In Recent News, it was discovered that billing by the hour causes cancer in professionals who adopt these billing practices. The problem is said to start with cancerous "time-billing" cells in the brains of consulting and law firm partners. Since these cells infect the brain, causing irrational behavior in the partners thereby causing them to lose all common sense (to healthy hosts). For instance:
Common Sense:
- The more effective I can be for the client, the more value this will have to the client.
Thinking of Cancer-Infected Partners:
- The more I drag this out and the more hours I can bill, the more this must be worth to the client. Yahoo! Let's burn the midnight oil!
The problem discovered by J. Doctor Marston was that organizationally, the cancer is infectious from the top down. Therefore, once the brain cancer infects the host partners, it quickly spreads to the other partners and junior staff in the firm. Interestingly, the cancer operates differently in those infected at lower organizational levels. Dr. Marston's research discovered that the brains of associates are highly resistant to the cancer of the partnership initially. Unlike the partners, who actually believe they are operating under a economically sound billing model (although it is well documented that Karl Marx's Labor Theory of Value has long been refuted!), associates and laterals do not immediately experience a chemical change in the brain causing them to believe that clients actually want to buy TIME! Studies show that the cancer first infects the associates in other body parts effecting motor skills and the nervous system. For example:
-- Big firm associates who become infected experience a "treadmill effect," constantly worrying about not meeting their billable hour quotas. They think about time they spend with their loved ones as an opportunity cost . . . feeling like they "could be billing for that time instead." They hate feeling that way, but cannot help it.
-- The cancer in associates also causes lethargy in partners and associates alike. Consequently, outside counsel and clients are left having to manage their consultants and attorneys by giving them deadlines to avoid over-consulting, over-lawyering, drag-outs, unnecessary 50-page memos, briefs, etc.
After years of billing by the hour, infected consultants, attorneys, and lateral partners eventually get "billable brain cancer" and begin to believe that the only way to run a firm is bill by the hour. It is an unfortunate fate for those who experience it. Fortunately, some associates manage to escape the hamster wheel in time to get cured (most by leaving the profession and some by escaping to in-house legal departments where they watch from afar as their former colleagues become further entrenched by the nasty billable hour cancer at large firms!
Fortunately, Exemplar (http://www.exemplarcompanies.com/) has created cancer-free professional services and law firms where the partners operate under economically sound principles, think of working effectively and adding value (not acting as fungible commodities billing time increments). Increments are Excrements! Adding value is what drives our attorneys to leverage their unique skills, rise to new heights, and please clients time and time again. A healthy lifestyle option has arrived in the legal profession. Exemplar Companies has found the cure to billable hour cancer!
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4 comments:
Well done, Chris.
The limited thinking of 'conventional wisdom' in the pofessions is stifling innovation, productivity, growth, customer value and shareholder value. I have been pioneering value-based pricing in Australia since the early 90s when I had my own taxation and financial panning firm. My partners and I always believed that hourly or per diem pricing was unethical and perpetuated poor management pactices.
Value-based pricing is totally appropriate for a myriad of professional service industries and firms.
One of the most significant inhibitors to professional service firms moving to VBP is 'risk.' The professional service firms fear that the VBP model will put them at risk by not knowing how long a project will take. If they do not have the intellectual firepower to understand their business, their solutions and the value-offering, do you want them working for you? The future will hold the key for those who survive and thrive and then there will be those who keep wondering how they can bill more time.
Ric Willmot
Australia
www.ExecutiveWisdom.com
I appreciate your exposing the emperor (i.e. the main-stream legal profession) for being naked, or at the very least, extremely out of fashion. Even though I am a licensed attorney living in Boston, I've conducted my own business for years, and as they say... "he who represents himself has a fool for a client". I am so disgusted with the majority of lawyers I have hired, as it has become abundantly clear that the focus in our profession has become all about billable hours (many firms have contests to see who can rack up the most... this, as you have noted, leads to outrageous outcomes! At $600hr... I don't need my lawyer calling me to 'chat' for 30 minutes, which they have. It's almost like. "I need to make a quick $300...oh, I will call Jack!"), as opposed to client satisfaction, and taking pride in creating value for that client... like it is in the rest of the business world. Are you looking for any new attorneys? lol.
Thanks Anonymous,
Yes -- We are always looking for leaders. Clearly, most lawyers cannot see beyond their own timesheets, but Exemplar has always been looking to absorb the leaders of the future of the profession where the passion and vision of our people can meet a working environment that not only allows it all to come to fruition, but supports the movement. Thanks for your comments.
There is NOTHING wrong with the billable hour.
What is wrong is that most firms have mandatory billable hour targets for their associates.
Exceed the target and you help your career. Fail to meet it and you risk getting fired.
That is the problem that needs to be tackled. Who makes these targets? Partners corcerned with their large PPP. Associates have no power in this regard.
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