tight deadlines, lawyers today have a hard time shaking the crippling psychological effects of the hourly system. Partnoy writes that high level hourly employees are essentially enslaved by it:

They suffered from higher stress during downtime, and they worried more about having enough work. When work was available, they were tempted to work as much as possible. A vacation or a day off meant a loss of money. Other studies found that the problem got worse as people made more money, because they felt that their time was more valuable and therefore more scarce.

The solution, writes Partnoy, is to either compartmenalize your feelings or change the system: "If you're at your kid's soccer tournament, block out the idea that it is costing you a fortune." The other solution is to stop billing by the hour. "Professionals could instead charge a fee based on the service provided: a fixed amount to file a legal brief or complete an audit or repair a leak."

The second solution is the long term one but I'm not optimistic that it will happen anytime soon. Even though firms are increasingly doing alternative billings, I don't know any major firm where lawyers are free from the shackles of time sheets.

So I guess Big Law lawyers will just stay neurotic and depressed.

 

Comments

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Vivia, have a look at Riverview Law (www.riverviewlaw.com). Fixed prices only, no hourly billing and our lawyers do not have time sheets - which frees our teams to solve customers problems not bill more hours. Our model is built from the customer up not the partner down. Culturally, ripping up timesheets has had a huge, and positive, impact.

A realistic expectation of earning a million dollars a year? Seriously? You don't know the legal profession well. The path to partner weeds out most attorneys (many voluntarily) and law firm revenues are down everywhere. Clients actually read bills and challenge them now - a million a year is for one lawyer out of many. Average JD pay in the US is well under $100,000/year for just as much work.

Why do lawyers gripe so much? They have a clear career path (associate to partner), they earn an ungodly sum fresh out of the gate ($160,000) with the very realistic expectation of one day earning a million dollars a year! What other profession can offer that?

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About The Careerist

The Careerist takes an inside look at how lawyers shape their careers and manage their lives. The blog aims to dissect developments in the profession, provide useful information and advice, and give lawyers a platform to voice their views. The goal is to provide a fresh, provocative take on the state of lawyering.

About Vivia Chen

Vivia Chen

Vivia Chen, The Careerist's chief blogger, has been covering the business and culture of law firms for a decade. A former corporate lawyer, Chen is fascinated by those who thrive (as well as those who don't) in the legal profession. Her take: Success in the law (and life) doesn't always travel a linear path. If you have topics you'd like to discuss or information to share, contact her: VChen@alm.com

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