Wednesday, February 28, 2007

The Tail Is Wagging The Dog!

The Tail Is Wagging The Dog!

Backwards. That is how many people describe the way law firms operate and the billable hour. The tail is indeed wagging the dog. What I find very interesting is the direct link between low professional satisfaction (not just in hours worked, but in terms of the "type" of work that legal professionals do and the billable hour model.)

All of the best management books tell you that the best companies and managers legislate the ends, not the means for their people. This is how they get the very best out of them. I completely agree with this. After all, which boss would you rather work for a boss who tells you what to do? Or one who tells you what goal you have to achieve? What management experts say quite clearly is that you can NEVER get the best out of your people by legislating the means. . . it is just poor management. Consequently, an organization that does so is destined for mediocrity. What does this all have to do with the billable hour, you ask? EVERYTHING. The tail is wagging the dog, and the billable hour is to blame. Allow me to lay the foundation and you will see!

Everything is about cause and effect, right? When you do something, make changes to policy, choose to promote someone, it all has an effect on the organization. Well, implementing the billable hour model certainly did. In the 1960's the legal industry was full of general practitioners. Even those who had specialized expertise had a broad enough knowledge to be useful in a few areas. Prior to the institution of the billable hour in the late 50's and early 60's clients were buying outcomes . . . RESULTS. Then, those whom we served were legislating the ends and letting the attorneys use their talents to achieve the best result for the client. Then came billable hours . . . we started to sell units of time. Clients don't want time, they want results, but if all we are selling is time then what do you think is going to happen? All of a sudden, you are making it your clients business what you do with every bit of your time, and by the way, they will want everything done faster (I don't blame them! I don't want to buy time either). Cause: Billable Hour, Effect: Pressure to get it done faster, which is the cause of the super-specialization of attorneys who then go back to clients and claim that through their infinite wisdom they can get it done faster (though a 3x the rate). CAUSE: Super-specialization EFFECT: The dumbing down of the legal profession by way of over specialization. Like in manufacturing, in order to claim to be faster you get people who do the same task over and over again, suffering from intellectual atrophy and doing work well below their competence level just to tell the client they can go FASTER. They have commoditized themselves and made talent and skill irrelevant and Tail is Wagging the Dog! We have created a model where clients, who really want results, are forced to legislate the MEANS and not the ends because attorneys insist on billing time. They scour over your bills and start picking at what you do with every minute of your time . . . because you want to bill time . . your clients are running your business . . . . your clients are managing your people . . . and the Tail is Wagging the Dog!

What, then, becomes of the unique talents and skills that attorney might normally use to effect a winning result for a client? NOTHING! Why? Because you have to justify "value" to the client who is not present with you in 6 minute increments on a timesheet that is presented often months later. It is not only nonsense, it is simply ridiculous. As a firm that does not bill by the hour and gets results every time, I can tell you that the most value added activities we can do for clients are not ones that a traditional firm would consider "billable." Most attorneys do not want to do one thing and only one thing for the rest of their lives. Attorneys are people too, who find meaning in diversity of work, challenge of work, and the freedom to set free their talents to achieve "you can't get this anywhere" kinds of results. They are people who do not want to be slaves to a model that dictates what they do with every minute of their time, wondering if that 6-minute increment they are on right now will end up with a red line through it on the clients bill! That is no way to live. . . it is no way to manage and develop your people and it is certainly no way to run a business. Our well-rounded attorneys use every bit of their unique skills everyday and combine them in ways that get results for clients that cannot be found anywhere else. Clients do not want to buy our time. They want results. They do not care if we have a team meeting to strategize their case (they don't care if there are 5 attorneys in the meeting because we are not billing them for 5 attorneys x $400/hr). They care when the business deal is done, when their dreams come true, when the battle is won. And our people? They care that they are building an organization that cares about result, not tasks. One that let's its people leverage every unique bit of who they are to achieve a positive end for the client, and one who does not artificially force them to over-specialize for the sake of doing the same repetitive task again and again and again. It is time for the Tail to Stop Wagging The Dog! At Exemplar, this happy dogs wags its tail to the end of the billable hour tune! Wanna play?

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