Commentary

Open Letter From Dentons Partner Says Firms Need to Rethink The Billable Hour

Jana Cohen Barbe is a strong advocate for the role of women in law. She was the first woman appointed to Denton law firm’s global board and also Dentons’ first global vice chair appointed from the U.S. region. In this open letter to colleagues, she argues that the law profession needs an urgent rethink of the billable hour and to also rethink the performance metrics to track compensation for lawyers.

Dear Friends and Colleagues,

The consensus is that there is a mental health crisis in the legal profession. That is no doubt true. High-profile suicides, admissions of substance abuse and addiction, and wholesale exits from the profession plague and torture all of us who still hold onto the view that ours is a noble and worthwhile vocation. And we have responded by hiring wellness coaches, retaining therapists, hosting programs on resiliency and teaching meditation techniques. All of these measures are worthwhile and important and constructive.  But they also fall short, treating the symptoms but not the cause.

To be clear, anyone who has suffered physical and mental illness knows the importance of treating the symptoms. But we also know that to end the symptoms, there must be a recognition of the cause and a plan to address it. I now ask each of you to consider the causes of our collective hurt: our business models, our compensation systems and the almighty billable hour. And I ask each of you to consider how we can best address this.

If we want to improve the shared mental health of our profession, we must change our incentives. We must change how we practice law at law firms today.

For the most part (and accepting that generalities are always dangerous), billable hours and revenue generation are the two key metrics in how law firms compensate attorneys.

Time sheets are the bane of our collective existence.

Bonuses are paid even to our youngest professionals for the achievement of billable-hour benchmarks. Partners, including the most senior, also have billable-hour targets and their compensation may rise or fall with the achievement or missing of those targets.

Time sheets are the bane of our collective existence. (I long for the day when my self-worth does not fluctuate with the recording of my time. How many of you feel similarly?)  Many clients hate them too and recognize that the billable hour can incentivize and reward inefficiency.

And yet, day-in and day-out, we record our time and know that our value as professionals is keyed, at least in part, to annual billable hours. The pressure then—to work seven days a week, to miss family events, to forgo vacations, to miss needed doctor’s appointments—cannot be overstated. If you are like me, you feel guilty taking a Saturday or Sunday off, and it takes several days to let go of the guilt and begin to feel the relaxing effects of a vacation.

What would happen if we de-emphasized the billable hour or did away with it completely, sizing our fees to projects undertaken and rewarding efficiency in performance? What would happen if we fostered a culture where vacations were mandatory and professionals were instructed not to check email while out of the office?

Why do law firms cling to a business model that we have known for decades is both antiquated and destructive?

I posit that our workforce would be happier, our clients would be happier (and also institutionalized to a far greater degree) and we could still pay the proverbial rent.

It is undeniable that change is hard; it is also undeniable that change is necessary.

In our largest financial institutions, employees in sensitive positions are required to take two weeks’ vacation. It is done to prevent fraud—to ensure others are reviewing the books and the activities of the individuals in specified roles. It has the added benefits, though, of demonstrating that no one person is indispensable to the business and of acclimating the institution to absences of key personnel.

Why should our profession function any differently? Mandatory vacations would discourage “silos” and “client hoarding,” and would foster the institutionalization of clients much like sabbaticals do. It would also facilitate quality control, with multiple professionals handling a file or a client. And maybe most importantly, it would demonstrate to each of us, me included, that we are not indispensable, that our firms will survive without us, and that the pressure to outperform is unhealthy and unnecessary.

It is time to modify our performance standards and, in turn, our compensation systems to encourage sensible levels of productivity and the institutionalization of clients. Consider paying a bonus when work is shared among multiple partners, with a team being the goal and teamwork the behavior rewarded, rather than a “big book” controlled by one individual. And let’s not penalize people for working “regular” hours or viewing that as a weakness. It is not a weakness to want balance in our lives.

It is also time to partner with clients on staffing models that work for everyone. The “boundary” of a family event, or vacation18, or illness will be respected when we do a better job of educating the client that there is an entire team positioned and capable of handling their concerns. It should be possible to negotiate a fixed fee with bonuses for efficiency and results, and for that to be profitable for the law firm and desirable for the client. It is not even that hard; it simply requires the will to change and to think differently. And dare I say it, perhaps the willingness to earn a little less.

I am tired of seeing our best and brightest suffer from the pressures we create by our own incentives. I am tired of watching friends suffer. I am tired of seeing good partners, talented associates and top-notch staff fight each other and fight their own worst impulses—because that is, most fundamentally, what our industry is motivating them to do.

I know we can change and thrive. Let’s transform our profession into one that encourages and fosters mental and physical well-being and that views both as utterly compatible with productivity, performance and profit.

Sincerely yours,

Jana Cohen Barbe