The more I work for others, the more I realize what won’t fit into my vision of a perfect firm.  One of the biggest problems I see with the attorney I currently work for are time management, and client management, issues.

The attorney I work for (let’s call him Boss) spends half his day dealing with clients.  Boss is constantly on the phone with clients, or sitting with them in his office.  There are no designated “phone call” or “meeting” times.  A client calls and they get transferred to him.  A client walks in and, while they may have to wait a little bit, they end up in his office eating up his time.

One of the reasons for these constant interruptions (at least based on what I’ve heard and seen) is that Boss charges by the hour.  Boss constantly has clients in the office or on the phone asking about bills.  While the client bills are “detailed” in their listing of what went on during a period of time, it’s difficult for a client to see the value of some of the services.  As a result, Boss ends up spending too much of his time dealing with explaining the bill, when he could be working on their case.

I think this is a good argument against the billable hour.  In fact, I think this is one of the better arguments out there.  I’ve always dismissed the idea that the billable hour puts you at odds with your client (i.e., the conflict of interest theory) because any billing method does that.  Let me explain.  Opponents of the billable hour often say the following: when you bill by the hour, your interests are in conflict with the client.  This is because your interest is in stretching everything out and being inefficient in your work (i.e., take more time, charge more money).  Of course, these opponents rarely see the opposite side of the coin:  any flat-fee arrangement (whether or not it’s called value billing) puts you at odds with the client as well.  When you make the same amount of money regardless of time spent, it’s in your best interest to come to a conclusion as quickly as possible.  Either way there’s a conflict with the client.

The difference is this: when you have some sort of a flat-fee arrangement, your clients know what they’re paying up front, and, usually are paying it up front.  The money is earned upon payment, so unlike funds in a trust account, the money is yours.  If you charge a flat rate, you don’t have to spend time explaining what every little charge is for.

In the perfect practice, there will be a phone system in place that minimizes the amount of time I will have to spend on the phone.  Meetings with clients will be when truly necessary and by appointment only.  Most importantly, I will use a billing system that minimizes the amount of time I have to spend explaining my bills to my clients, so I can spend more time working for them.