Beyond the Billable Hour

At the outset we need to be upfront that we hate the 6-minute unit (x hours in a day x days in a year) system of “billables” setting individual budgets for lawyers. We hate it enough that we want to kill it and then kick it around the room for a while. We hate it because it’s become the default measure of the value that law firms place on lawyers, and we hate the message that it sends to lawyers about their “value”.

We get that it’s an easy metric – ‘do and charge’ is an incredibly easy way to get paid. Start the clock, record your time, multiply by your rate and you’re done (more or less). With time being so easy to measure and ‘productivity’, ‘output’, ‘outcomes’, ‘value’ etc being so hard to quantify, it’s no wonder the billable hour is the default option in most law and other professional services firms.

But the billable hour as the only KPI for lawyers is at the core of all things wrong with law firms. It drives poor behaviours like overcharging, and unhealthy internal competition and discourages positive behaviours like teamwork, delegation, collaboration, innovation and efficiency. It’s a lazy metric and a short term only plan for motivating people.

Moving Away from Billable Hours has the Following Potential Benefits:

Reduced Stress and Burnout
Without the pressure to track every minute, you can work at a sustainable pace. This model helps prevent long hours, burnout, and mental health issues.

Quality over Quantity
Focusing on results rather than hours lets you deliver high-quality, strategic work. This shift leads to better client outcomes and boosts professional satisfaction.

Improved Work-Life Balance
Flat-fee or subscription-based models allow firms to manage workloads more effectively. Lawyers are less likely to feel compelled to work late nights just to meet hourly targets, leading to healthier work-life balance and better retention rates.

Greater Innovation and Efficiency
When efficiency isn’t penalised, there’s a strong incentive to adopt legal technology, process automation, and knowledge management systems. This approach makes work more engaging and reduces repetitive tasks.

More Predictable Compensation and Career Growth
Lawyers in firms that rely on billable hours often see their compensation and promotions tied to hours worked rather than results delivered. Moving towards alternative models enables firms to reward performance based on results, collaboration, and client satisfaction, leading to more predictable career progression.

Stronger Client Relationships
Clients prefer predictable costs and value-based outcomes. With alternative billing, you spend less time justifying fees and more time nurturing long-term partnerships.

Enhanced Team Collaboration
Billable hours can create internal competition among colleagues as they vie for high value matters to meet targets. Alternative billing encourages teamwork and knowledge-sharing since lawyers are not penalised for spending time mentoring juniors or collaborating on complex cases.

Attracting and Retaining Top Talent
Modern billing practices appeal to younger lawyers who value well-being, work-life balance, and growth opportunities. This makes firms more attractive and helps lower turnover.

More Engaging and Strategic Work
When lawyers are not constrained by tracking every minute, they can dedicate time to strategic thinking, business development, and creative problem-solving. This makes legal practice more intellectually stimulating and rewarding.

A More Sustainable Legal Career
By removing the relentless pressure of billable hour targets, firms create an environment where lawyers can sustain long, fulfilling careers without sacrificing personal well-being. This shift benefits not only individual lawyers but also the profession.

But Does it Make Money?
Is it possible that by not requiring lawyers to focus on hitting their monthly budget, we have “missed out on fees”? Maybe – if you measure just one month – but not if you measure the value of retaining engaged staff doing great work, and clients seeing the value in what they are paying for.

The ultimate test for us is the success of our business – ConMoto Group celebrated its 5th birthday in July 2024, and in that time, we have grown from a start up to a medium sized firm of 15.

We work with great clients and our professional work is something that we can be proud of. But what we are most proud of is the culture at ConMoto, which is down to the amazing ConMoto crew. We have strategically pulled together, and retained a team of talented, hardworking people who support each other. We wanted to create an environment where people feel valued for their unique skills and contribution because we value their unique skills and contribution. We don’t think that this would have been possible if we measured the value of our people against a budget.

The Why (For Us) …
ConMoto Group started from scratch 5 ½ years ago with 3 staff and a dream to be different to a traditional law firm, a legal business that embraced technology, process automation and knowledge management systems. A legal business unburdened by the baggage that comes with traditional law firms. We could be whatever wanted.

The easy bit was to identify all the things that we didn’t want to be, the harder bit was working out what we wanted to be. We settled on a set of “values” to guide what we do and how we do it. Sustainability, Engagement, Improvement, Practicality. We still run tough decisions past the values check to make sure we don’t slip into being something different than what we committed to be.

