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4. The anomaly of the
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six-minute minimum
No matter whether time is recorded on a daily basis or a task basis, a one-minute phone call that is the only task on a given day will always be charged at a minimum of six times the time it actually took. (Unless the lawyer chooses not to bill for the call at all, but don’t count on that.)
And the reason is that six minutes is the lowest increment of time that can be recorded using the systems under which almost all timekeeping lawyers operate.
Likewise, a seven-minute phone call that is the only billable event on a given day will cost twice as much as a single six-minute one — $60 versus $30, if the hourly rate is $300. In other words, the extra minute over the first six will be charged as a further six minutes.
This does not quite square with the notion that hourly billing is all about charging clients for what they receive in a simple, linear manner. Far from being transparent, the system of recording time in one-tenth increments of an hour actually has an inherent distorting effect — one that results in clients paying for more time than they actually receive.
One could, in theory, devise a timekeeping system that allows increments of as little as a minute. However, I am aware of none that is out there. In practice, the decimal system devised by Reginald Heber Smith — see Chapter 2 — reigns supreme.
Six-minute minimums and task-based reporting
The anomaly of the six-minute minimum is magnified when time is recorded by the task, rather than the day. If a lawyer makes 10 separate two-minute telephone calls, each of which has to be recorded and timed individually, the lowest amount of time that can be recorded is 60 minutes. This is because each call would be charged at 0.1 hours (i.e., six minutes), even though it only took a third of that amount of actual time.
Thus, clients who demand that time be broken down to the maximum extent might not be doing themselves any favors. Unless lawyers choose not to bill for some calls, they have no option other than to bill 10 times for 0.1 hours in that example.
I suppose that a lawyer could batch the separate calls as a “single task” — but that really gets away from the premise of task-based timekeeping. The lawyer who labors under that type of timekeeping regime doesn’t have much incentive to depart from it on an ad hoc basis simply in order to keep the bill down.
Lawyers who work with daily totals, by contrast, could put down 0.3 hours for the 10 calls combined — corresponding to the actual time, 20 minutes, that they took.
However, some lawyers who do report daily totals would still end up charging 0.1 hours per call, resulting in the charge of one hour. In other words, even if they are not required to report times for each task, they might still choose the task-based counting method if it makes for a higher total for the day.
This is especially likely to occur if the calls are made over the course of a day, with other tasks occurring in between. And it is all the more likely to occur when there is a general “pressure-to-bill” culture in the law firm.
Is all this talk about minutes petty?
Some readers may be wondering whether it is all a bit petty to fixate about extra minutes being charged here or there. And, at some level, going on about this does lower the tone of the practice of law. But those minutes add up. Lawyers who rack up 2,200 hours of billable time a year do not get there by being loose with their minutes — they try to grab every one that is available.
It is the legal profession, not clients, that has started this. By choosing to make a system of counting minutes central to the practice of law, the profession invites scrutiny about how those minutes are actually recorded. It would be unreasonable to chide clients and commentators for pettiness in questioning lawyers’ counting protocols, when it is the lawyers themselves who began the process of obsessing about minutes.
The British “unit” alternative
In Britain, timekeeping lawyers have come up with a way of dealing with the awkwardness of the six-minute minimum. Rather than bill time in “minutes,” as such, they bill it in “units.”
However, this amounts to exactly the same thing. That’s because under the British system, one “unit” is equivalent to six minutes. So, although the two-minute call would be billed for “one unit,” not expressly for “one tenth of an hour,” it is, in effect, still a charge for six minutes of the lawyer’s time.
From the lawyer’s point of view, presenting the bill in “units” means that one is not expressly levying a six-minute charge for a two-minute call. It seems better from a presentation perspective — even though, substantively, it is the same.
But I’m not sure I would advocate going over to the “units” system. It seems nothing more than a method of papering over the billing cracks.
Entire contents © 2008 John Derrick