What follows is a bit of insight on how some lawyers bill their clients, and it derives from a recent lunch meeting I had with the Managing Partner of a small firm in the Greater Seattle area. This senior attorney told me the secret for how he was able to afford to purchase a second home.
Did he use a financial planner? He might have, but this was not the secret.
His secret: Perform one extra hour of chargeable work for one client each day. Assuming his hourly rate is $300 per hour, this results in $1,500 in gross revenue each week, and $6,000 in gross revenue each month.
It's easy to see how you can fund a second home purchase under this revenue model.
This is how some lawyers think about the value of their legal services and billing. Too often lawyers give no thought to the question, "Does this billable hour of work deliver value to my client equal to or greaterr than my hourly rate?" This is especially true for attorneys who work for firms where performance is measured and rewarded by the number of hours billed. In fact, in many law firms, the attorneys are only eligible for a bonus if they meet or exceed their billable hour quota.
So, how can clients use this inside information to their advantage? When you are hiring a law firm, ask how the firm measures and rewards attorney productivity. The "attorney productivity" phrase will likely sound like a foreign language to many attorneys you talk to because most law firms, especially most of BigLaw, only measure and reward billable hours. But, if you want to try to make sure the "billable hours" your attorney charges you are not designed to fund his or her second home purchase, ask the question: "How do you measure and reward attorney productivity at this firm?"
Copyright 2012 | Mark D. Walters | All Rights Reserved