From the start we didn’t rely on the billable hour or even any individual billable budget as a metric for our lawyers. We knew how that metric makes lawyers feel – and it failed the test of being sustainable, driving engagement, or an improvement on the status quo. It also failed the threshold of practicality and speed beating perfection and tradition.

The How…
How do you measure staff performance?
Communication, collaboration and trust are key for us. As they should be for every healthy workplace. We recruit with our values in mind because we know that someone who has the mindset that individual billing is the best measure of success won’t be a good fit for us.
We learned early that to make it work, you need to keep up communication about workload and work distribution to make sure that everyone is full up with work. It was easy in the beginning when the team was small, and every new client was celebrated and shown the ConMoto way.
As we have grown in numbers, we make sure we have regularly scheduled law squad catch ups (twice weekly) where we go through what everyone has on. At the outset we set timeframes for when we aim to get work out to clients. We work closely together, and our senior lawyers mentor and supervise our newer lawyers. Not having the billable hour means that our people are encouraged to discuss issues, delegate and distribute work. No one is worried about giving fees away or losing time to unbillable work.

None of this is new or groundbreaking stuff, and the real secret for us is we have a team of people who are excellent at what they do. We focus on keeping people engaged and motivated and we trust our people to work hard and do a great job.
What are the alternative pricing structures for clients?

Imposing time-based recording on all our clients didn’t pass our values test either – yes, we do use time-based recording for billing some clients in some types of matters – but charging by the hour is not the default option when pricing – it’s one of a number of different models that we offer clients.
There are lots of options to pure time-based charging and we are increasingly seeking clients interested in not just buying time from their lawyers, which they see as unpredictable and opaque. Clients can view time-based charging as incentivising inefficiency. It can erode trust and discourage clients from seeking early advice.
Some alternative pricing structures that we are seeing more of are:

1. Fixed or Flat Fees
   Fixed pricing provides clients with cost certainty and encourages firms to work efficiently. It is particularly useful for routine matters such as contract drafting, and regulatory compliance. However, setting the right fee requires careful scoping to avoid under-pricing and having the discipline to identify when work goes out of scope. This requires potentially having difficult discussions with clients but the advantage is that it is often done before the fees are incurred rather than after which is often the case with time based billing.
2. Value-Based Pricing
   This model ties fees to the results or impact of the legal work rather than the hours worked. For instance, in corporate transactions, fees might depend on the deal’s value or include success fees. While this approach aligns costs with business outcomes, it requires careful negotiation because value is subjective—what one client values may differ from another. Often, clients just want the work completed quickly, which can make in-depth value discussions challenging
3. Subscription Models
   Some firms now offer legal services on a subscription basis, giving clients ongoing access to legal advice for a fixed monthly or annual fee. This model fosters long-term relationships, ensuring clients seek legal input early rather than waiting until issues escalate. This is our preferred model as it enables us to take responsibility for the client’s entire legal function. It makes the work more enjoyable when the client isn’t “forced” to engage the legal team as the procurement decision has been made in advance of the need for support.
4. Hybrid Models
   A combination of different fee structures—such as capped fees, blended rates, and success-based incentives—can offer flexibility. Hybrid models allow firms to provide cost certainty while retaining some time-based billing for unpredictable work.

Ultimately, moving away from the billable hour can bring clear benefits for both lawyers and clients.

For lawyers, any model that moves away from time based billing as the primary measure of value is likely to reduce stress and burnout, promote work-life balance – in our direct experience this then also fosters greater collaboration and innovation between team members.

For clients, reducing the reliance on time based pricing means more predictable costs, enhanced transparency, and a focus on building long-term, trust-based relationships rather than merely tracking minutes.

While these dual outcomes don’t materialise overnight, they are objectives well worth striving for, as they not only foster a healthier, more sustainable work environment but also improve service quality and ultimately bolster the bottom line.

Gerry Connolly
Managing Director, ConMoto Group

Catherine Scott
Head of Legal, ConMoto Group

Upcoming CPD on This Topic
If you want to hear more about, and discuss, this topic, join Gerry and Catherine for their 2-hour CPD session – Beyond Billable Hours: Exploring New Legal Practice Models – on Thursday 24 July from 3-5pm. Register here.