9. Billing for thinking
The under-appreciated brilliant hour — discussed earlier — is not the only example of how hourly billing can operate to a good lawyer’s detriment. Another is the fact that time spent thinking can often fall between the cracks and go uncompensated.
Action versus reflection
It is rare that the verb “think” appears on lawyers’ bills when they account for their time. That is not to say that most lawyers do not think as they act, but there is often a sense that “thought” on its own isn’t something that clients want to pay for. There is a tendency, therefore, to stress words that connote action rather than reflection.
Thus, it is rare that a lawyer who bills by the hour comes up with a billing entry that read something like:
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“Thinking. 0.3 hours.”
Rather, time entries tend to detail actions, as opposed to contemplation. For example:
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“Letter to…”
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“Draft document…”
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“Review document…”
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“Appear at…”
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“Prepare for…”
Of course, time spent thinking can be dressed up in terms that connote action. For example: “Prepare for oral argument,” rather than “think about what to say at oral argument.” (One lawyer who read a draft of this book told me that he uses “analyze” as his preferred term for thinking — but that word may not be sufficiently action-oriented for some.)
But why do lawyers so often feel obliged to engage in that type of window dressing? Thinking is a huge part of a lawyer’s job. Who wants a lawyer who doesn’t think hard about a client’s case?
The answer probably comes down, at least in part, to billable hours. Clients are suspicious of the ticking meter. The notion that it is ticking away when a lawyer is not actually “doing” anything makes people feel uncomfortable. There isn’t enough accountability.
How much “thinking” should start a meter? How does one separate out “thinking” that advances the client’s case and “thinking” in the sense that one is simply reflecting on the task at hand (e.g., worrying about the amount of work or planning one’s day, as opposed to, say, mentally drafting a legal argument).
Where exactly — and under what circumstances — was the “thinking” taking place? And was the time spent thinking recorded immediately, or is the lawyer relying on a recollection of the thought process?
Time in the shower and riding your bike
Personally, I quite often find myself thinking hard about a client’s case in the shower or while taking a bike ride or in other contexts far removed from a traditional law office setting.
I don’t generally bill by the hour, so the issue of whether to charge for this time does not arise with me. But what if I did? I suspect that clients would have a problem paying for shower time. But if I didn’t charge for this, I would be “giving time away” — which is what the hourly timekeeper isn’t meant to do.
Obfuscation about thought
Of course, the lawyer can get around the “shower time” issue by simply not reporting where the thought takes place. But there is still the problem about simply reporting “thinking” as the activity, regardless of the location. Hence, the thought process in the shower — if it is to be compensated at all — will end up being billed vaguely as “preparation” for whatever activity is at hand or will be merged into some overall description of a day’s activity.
That way, the lawyer gets paid. But the payment relies on obfuscation. And, for billing purposes, obfuscation is the opposite of transparency. So, once again, the “transparency” argument that is trotted out to support hourly billing is found to be at odds with what actually occurs in practice.
And something is surely wrong when “thought” — which is at the core of a lawyer’s work — is something that a practitioner is embarrassed to admit to.
Multiple meters
One of the most thorny issues concerning “billing for thinking” occurs when lawyers in the same firm spend time caucusing in collective thought. Clients do not always understand the value of brainstorming and frequently complain when billing entries appear from multiple timekeepers indicating that they were “conferencing” with one another.
Their skepticism is enhanced if the conferencing lawyers record different amounts of time. The fact that lawyers can report different lengths for the same event speaks to the imprecise nature of time recording generally. It does not inspire confidence. Inconsistent time entries ought to be corrected when bills are reviewed prior to being sent out, but sometimes aren’t. Of course, discrepancies will be hidden if the conferencing time is part of a batched daily total that also includes other tasks. That daily total can cover up a multitude of things.
In any event, sensing client resistance to paying for lawyers in a firm to talk to one another, attorneys often try to find creative ways of dressing up their descriptions of the powwows in which they engage. Anything to avoid use of the tell-tale word “conference.” Again, so much for transparency.
The price of brainstorming
There may be much value in brainstorming, but it is also very expensive. It’s bad enough with two lawyers’ meters ticking away, but a third or fourth can really result in shocking bills — the thoughts that come out had better be good for the amount that can be charged. Yet the value-per-lawyer tends to go down the more that are involved, with some participants having only marginal input.
On the other hand, not to brainstorm seems wrong in itself. If the ticking meter chills creative thinking, the billing system is getting in the way of the job.
So I don’t know what the ideal solution is. I am not an advocate for hourly billing, and I certainly don’t have a solution to all its difficulties — other than simply discounting the bill when a 30-minute conference seems ridiculously expensive in retrospect. My preference would be not to bill by the hour so that these issues don’t have to be addressed.
Time spent delegating
Keep in mind that “together time” between lawyers isn’t always focused so much on brainstorming as on giving direction. This can be also useful — for example, 20 minutes spent by a senior attorney in conference with a junior colleague can give focus to the latter’s effort and avoid hours of wheel spinning.
Arguably, however, the delegation of a task from one lawyer to another is an internal, administrative function relating to a firm’s resource management for which the client should not be charged — or, at least, for which only one lawyer’s time should be charged. It isn’t the same as brainstorming where multiple lawyers all add value. However, as throughout this analysis, there can be gray areas.
Wrapping up thought
Wrapping up my thoughts in this chapter about thought, I am of the opinion that lawyers should be compensated for productive thinking — whatever the billing method chosen. That applies whether the thinking is done alone or by brainstorming with colleagues. (That said, some thoughts are, of course, more worthy of compensation than others.)
My concerns are that with hourly billing, thought becomes a line item on a bill — rather than simply being part of the essence of the service — and that the lawyer has to deal with gray areas about which thoughts are billable and often then feels a need to disguise the process of thinking as something else.
In addition, it is much harder to record the duration of thought in an objective manner than it is to record time devoted to actions. Thought can be fleeting. It comes and it goes. A client has to have considerable trust in a lawyer to accept uncritically a line item on a bill devoted to thought alone.
Moreover — as I indicated at the start of the chapter — the whole thought issue often works against the hourly-billing lawyer, as, in practice, thinking time frequently does not get recorded. (Although some might say that this is the system’s way of compensating for ways in which other time gets bloated.)
So the concerns about arbitrariness, vagueness, and obfuscation that run throughout my analysis of the billable hour are present here. There are better ways of being compensated for thinking than running a meter.
Entire contents © 2008 John Derrick