This blog post epitimizes exactly what is wrong and unethical about billing by the hour: “Lawyers Waste $80,000 a Year Reading E-mail“
Ed Poll, the consultant quoted in the article, says:
Based on personal experience, it is easy to estimate that most lawyers take about one or two hours each working day to ‘clear out’ their e-mail boxes. If we assume 200 workdays per year (there are more), and two hours per day and $200 hour billable value for an attorney (most are charging more today), the calculation is $80K of wasted billable time annually….lawyers are going so fast doing so many things, that they don’t actually write down their time notation as they’re working on e-mails….The result is lost profitability.”
Larry Bodine says Mr. Poll is “spot on” about the profitability loss, and he goes on to tell his own ‘rip-off’ story about being unfairly charged by a fellow attorney.
But lawyers must be very careful how they invoice clients for emails and voicemails.…I left [my] lawyer a short voicemail saying that I wanted to make a change in my corporate structure. A month later I got a separate bill from the lawyer for $102.15 for listening to my little voicemail and delegating the work to a paralegal.
So I mailed the bill back with a letter saying, “With all due respect I think the charge is excessive and I courteously request that you write the charge off. In my practice, I listen to voicemail and read emails at no charge; the time is built into the overhead of my practice.
The lawyer wrote me back that billing for voicemails was a policy of the firm, and if I didn’t like it, I should find a different firm. So I did. I stopped using that firm, and 5 years of goodwill from the old firm went down the drain.
With due respect to Mr. Poll, taking time to read and respond to e-mail, recorded on a timesheet or not, is NOT the cause of lost profitability.
The cause of lost profitability is the invalid association of time spent with value provided through the interaction. Larry Bodine’s example illustrates perfectly the exact problem. Had his attorney worked with Larry to agree upon a price both could be happy with for achieving Bodine’s objective, a $102 voicemail charge would never have been an issue nor would the loss of a 5-year relationship.
Why is it so difficult to get people—especially people with high intellectual capacity—to understand the poison, the cancer, that tracking and billing time is causing in the professions?
Bodine is articulating the problems with it, himself! Further, his comment, “But lawyers must be very careful how they invoice clients for emails and voicemails,” is exactly right. And why is it necessary to “be careful”? Because you cannot break the time out without angering the customer, and you cannot “bundle it in” with other time, or you are being dishonest—it crosses an ethical line to bundle that time in with something else.
So, what’s the right thing to do? Don’t look at it as a 5, 10 or 60 minute mishap or inconvenience that needs to be specifically caught and recovered! Look at the communication as a necessary part of the big picture project and price it reasonably to begin with!