Billable or Nonbillable—How Many Kinds of Time are There?

Billable or Nonbillable—How Many Kinds of Time are There?

Law firm lawyers live by the billable hour, but there are many other types of hours—not all of them billable—expected of you by the firm. In addition to performing work for clients, partners (and aspiring partners) also must squeeze into their busy workdays other essential functions such as attorney training, mentoring and development, client development and promotion, firm and practice group leadership and administration, community involvement, and many other activities. A wise lawyer keeps track of all work time—billable and non-billable—at least informally, for time management, planning, and career development purposes.

 

Billable Hours

The primary requirement of each attorney’s work time is, of course, racking up massive amounts of billable hours—legal work performed for clients for which the firm gets paid. Under most law firms’ business models, billable hours are the engine that generates the income stream that keeps the firm in business. It is a mistake, however, to emphasize billable hours to the exclusion of other important—and time consuming—objectives.

 

Non-Billable Time

Billable hours are essential for immediate business objectives such as covering the firm’s payroll and bills and making distributions to partners. But, thinking long-term, a firm’s future is dependent on the wise investment of its attorneys’ non-billable time. Most firms pay little attention to non-billable hours and don’t require their attorneys to keep track of that time.

However, an oft-quoted business maxim says, “What gets measured gets done”. The origin of this saying is unclear (it’s been attributed to several management gurus) and its exact wording varies (alternative versions include “gets improved” and “gets managed”). But, regardless of its source or wording, its message is clear: measuring something gives you the information you need to make progress towards your goal.

If activities that comprise non-billable time are important, and the firm wants to promote those activities, it’s advisable to track—and possibly reward—them. (The corollary to the above management maxim is “What gets rewarded gets repeated”). Even if the firm does not require you to log non-billable time, you should keep track of it for your own purposes. You might be surprised to learn what you really are doing with your time and may find ways to be more efficient and productive.

According to the leadership at the regional California law firm of Hanson Bridgett, there are two types of non-billable time:

  • Investment time - activities such as leadership, bar association and firm-related civic activities, client development, professional development, promotion, and attorney development.
  • Overhead time - all other necessary daily activities such as maintaining your calendar, reading the mail, visiting with office colleagues, collecting your thoughts, attending firm functions and the like.

 

Investment Time

Hanson Bridgett identifies five broad categories of investment time:

  • Leadership and firm administration - law firm leadership and management duties such as executive committee membership, section head/practice group leadership, and committee work;
  • Client development and promotion - activities that enhance client relations such as marketing, participation on client teams, and business development activities;
  • Attorney development - training and mentoring associates, and supervision of delegated work;
  • Bar and civic activities - participation in firm-approved pro-bono matters, bar and civic organizations and other activities that contribute to your firm’s name recognition and enhanced reputation in the legal and business communities; and
  • Professional development - compliance with MCLE requirements, and efforts to expand your personal skills, business acumen, and professional expertise.

 

Innovation Hours

The global law firm Reed Smith identified yet another area of investment time: “Innovation Hours.” In 2017, the firm initiated a program whereby its lawyers earn billable hour credits for time they spend promoting advances in legal technology and operations. During its first year, 17 Reed Smith lawyers dedicated 364 hours to six selected projects. The firm approved even more projects in 2018 and selected five particular client-facing endeavors for added support. The firm was so pleased with the results of this program that it expects to approve increasing numbers of projects each year going forward. By giving billable hours credits, Reed Smith sends the message that it wants its attorneys to have the time to think things through and be rewarded for doing so.

 

Career Development Time

Think of your non-billable work hours as career development time and spend them wisely. To advance your own career, devote at least half of your non-billable working hours to investment time activities that promote the future success both of your individual career and your firm’s bottom line. Ideally, when you prepare for your annual performance and compensation review, write a plan for spending your individual investment time during the following year. Include specific activities and time tables. These kinds of activities often are included in your business development plan, anyway, which you should be updating annually as part of your review. Even if you are not yet a partner, you need to start thinking about bringing in clients. Smart use of your investment time now lays the groundwork for successful rainmaking later.

Whether you already are a partner, or are aspiring to advance to that status, coordinate with relevant section heads and practice group leaders to get buy-in for your investment time plans to ensure that your goals align with those of your firm. This provides a roadmap for you to follow to make the best use of all of your time for the benefit of you personally as well as for your firm.

Valerie Fontaine

Valerie Fontaine

Valerie A. Fontaine earned her JD from UC Hastings College of Law and her BA, Phi Beta Kappa and magna cum laude, from UCLA. She was on the Editorial Board of COMM/ENT, a Journal of Communications and Entertainment Law. Valerie practiced law with a prominent Los Angeles law firm and entered the legal search profession in 1981. Valerie serves as Secretary to the Board of Directors of the National Association of Legal Search Consultants (NALSC).
Valerie Fontaine

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