Wednesday, November 17, 2010

A lesson on billable hours

A disclaimer: this one isn't funny, but will give you some basic insight into my job, if you're interested in knowing.

It is an ever itching topic for attorneys and paralegals alike - billable hours.

Attorneys typically are paid one of two ways: (1) a meager base salary and a percentage of all billable hours they collect (hours they bill AND the client pays for); or (2) a percentage of what they collect only.

Paralegals are usually paid hourly or salary, and their bonuses are based on their paying billable hours.

Those attorneys and paralegals who consistently fail to meet the billable requirements are fired.

Both attorneys and paralegals have a huge drive to increase and maintain high billables because they want more money and they want to keep their job.

Time spent on administrative work (copying, reception duties, mail, and other secretarial duties) and on contingent cases (cases that pay the firm a percentage of the money awarded only if the client wins) do not count towards your total billables.

My law firm requires huge billables. Here is the math:

Requirement:

Yearly: 1800 hours
Monthly: 150 hours
Daily: 7.5 hours

Now, those requirements don't seem terribly difficult to achieve, except you need to also consider the following:

About 15% of my cases are contingent cases, so those do not count. I spend about 20 hours per month on those cases.

Administrative tasks end up costing me about 20 hours per month. Which include 2 hour case review meetings every week or every other week.

So now, I really have to bill 190 hours per month (2280 per year, or 9.5 per day).

My salary is based on 8 hours per day, meaning that the firm needs to pay me, and I have to work 1.5 hours extra every day to meet the minimum requirements (which is approximately 16.5 hours extra per pay period).

Now, if I were to exceed the requirements, I would increase my bonus that much more. If I cut back on 0.2 administrative hours each day (12 minutes), I could increase my billable hours by 4 hours each month or take a half day off each month without cutting into my billables.

Now you see just why I get so cranky with Secretary X for wasting my time because she's not willing to do her job and for complaining about how overworked she is. She doesn't have to bill her time, so it is no big deal to her, and she doesn't have to work 10 hour days to keep her job.

I'd like to switch places for a month and see how that works out for her. Maybe she would appreciate how underworked she is in comparison.

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