Ron Baker is Wrong 3

Greg Kyte is the self-proclaimed “Champion of the Dissenters.” This is his third entry explaining why I’m wrong about VeraSage’s Quest to bury the billable hour and timesheet.

I have to admit, he’s starting to make a compelling point, causing me to rethink our entire approach. Perhaps there is a place for billable hours and timesheets?

Oh, Ron Baker, your naivety is so cute—the way that you regularly promote the fabrication that billable hours and timesheets retard people’s creativity. So untrue; so precisely wrong.

On Friday, an audit manager at my firm had an inspired proposal to boost our firm’s profitability. One of our clients with whom we have a 25-plus-year relationship has been required by its lender to have its financial statements reviewed rather than compiled for 2010. My colleague invited the client to lunch to discuss how this new requirement will affect them. We paid $60 for the three of us to go to lunch for an hour and a half, and—here’s the inspired part—both the manager and I billed the client for our hours. My rate is $200 per hour. My manager’s is $150. Ron, we just sold a $20 chicken marsala for $525! That’s a 600% return! That’s beyond a “fist pump price”; that’s a pelvic thrust price!

I know you won’t believe it, but this plan was hatched without any Google time. The creative force was the fact that she was ten hours behind her billable hour goal. The billable hour: a wellspring of creativity!


  1. Why not just take the entire office to lunch meetings and bill the client $15,000 for the hour? Heck, one would be negligent if he didn’t also bill for the chicken. Unbelievable!

  2. John Chisholm says:

    Very impressive Greg but really nothing new- law firms have been doing this for years.

    Did hear a very original way of increasing firm revenue (more important than this profitability rubbish Baker goes on with) the other day though.

    Poor firm had suffered a little with the GFC [Global Financial Crisis] last year-sacked the tea lady,supplemented the chocolate bikkies with crackers, refinanced the flower arrangements in the foyer, sacked some near death partners, made no promotions, and froze lawyer salaries(those lawyers still left that is). In short cut their costs to the bone (again much better to cut costs than try and find better business that Baker rabbits on about).

    Well in 2010 business started picking up again (in spite of the firm) and those employed lawyers still left are now billing out at 25 hours per day so they put their hands up for back pay and increased pay.

    Now in years gone by to compensate for annual increased expenses of 10% the firm had simply put their hourly rates up by 20-30% (you can see I am not an accountant but even I can work out this will do it) which clients gladly paid.

    Well something has happened this year though. Clients said “no way you are not increasing your rates”. Faced with imminent doom and devastation(“what next get rid of the mistress-we must find a better way”) partners got together for a red wine infusioned planning day/night and came up with this absolutely ingenious way to guarantee future financial success of the firm for eons.

    The law firm partners reasoned like this:
    “whilst the clients said they would not cop any increases in hourly rates they didnt say they wouldn’t pay current hourly rates. Now even though current lawyers are billing 25 hours per day even we recognise there is a limit to what we can record on our timesheets. Us few partners left bill out at $700 per hour (because we are worth it) and yet we are struggling to get any more than $350 per hour for our associates (they are actually not even worth that but we dont want to hurt their feelings). But what if (boy and here is the real genesis of innovation that makes Bakers value pricing look as genuine as Tiger Woods marriage vows) we appointed more partners and billed them out at $700 per hour?
    We dont want to go to the trouble and expense of laterally recruiting new partners so as from tomorrow we are going to promote every lawyer in the office to partner status ( we would appoint the receptionist and driver too to partnership if we can find away around those obsolete Practice Rules) notwithstanding their age,ability, or golf handicap.
    Its a win win for all. We can charge everyone out at $700 per hour and clients wont mind as they are always saying to us they would prefer to deal direct with a partner and not be fobbed off to an associate.”

    Brilliant isn’t it! Ron Baker eat your heart out. Once again the billable hour comes up trumps.

  3. Garry Beavis says:

    I’m not sure if this is an ongoing parody or if I have crossed over to a parallel world where the ludicrous is the norm.

    Greg appears excited about his 600% return but why couldn’t this have been 6,000% or 60,000%. His client may have gained significant value out of this meeting which on an annualized basis may account for hundreds of thousands of dollars in savings or opportunities.

    But I guess if you’re focus is on recovering some abstract hourly rate that bears no resemblance to any value you might provide then you’ve possibly left more than chicken bones on the table!!

  4. Matthew Tol says:

    Surely this is a joke!

    Mind you, we’re talking about auditors who are renowned for their lateral thinking and creativity.

    I particularly liked the motivation quoted. Inspirational stuff.

    Oh well. I’ll get back to adding value.

  5. You’re all nuts. If you went to Subway you could have had like a 1000% ROI. And even better — “forget your wallet” so your client picks up the tab. That’s infinite wealth gentlemen.

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