What exactly is a billable hour?

attorney fees
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Anyone who is familiar with attorneys has heard the term billable hour.  For a defense lawyer a billable hour is a way to measure productivity.  For many attorneys at large firms a billable hour is the means to reaching a goal that will earn them a nice bonus at the end of the year. For a small plaintiff’s attorney, a billable hour relates directly to gross profit. But what exactly is a billable hour to an attorney's client?

While there is no strict guideline on which kinds of work get billed to a client, the Rules Regulating the Florida Bar contain rules that govern how attorneys bill clients.  Rule 4-1.5(a) states: “An attorney shall not enter into an agreement for, charge, or collect an illegal, prohibited, or clearly excessive fee or cost . . .”  That’s great, and the Florida Bar even gives a little more guidance to clarify what a “clearly excessive fee” is.  What they don’t mention is what work or activities should be included in a billable hour. So, what are clients actually billed for, and why are attorney’s hourly rates so much higher than many other professions?

While I can’t speak for all attorneys, I can tell you as an attorney who just opened his own firm, Pinellas Family Lawyer, PLLC, it is necessary for me to wear many hats.  I work as a small business owner to develop marketing and create content for my website. I work as an accountant, keeping a records of profits, losses and an accurate accounting of client funds held in trust. I act as my own attorney in making sure I comply with advertising, banking, and other professional regulations. I do all of these jobs in addition to acting as an attorney for my clients where I finally get paid for “a billable hour.”

Before becoming a family law attorney, I felt like I needed to have every answer to every possible question before I could charge a client for my advice on a topic.  But, the fact is that’s just not possible.  I do however feel I owe it to my clients to be as knowledgeable as possible about any matters I may have to assist them with, whether it be a divorce or a contract dispute. This has led me to the dilemma of trying to figure out which aspects of my time should a client be paying for.

Obviously, you can’t know every law and every important case decided about that law, but I feel like clients expect you to. And guess what, some attorneys who have been in practice for 20 years or more do know a lot of those things.  That’s also why more senior attorneys can charge 2 to 3 times what a junior attorney might charge.  A junior attorney will probably have to take more time to research cases in order to best explain to a judge why their client should prevail.  They will both get the job done; a senior attorney might just get it done a little quicker and a little easier.

I don’t bill my clients for the time I spend getting a better understanding of general law and procedures.  I don’t think a client should have to pay me to learn how to do my job. What I do bill for are things like the time I spend researching a specific case that applies to my client or drafting a document necessary for my client's case.  A client pays for any time spent dealing with their specific issue; the work I would not have done but for the employment of the client.  That's what a billable hour means within my law firm.

Not everyone may agree with this definition, and undoubtedly there will always be an occasional client that thinks they shouldn't have to pay an attorney to answer an e-mail.  However, just look at all the other work an attorney has to do before ever even getting to the point of focusing on an individual client's case.  Attorneys spend years of their life studying the law and how to apply it.  Many attorneys rack up over six figures in student debt to pay for that knowledge.  Attorneys also keep up with professional licensure, which includes ongoing training as well as yearly dues.  And, if they’re like me, they also have to spend time and money making sure clients know how to find them.  On top of that, attorneys are friends with other attorneys, or at least know a few.  I often discuss cases (in hypotheticals of course) with friends and get their input on the best course of action for my client. This isn’t something I bill my clients for.  For me, it’s just a dinner with friends.  For my clients, it’s an added value that helps me be better at my job.

In short, being an attorney requires lots of training, takes a considerable amount of time and money, and it is not easy.  So, next time you get a bill from an attorney for the 6 minutes (or .1 billable hours if you're a lawyer) they took to answer an email, remember what it took to even be able to write that email.

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