Billing system which puts a value on a lawyers time, irrespective of whether the lawyers used his/her time well or provided any value for that time, puts many of the wrong incentives in play for the lawyer. The lawyer’s incentive is to take more not less time what does the lawyer care. He/She gets paid for every hour irrespective of whether or not he/she is efficient, productive or focused. Since the lawyers business model is built on generating hours irrespective of others factors, the lawyers incentive is to drag a matter out rather than bring it to resolution which cuts off his/her revenue stream.
A great feature of our virtual worker program is that we have workers available at most every billing level. Because we work on a max budget, the incentive is to push tasks down to the lowest competent billing level in order to get more done for the client in less time. The virtual worker makes the budgeting process easier. The fact that workers are available at lower billing rates, has the potential to bring the overall budget down for the client.
In a way, we also put a value on tasks, as opposed to people. More complicated tasks like determining what strategy will achieve the client’s goals are accomplished at higher billing levels. Basic research, document summaries and the like are accomplished at the lowest billing level. Drafting and other tasks involving the execution of strategy are accomplished at a billing level somewhere in the middle.
But today I am wondering about further refining the system. Should there not only be an incentive to value tasks and assign them, but an intrinsic value to the task itself. Lets face it, I sometimes doing tasks that are relatively easy and require less thought. Shouldn’t those tasks be valued less than my more critical tasks? In a way, I account for this with my zero billing rate method. Main tasks that I do in the day are really administrative. I bill those out at a zero rate meaning it costs the client nothing. When I travel for a client, I have a travel rate which is approximately ¼ my normal billing rate. While I’m traveling, I try to do other things for other clients, again at low billing rates because I’m not sitting at my desk where I can truly provide value in order to make up the difference. Again, I’ve provided myself an incentive to do more than accumulate hours.
As I move forward in my law firm, I am more and more focused on letting tasks become the true focus of billing. While a task-centric system is more complicated then simply logging raw hours, it provides more of the right incentives for the lawyer and drives value for the client.