Lawyers Who Bill By Units, And Their Billion Dollar Rip-off.

I’m sure you’ve all heard the expression, that “a one eyed man is king in the of the blind!”, which is pretty much what this short article will be about – information about how you are being needlessly overcharged by greedy self serving lawyers and accountants who get fat on the sweat of the poor. You’ve probably guessed at this point that I don’t hold lawyers or accountants too high in my esteem, not because of the work they do (let’s face it, most especially in the legal profession, the words and syntax used is principally maintained to keep the layman in ignorance without the aid of a legal translator), but because of the charges they make, and in particular this non-sense with regard to billable units. And if you’re not familiar with how this works, be prepared to be shocked at what follows.

Here in Australia, a good lawyer will charge out anything from $350 to perhaps upward of $750 per hour for their precious time. But that’s not what this article (nay rant) is actually about. No, it’s not the dollar value per hour that’s outrageous (although you’d have to be pretty damn good to charge the top whack), but the fact that billable time is rounded up into units. Not long ago, this used to be units of 1/10 of an hour. That’s to say each unit was the equivalent of 6 minutes. Now however, greed has raised this to 1/4 of an hour or 15 minute units, which can also be stretched by some individuals to as much as 30 minute units or even a 60 minute unit in some cases.

In real terms this means that if you phone your high flying $500 lawyer who bills in 15 minute units (and let’s face it, if you have the money and you’re at war with someone, then getting the best you can afford is better than scrimping to save money) to arrange a meeting for the following week, you may only be on the phone for a minute – and yet you will be charged a full unit of time ($125). Why you might ask, given that you’re not preventing your lawyer from working on other jobs after the phone call has ended? Well, the short answer is greed. You see, by having fixed billable units, say in 15 minutes blocks, means that an average lawyer has the maximum potential to earn 864,000,000 a year. Yes, the figure is correct, just about 1 billion dollars a year (48 weeks, 5 days, 8 hours/day, 60 mins/hour 60 seconds/min and $125 per unit).

Now how can this be? How can any single individual alive today say their work is worth a billion dollars? Remember there’s nothing being produced here that can save children dying in Africa, there’s no new patent for a wing-ding widget – in fact there’s very little IP content for the money being outlaid.

So what can be done to combat this astronomical abuse of power? Well the first thing is to insist your lawyer uses a descent automated time tracking software, because one of the key reasons lawyers bill in Units, is because up until the turn of this Century, there was no way for a lawyer to accurately record how much time they spent doing a specific job (timesheets are just too inaccurate as they rely on memory – or if done every 15 minutes become cost prohibited as the time to actually fill them in removes about an hour from the day) – so the time accrued, and the time that goes missing from erroneous timesheet completion, just gets rounded up into one big costly unit (see also the cost of timesheets).

However, with the advent of more powerful computers and a descent operating system (Windows 2000 plus), and the introduction of hands-free time tracking software such as MetriQ, one of the pioneers of the technology and currently the only company to offer both pre-emptive and permissive timing modes, means that time tracking and time capture can be done with incredible accuracy. And given that this type of software no longer requires staff to no-longer complete timesheets, means that from 8am to 5pm, every single second of a lawyers day can be accounted for.

More frightening perhaps is the fact that any lawyer or accountant that bills by the unit, is in effect committing fraud, as he or she is billing more than one client within the same billing period, (double dipping), something deeply frowned upon by the Sarbanes-Oxley Act.

So if you want a good lawyer, insist they use the latest time tracking software (with client locks etc to ensure fraud is kept to a minimum), and insist you are billed only for the time used! The more people that start saying no to this overprices profession, the sooner costs will start to fall back into the realms of reality.