Last month, I wrote a New York Times op-ed that discussed the billable hour regime and its unfortunate consequences for the legal profession. The piece generated a lot of response, most of which supported my theme. Readers generally agreed that the system rewards unproductive behavior, invites abuse, and pits attorneys’ financial self-interest against their clients’ goals.
Defending the Billable Hour
Even so, the Times published a letter to the editor in which Alan B. Moldawer, executive vice president and general counsel of Veolia Transportation—“the largest private sector operator of multiple modes of transit in North America,” according to its website, with transit and rail management contracts in such cities as San Francisco, Boston, and Miami—responded to the article by defending hourly billing. In his letter, Moldawer noted that alternatives to the billable hour “have not caught on because they do not allow the client the same opportunity to see the work as it is being done, evaluate its worth, and challenge when appropriate the relationship of time, task and cost.”
That alternatives haven’t caught on isn’t theoretical, but his argument for why is. It’s true that the billable hour system arose from a desire for greater transparency. Before it gained widespread use, clients typically received a bill that included a single line: “For services rendered.” When today’s senior partners entered the profession, firms kept track of their time but didn’t impose mandatory minimum billable hour requirements. In fact, a 1958 ABA pamphlet recommended that attorneys maintain better time records and strive to bill clients 1,300 hours a year.
Unfortunately, transparency gave way to behavior that focused on maximizing profits in the short term and distorted the billable hour into an internal law firm measure of “productivity.” Quantity of time billed became more important than the quality or effectiveness of the effort expended. Today’s required annual minimum hours typically run close to 2,000—and most associates understand that enhancing their prospects for advancement requires many more.
