Do Hours Equal Profits?

Because counting hours is such an easy exercise for a firm, it is easy to presume that maximizing billable hours will maximize profits. What is lost on many firms is that a business model which is tied to hourly billing actually "caps" the profits that any firm can make.

Think about it. How many cases have you handled at which you provided hundreds of thousands of dollars in value in very little time? In those cases, was it your brilliance, strategic efforts and experience which delivered the results to the client? Do you think that the hours that you put in to delivering those results is an adequate measure of the value you provided?

The goal of a law firm is not to bill the client the minimum amount possible the goal of a law firm is to provide value and be paid for value received. While counting hours is simple, it hardly measures value. If you are a great attorney in a great law firm that focuses on providing value to clients, then the hourly billing system is leaving you short.

Over the next few weeks, we will be talking about the intricacies of value billing, why clients have no problem paying more than your hourly rate if you deliver results and how to incorporate innovative billing models into your law firm business model.